IT Sourcing vs. IT Procurement: what is the difference?
Anyone who works in the IT world regularly encounters the terms sourcing and procurement. They are often used interchangeably – sometimes even as if they are synonyms. However, they do not mean the same thing. And that difference is more important than you think.
In this blog, we explain the difference between IT sourcing and IT procurement, why it is relevant for your organization, and how you can better align both processes.
What is Procurement?
IT procurement is about the operational side of IT purchasing. It is the process by which you actually acquire IT products or services. Think of hardware such as laptops and servers, but also software licenses, cloud services, or consulting projects.
Procurement is about concrete actions:
Requesting quotes;
Comparing suppliers;
Negotiating prices and terms;
Placing orders;
Following up on deliveries and processing invoices.
The goal? To ensure that you acquire the right IT resources quickly, efficiently, and within budget.
Example from practice:
An IT manager orders 100 new laptops through a framework agreement with a fixed supplier. The products have already been selected, the contract is set. The only thing left to do is finalize the order. This is a classic procurement process.
What is IT Sourcing?
IT sourcing is the strategic precursor to procurement. It is about the question: what is the best way to organize and acquire our IT?
Sourcing helps organizations with decisions such as:
Are we going to do something ourselves, or are we outsourcing it?
Are we working with one supplier, or several?
Are we choosing a local party, nearshoring, or offshoring?
What is the best sourcing strategy for the coming years?
IT sourcing goes beyond the next order. It is about long-term choices, supplier relationships, innovation potential, and risk management.
Example from practice:
An organization is investigating whether the IT service desk can be better outsourced. They compare providers, analyze costs and risks, and ultimately choose a Managed Services Provider (MSP). The actual tendering and ordering will follow later; first, the sourcing decision must be made.
Sourcing vs. Procurement: the core at a glance.
Why is this distinction important?
If you lump sourcing and procurement together, you run the risk of making poor decisions:
You buy what you have always bought, without thinking strategically.
You miss opportunities for innovation or cost reduction.
You make contracts that are convenient in the short term, but limit you in the long term.
Or worse: you spend too much on the wrong supplier for the wrong service.
By consciously distinguishing between both processes – and smartly collaborating them – you create better purchasing decisions, more control over costs, and greater agility.
How do you get sourcing and procurement to work well together?
Start with strategy. Let sourcing determine the direction: what do we need, and how are we going to achieve that?
Let procurement execute the process. Once the choices have been made, procurement handles the operational execution.
Collaborate, but keep responsibilities separate. Sourcing and procurement have different goals, but complement each other.
Ensure good communication. Involve procurement early in strategic processes – and include sourcing in major purchasing decisions.
In conclusion
IT sourcing and IT procurement are not competitors, but partners. One looks ahead, the other executes. By utilizing both correctly, you make stronger choices, prevent waste, and create space for innovation. And that's exactly what modern IT organizations need.
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