# What are sourcing and procurement?

> Sourcing finds and selects suppliers; procurement is the whole cycle of acquiring goods and services. How the two relate and where each starts and stops.

Source: https://www.procol.ai/answer/what-are-sourcing-and-procurement/
Author: Shivangi Singh, Senior Content Writer (Procol)
Published: 2026-10-17

Sourcing and procurement are related but not the same. Procurement is the end-to-end process of acquiring the goods and services a business needs. Sourcing is the part of procurement focused on finding, evaluating and selecting the suppliers who will provide them.

## Sourcing

Sourcing answers the question: who should we buy this from, and on what terms? It covers market research, supplier identification and qualification, requests for information, proposals and quotations, auctions, negotiation and contract award. Strategic sourcing does this category by category with a long-term view of cost, risk and supplier performance.

## Procurement

Procurement includes sourcing and then everything that follows: raising requisitions and purchase orders, receiving goods, managing supplier performance and contracts, processing invoices and paying. It also covers policy, compliance and spend analysis across the organisation.

## A simple way to remember it

Sourcing decides the supplier. Procurement runs the relationship and the transactions. Purchasing is the narrower transactional slice of procurement: orders, receipts and payments.

## Why the distinction matters

Teams, tools and KPIs are organised around it. Sourcing is measured on savings, supplier quality and cycle time of events. Procurement operations are measured on PO coverage, on-time payment, compliance and process cost. Modern platforms connect the two so the price agreed in sourcing is the price paid on every order.

## Go deeper

- [Procurement vs Sourcing: End-to-End Guide](https://www.procol.ai/blog/sourcing-and-procurement/)
- [Sourcing Strategies: Process, Steps, and Examples](https://www.procol.ai/blog/sourcing-strategies/)
- [What is the Procurement Process? Definition, Types & Steps (2026)](https://www.procol.ai/blog/procurement-process/)