What is Procurement?
The process of sourcing, purchasing, and receiving goods and services from external suppliers.
Definition
Procurement in ERP encompasses the entire purchase-to-pay cycle: identifying needs (requisitions), sourcing suppliers, negotiating contracts, creating purchase orders, receiving goods, three-way matching (PO, receipt, invoice), and processing payments. Modern procurement modules add strategic sourcing, supplier relationship management, contract management, spend analytics, and automated approval workflows.
How Procurement Works in ERP
ERP procurement modules automate the purchase-to-pay cycle. When inventory falls below reorder points or MRP generates demand, the system creates purchase requisitions, routes them through approval workflows, converts them to purchase orders, tracks receiving against POs, performs three-way matching with invoices, and triggers payment through accounts payable.
ERP Vendors with Strong Procurement
SAP S/4HANA Public Cloud
Standardised cloud ERP with quarterly auto-upgrades and low TCO
Oracle ERP Cloud
Enterprise cloud ERP with deep financials and analytics
Microsoft Dynamics 365
Modular ERP + CRM tightly integrated with Microsoft 365
Oracle NetSuite
The original cloud ERP — built for fast-growing companies
Frequently Asked Questions
How does ERP improve procurement?
ERP automates purchase requisitions, approval workflows, PO creation, and three-way matching. It provides spend visibility, enforces purchasing policies, enables better supplier negotiation through data, and reduces maverick spending.