Procurement Terms
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Category Management is a popular method of managing the spend of an organization. Each similar type of spend is organized into spend Categories so that strategies and operations are aligned. This ensures an organized approach to delivering procurement services across the organization.
Category Segmentation, sometimes Category Positioning, is the process of classifying procurement categories in terms of their strategic importance to the organization. It is an integral part of a Category Management program that helps define what resources, processes and procedures are applied to manage the category.
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Category Segmentation, sometimes Category Positioning, is the process of classifying procurement categories in terms of their strategic importance to the organization. It is an integral part of a Category Management program that helps define what resources, processes and procedures are applied to manage the category.
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Centralised Procurement is a function that is entirely controlled by the central procurement function. A pure centralised function is rare amongst most Organizations due to the need for specialists working directly with their colleagues to create business value. However, in service organisations centralised procurement teams flourish due to the supporting role of the products and services being procured.
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Total Cost of Ownership (TCO), sometimes Cost Driver Analysis, Acquisition Cost or Value for Money (VfM), is an estimate of the true cost of buying a product or service. It is the sum of all costs incurred during acquisition, possession, utilization and disposition of a product or service. TCO is important because it represents a bigger picture beyond the basic purchase price and reflects the costs that aren’t necessarily included in the upfront pricing.
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