Why these disparate siblings finally need to pull together

The underestimated lever: How strategic procurement can influence up to 70% of your costs

In the modern business landscape, two fundamental corporate functions exist that, at first glance, appear contradictory, but upon closer examination reveal surprising structural and strategic parallels. Procurement, more specifically referred to as purchasing, and order acquisition, understood as the systematic process of acquiring business customers and orders, constitute the two central interfaces between a company and the outside world. While procurement ensures the company’s supply of all necessary resources, materials, and services, order acquisition focuses on placing the company’s products or services on the market and generating revenue.

Definition and development: More than just ordering and selling

Procurement, in a broader sense, encompasses all business activities aimed at providing production factors and financial resources. In a narrower sense, it focuses on the purchase of materials, equipment, and services necessary for production. The procurement function follows the classic principle of the six Rs: providing the right product, in the right quantity, at the right time, in the right place, in the right quality, and at the right cost. This seemingly simple formula, however, conceals a highly complex strategic and operational challenge that extends far beyond simply ordering goods.

Order acquisition, on the other hand, refers to the structured and organized process of customer acquisition and order securing in the business-to-business sector. It goes significantly beyond simple lead generation and encompasses the systematic identification, qualification, and conversion of sales opportunities along a defined sales process. While lead generation merely aims to generate expressions of interest, order acquisition orchestrates the entire process from initial contact through needs analysis and proposal creation to contract signing and beyond, including customer retention.

Both functions have undergone a remarkable transformation in recent decades. Procurement has evolved from a purely administrative, cost-generating function to a strategic value creator that influences between fifty and seventy percent of a company’s total costs and thus makes a significant contribution to profitability. In parallel, order acquisition has transformed from an opportunistic sales tactic to a methodical, data-driven process supported by marketing automation, customer relationship management systems, and artificial intelligence.

The strategic versus operational dimension: Where the future meets the present

Both procurement and order acquisition can each be divided into a strategic and an operational dimension. This distinction is fundamental for understanding the respective corporate function and its mechanisms of action.

Strategic and operational purchasing in focus

In the area of ​​procurement, the strategic component encompasses the long-term planning and alignment of all procurement activities. Strategic purchasing means developing procurement strategies that are aligned with overarching corporate goals, managing supplier relationships at a partnership level, conducting procurement market research, analyzing and minimizing risks, and establishing sourcing strategies such as single sourcing, multiple sourcing, global sourcing, or local sourcing. Strategic procurement defines which suppliers are critical to the company, how dependencies can be reduced, and which contractual frameworks will enable the best long-term value creation.

Operational procurement, on the other hand, focuses on day-to-day business and meeting short-term needs. It encompasses demand forecasting, order processing, incoming goods inspections, invoice verification, inventory monitoring, and handling complaints. Operational buyers ensure that production or business operations are not affected by material shortages and that all procurement processes are efficient and cost-effective.

Strategy and day-to-day business in sales

On the order acquisition side, we find a similar distinction. Strategic order acquisition encompasses the definition of target markets and customer segments, the development of sales strategies and distribution concepts, the establishment of structured sales processes, the creation of partnerships and strategic alliances, and long-term pipeline planning. It answers questions such as: In which markets do we want to be active? Which customer types promise the greatest long-term value? How do we position ourselves against the competition? Which distribution channels do we use?

Operational order acquisition, in turn, focuses on daily acquisition work: lead qualification, initial meetings, needs analyses, proposal preparation, contract negotiations, and closing deals. It translates strategic guidelines into concrete sales activities, working with defined key performance indicators (KPIs) such as conversion rates, average deal sizes, and sales cycle durations.

Interestingly, in practice it is often observed that in both purchasing and sales, operational activities crowd out strategic tasks. Strategic buyers spend a significant portion of their time on emergency purchases and administrative duties, while sales staff, who should actually be developing strategic customer relationships, are bogged down in the day-to-day business of preparing quotes and resolving problems. This blurring of responsibilities considerably reduces the effectiveness of both functions and prevents the full realization of their value creation potential.

Processes and phases: The anatomy of successful procurement and acquisition

Both procurement and order acquisition follow structured processes that can be divided into several clearly defined phases. Knowledge and consistent application of these phases distinguish professional from opportunistic approaches.

Step-by-step towards security of supply: The procurement process

The traditional procurement process begins with needs assessment. This involves determining which materials, products, or services are needed, in what quantity and quality, and at what time. This seemingly simple task requires close coordination between procurement, production, development, and other departments. Inaccurate needs assessment leads either to excess inventory with high storage costs or to shortages with production downtime.

The second phase involves procurement market analysis. The purchasing department researches potential suppliers, analyzing their performance, pricing, quality standards, delivery terms, and financial stability. For strategically important procurement items, formal tenders are often conducted to increase competition among suppliers and achieve optimal conditions.

The third phase involves negotiations and supplier selection. This includes not only prices, but also payment terms, delivery times, quality guarantees, services, and long-term framework agreements. Strategic purchasing aims for win-win situations where both parties benefit from the business relationship and incentives for long-term cooperation are created.

In the fourth phase, the order is initiated and monitored. Modern companies use ERP systems and e-procurement solutions for this purpose, enabling automated ordering processes and creating transparency across all ongoing procurement operations. Order monitoring ensures that delivery dates are met and allows for proactive action in case of delays.

The fifth phase is goods receipt with quality inspection. Delivered goods are checked for quantity and quality, deviations are documented, and complaints are initiated if necessary. This phase is critical for quality assurance throughout the entire company.

Finally, in the sixth phase, invoice verification and payment processing take place. The purchasing department compares invoices with purchase orders and delivery notes and approves them for payment. An efficient invoice verification process prevents overpayments and makes optimal use of early payment discounts.

From lead to sale: The acquisition process

The order acquisition process in the business-to-business sector has a similar phase structure. It begins with the identification of potential customers, often referred to as lead generation. This phase utilizes various channels such as content marketing, social media, search engine optimization, trade fair appearances, networking, or targeted direct contact. The goal is to capture the attention of companies that could potentially have a need for the offered products or services.

The second phase involves lead qualification. Not every contact represents a realistic sales opportunity. Targeted qualification questions determine whether a budget is available, whether there is decision-making authority, whether a concrete need exists, and whether the timeframe for a purchase decision is realistic. Many companies use lead scoring models for this purpose, which evaluate and prioritize leads based on various criteria.

The third phase comprises needs analysis and solution development. Intensive discussions with the potential customer identify their specific challenges, goals, and requirements. Based on these insights, the sales team develops a customized solution precisely tailored to the customer’s needs. This phase demands a deep understanding of both the company’s own products and services and the customer’s industry and processes.

In the fourth phase, the offer is presented. This can take the form of a written proposal, a presentation, or a product demonstration. Professional proposal presentations focus less on technical specifications and more on the concrete benefits and return on investment for the customer.

The fifth phase consists of negotiations and objection handling. Customers have legitimate questions, concerns, and objections that need to be addressed. Skilled salespeople use objections as an opportunity to further clarify the value of their solution and build trust.

The sixth phase involves the closing of the deal with the signing of the contract. This phase often requires coordination with legal, financial, and technical departments on both sides. In the business-to-business sector, contract negotiations can be complex and involve multiple stakeholders.

The seventh phase, which is often neglected, encompasses onboarding and follow-up support. Successful business acquisition doesn’t end with the signature; that’s where it truly begins. The initial implementation, training, and support determine whether a one-time customer becomes a long-term partner who awards additional contracts and provides referrals.

Value creation and strategic importance: Why both functions should be a top priority for the CEO

Both procurement and order acquisition have evolved into strategic value-creation functions that significantly determine a company’s success or failure. Nevertheless, in many organizations they are still treated as purely operational support functions, thus missing out on considerable value creation potential.

The leverage effect of purchasing: cost, quality and innovation

In the area of ​​procurement, the strategic importance is evident in several dimensions. First, purchasing directly influences a company’s cost structure. Studies show that procurement costs in manufacturing companies often account for between fifty and seventy percent of total costs. A reduction in procurement costs of just five percent can dramatically increase profitability, while achieving a corresponding increase in revenue would be far more difficult. Strategic purchasing leverages its market power, negotiation skills, and process optimization to achieve sustainable cost savings.

Secondly, procurement ensures the supply and thus the production capacity of the company. In an increasingly volatile global economy with geopolitical tensions, resource scarcity, and fragile supply chains, security of supply has become a critical competitive factor. Strategic procurement management identifies risks in the supply chain, develops alternative scenarios, diversifies supplier portfolios, and builds resilient procurement structures.

Thirdly, procurement contributes to the quality of the final products. The quality of purchased components and materials significantly determines the quality of the final product. Strategic purchasing establishes quality standards, monitors supplier performance, and promotes continuous improvement processes among suppliers.

Fourth, procurement enables innovation. Through close collaboration with innovative suppliers, early involvement of suppliers in development processes, and access to external know-how, purchasing can provide important impetus for product innovations and process improvements.

Fifth, procurement supports sustainability goals. Modern companies are under increasing pressure from stakeholders, customers, and regulators to fulfill their environmental and social responsibilities. Procurement can make a significant contribution to a sustainability strategy by selecting sustainably operating suppliers, considering environmental criteria, and promoting fair working conditions in the supply chain.

Sales as a growth engine and market reflection

The strategic importance of order acquisition is equally obvious. First, order acquisition generates the revenue without which no company can survive in the long term. While purchasing optimizes costs, order acquisition creates income. Both functions are equally essential for profitability.

Secondly, order acquisition determines the customer structure and thus the strategic direction of the company. Which customers are acquired, in which industries and markets the company operates, and the size of the orders shape the entire company’s development. Strategic order acquisition selectively chooses customers who fit the company profile and offer long-term growth potential.

Thirdly, order acquisition provides valuable market information. Through direct contact with customers and prospects, sales gains firsthand insights into the needs, trends, and developments driving the market. This information is invaluable for product development, strategic planning, and competitive positioning.

Fourth, order acquisition builds brand reputation and market position. Through professional customer interactions, competent advice, and convincing solution presentations, sales shapes the company’s image in the market and creates trust among potential customers.

Fifth, order acquisition enables growth and scaling. Systematic, process-based order acquisition makes revenue generation reproducible and predictable. Instead of relying on chance and individual sales talent, professional order acquisition establishes systems and processes that function even as the company grows.