Procurement: Procurement is the business process that deals with acquiring products and services for an organization and is usually viewed as a tactical function. Procurement is a broader concept encompassing multiple processes – sourcing, contract management, requisitioning, purchasing, payments, analysis, and supplier management.
Sourcing: Sourcing is the procurement function responsible for finding the right supplier for meeting the organization needs and is viewed as a core strategic function. It starts with identifying internal requirements and focuses on researching potential suppliers, running sourcing events, evaluating responses, and finally making decision based on factors influencing total cost of ownership including unit price, quality and discounts, timely delivery, risk etc.
Purchasing: Purchasing is the activity that covers the transactional aspects of the procurement cycle including ordering goods, invoicing, receiving goods, making payments, etc.