---
title: Category management: Definition and How It Works | Aavenir
url: https://aavenir.com/glossary/category-management/
description: Category management groups spend into categories of similar goods or services and manages each one as a business unit with its own strategy.
updated: 2026-11-07
---

[Home](https://aavenir.com/) / [Resources](https://aavenir.com/resources/) / [Glossary](https://aavenir.com/glossary/) / Category management Glossary

# What is category management?

Category management is a strategic approach to procurement that groups spend into categories of similar goods or services and manages each one as a business unit with its own strategy.

## How category management works

Spend is broken into categories, such as IT hardware, facilities services or packaging. Each category gets a manager who understands its market, users and suppliers, and who builds a plan covering demand, sourcing, supplier relationships and risk. The idea came from retail, where products sold are grouped into categories, and procurement adopted it for what is bought.

## Why it matters in procurement

- **Consolidation.**combining demand across business units for better terms.

- **Expertise.**category managers know their market deeply.

- **Strategy.**decisions follow a plan, not one purchase at a time.

- **Supplier relationships.**fewer, better managed suppliers.

- **Risk.**category level view of concentration and continuity.

## The category cycle

A typical cycle runs: analyze spend and requirements, research the market, set the strategy, source and contract, then manage performance and review. It repeats as contracts come up for renewal and markets change.

## How Aavenir handles it

[Aavenir Atlas](https://aavenir.com/solutions/ai-contract-intelligence/) answers category questions across every contract, such as which agreements expire this year or what each supplier charges for the same service. Category managers can then run sourcing events in [RFPflow](https://aavenir.com/solutions/rfp-management-software/).

## Keep reading

[Spend analysis Spend analysis is collecting, cleaning, classifying and analyzing spend data to see what an organization buys, from whom and... Read more](https://aavenir.com/glossary/spend-analysis/)[Supply positioning model The supply positioning model sorts what you buy by two measures, spend and supply risk, so procurement can choose the right... Read more](https://aavenir.com/glossary/supply-positioning-model/)[Centralized procurement Centralized procurement is a model where one department, usually at headquarters, buys goods and services for the whole... Read more](https://aavenir.com/glossary/centralized-procurement/)

Frequently asked questions (FAQ)

## Common questions

###

### What is the difference between category management and strategic sourcing?

Strategic sourcing is a process for buying a category well. Category management is the ongoing ownership of that category, including demand, supplier relationships and performance between sourcing events. [Read about supplier sourcing](https://aavenir.com/glossary/supplier-sourcing/).

###

### How do you define procurement categories?

Group items that share a supply market and suppliers, using a spend taxonomy. Categories should be large enough to matter and narrow enough to have a clear market and strategy. [Read about spend analysis](https://aavenir.com/glossary/spend-analysis/).

###

### What tools help category managers?

Clean spend data, a contract repository with searchable terms, market intelligence, sourcing tools and supplier performance data. Being able to ask questions across all contracts in a category saves the most time. [See Aavenir Atlas](https://aavenir.com/solutions/ai-contract-intelligence/).

Have a question we have not answered? [Ask the Expert](https://aavenir.com/contact/)

Schedule a demo

## See your contracts run on one record.

- **1****A 30 minute walkthrough**Built around your team, whether that is procurement, legal, IT or finance.

- **2****Your contracts, not ours**Bring a few sample agreements and watch Aavenir AI extract and review them.

- **3****ServiceNow or standalone**We show the deployment that fits the systems you already run.

Prefer to talk first? [Contact the team](https://aavenir.com/contact/).

The form did not load. [Contact the team](https://aavenir.com/contact/) instead, or refresh the page.