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iProcurement and Purchasing work closely together and PO is a pre-req for iProc.
Where Purchasing is mostly used for procuring your strategic or direct production material iProc is mostly regarded as the tool for the ad-hoc requestor and requestors of expense items.
In R12 the two applications uses the same unified catalog accessible for both the Professional Buyer and the ad-hoc Requestors. Content can be controlled by roles, organizations, Suppliers and Categories in the presentation to the users.
Also PO and iProc integrates to Procurement Contracts and Services Procurement that allows for the control of complex delivery scenarios and the procurement of temp labor, contractors and professional services like consulting, legal advice etc.
To add to Niels comments, I-Procurement is used for generating "internal" documents such as requisitions that are used internally within the organization for management approvals before a PO is created.
Purchasing generates "external" documents such as PO that are for people outside the organization such as suppliers.