The Problem with Procurement
It's not them, it's you!
This morning’s Marketing Society Event “Client & Agency - Evolution or Revolution?” covered many of the hot topics in the client agency relationship, including (briefly!) Procurement. Unfortunately, I wasn’t quick enough off the mark for my rant, the questions & comments were coming quick and fast.
Now I’m back at the desk feeling the need to get it off my chest.
The problem with procurement is that the marketing / procurement relationship has become distorted through the lack of input and management from the marketing industry. Marketers (and agencies) feel they are answering to the procurement team, instead of being supported by a business partner that understands its objectives.
If we take Procurement back to what it is meant to do – it is there to ensure transparency and business value.
Transparency should be a non-negotiable in any supplier relationship. By allowing situations to evolve where fees, margins and costs are not transparent, Procurement teams have reasonably become weary of agency contracts and agreements.
When it comes to value, procurement teams look to business functions for guidance. They are almost always people from a finance background, with no specific marketing expertise – it falls to us to provide reasonable, measurable, defined value. Somehow, we as an industry have failed to define value in agency and marketing services in terms of simple, understandable business outcomes.
In the absence of reasonable inputs from marketing, procurement defaults to an out-dated, irrelevant commodity model and the whole process becomes distorted.
At an organisational level there are many great CMOs doing great work with procurement business partners, but at an industry level scepticism and resentment are more the norm than leadership.
So, its time we got over ourselves.
It is completely reasonable for a business to want to prove transparency and value for one of its largest expenditures and it’s up to us to provide guidance and models that ensure it is done in a relevant, effective way.
Procurement is not the enemy. For client-side marketers, they are there to support and we should harness that support. For agencies, see it as an opportunity to step outside of the day to day and prove your value in a structured way.