Masterclass Notes: Procurement — friend or foe?
by Johanna McDowell (@jomcdowell) UK marketing procurement specialist, Tina Fegent, is one of the few marketing procurement specialists in the world and is uniquely positioned to bridge the gap between agencies and marketers, as well as the latter’s procurement people.
Fegent was recently in South African for the second IAS Marketers Masterclass session on 3 March 2015 in Johannesburg.
Her masterclass provided some excellent — and very leading-edge — input on the role of marketing procurement, how it is not easily understood and a perspective on how agencies see procurement.
There were very differing views on procurement practices within the 11 corporate companies represented by the marketers attending this masterclass. What was so interesting was that each organisation shared a different experience of the impact of procurement upon its marketing work and, in many cases, the relationships between marketing and procurement inside the various organisations were new.
Fegent·gave the marketers a comprehensive overview of how to improve marketing procurement practices, sharing some interesting statistics:
- Marketers appreciate procurement more because they’ve been under growing pressure from senior management to improve efficiency and effectiveness
- Procurement does things, such as negotiating and holding agencies accountable, that marketing would prefer not to do itself
- Despite the closer relations, the survey finds goals of marketers and procurement people still diverge
- Cost reduction and risk mitigation are top priorities of procurement people
- Sales or market-share increases and improving marketing ROI are top concerns of marketers
Role of procurement
The role of procurement is to contribute to the overall profitability of the organisation:
- Management of the organisation’s external resources (suppliers)
- Responsibility for managing costs acceptable to the business and representing good value
- Ensuring quality and delivery are not compromised
- Responsibility for developing and implementing sourcing strategies for all external spend
- Ensuring corporate and departmental governance principles are adhered to
- Project management skills — working collaboratively with internal and external departments
- Ensuring appropriate levels of contractual coverage are implemented and managed
- Minimisation of risk and maximisation of value
And does it work? What does best-in-class marketing procurement look like?
- Relationships with stakeholders and agencies are key
- Understanding and experience of the market are vital
- Ability to use procurement tools and processes with flexibility— not tight and regimented
- Creativity in all aspects of the negotiation
At the end of the session we concluded that procurement — especially marketing procurement — is still in the very early stages in South Africa, although we do have the Chartered Institute of Procurement and Supply Chain here and it is very current; marketers have varied experiences with procurement within their organisations; and certain of the organisations have developed their marketing procurement specialists, although all acknowledge there is a lot to learn still
Much greater levels of interaction
At the end of the agency session later that day, we noted that agencies seem to have much greater levels of interaction with corporate procurement than the marketers do within their own organisations.
It is very much a work in progress.
Johanna McDowell (@jomcdowell) is managing director of the Independent Agency Search and Selection Company (IAS), and she is one of the few experts driving this mediation and advisory service in SA and globally. Currently she is running the IAS Marketers Masterclass, a programme consisting of masterclasses held in Cape Town and in Johannesburg. Twice a year she attends AdForum Worldwide Summits.
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