Feature—A Reading List for Working with Procurement
The complexities of the relationship between procurement and marketing, which continues to evolve, can hardly be summed up in one article – or a hundred articles, for that matter. The benefits of having the two entities in stride with each other can be obvious in many cases. It’s the journey to reach that point that can cause struggles – unless the two sides embrace the unity and commit to the process as well as the end result.
If two villages or cities on either side of a river decide that a need exists for a bridge, how can the end result be seen as anything but positive? However, the steps leading up to that end are complicated and contentious. Still, both sides realize that both will benefit dramatically from, literally, meeting in the middle, which neither can do without the other.
A joint effort
Uniting procurement and marketing in the event organization process can be as simple as teaching the left hand what the right is doing. In order for the units to work side-by-side, each will have to “educate” the other in some aspects of their approach. Marketing will realize procurement’s role in helping to stretch budgets. Procurement can put ROI figures on budgeting. Meanwhile, marketing can teach procurement about incremental value. That’s not all: Procurement can illustrate the measurable value of marketing, rather than commoditizing it.
That can arrive, in part, by identifying common ground between marketing and procurement.
What organization wouldn’t take the opportunity to reduce duplication, trim costs and develop a more cohesive company? That will invariably lead to what Marketing VP Blair Currie identifies as the “triple bottom line” of profit, people and planet.
You might ask why the discussion is even necessary? It’s because that events, meetings and business travel are drawing more strategic attention in terms of spending. The global business world will continue to grow in those terms, as reported in CPO Rising.
Both departments should be converging on a common destination: ROI, which is what the firm is after, after all. Companies need to assure that both sides know they must learn to surrender “control” in order to emerge stronger, both individually and as a team. Any continued effort to assert dominance will doom the procedure.
Invariably, procurement will adopt marketing skills, and marketing will gain procurement’s eye, the way that cultures have combined and overlapped since the advent of the new global economy. According to Christine Barney, CEO of rbb Public Relations, “… sometimes the right thing to do is consolidate. Sometimes the right thing to do is add.”
Reaching across the aisle
There’s no doubting the amount of concern on the part of both departments over the prospect of what is sometimes classified as the “incursion” of procurement. Marketers can feel that, according to AdExchanger, “creative process will be devalued, client services squeezed, and strategic account planning shrunk to a line item by procurement agents who may lack marketing experience.” Is that really the case, though? In their responses to the topic, industry leaders beg to differ. Included in those observations are that helping clients reach their end goals is an important factor.
Ultimately, both departments can realize increased value by leveraging collaboration. When Hewlett-Packard was consolidating its trade show vendors, marketers realized the importance of educating procurement in their procedures, an advance that procurement people were all too happy to embrace. For instance, both entities realized that the shortest distance to the achievement was for procurement to attend a trade show. A slight snag illustrated the commitment needed by both departments: Because procurement had no travel budget, marketing covered the cost in its budget.
Eventually, the two sides developed an RFP scorecard that provided a common language in evaluating vendors, smoothing the consolidation even further. That has an added value in that it provides a consistent groundwork for the vendors, who needn’t worry about how and whether the consolidation will affect them dramatically.
The benefits to each department should not be overshadowed by the overall benefits to the company. In some ways, those benefits are just as important. For instance, teaming with procurement can help marketing realize how budgets can stretch farther. Procurement can also put ROI figures on budgeting. Meanwhile, marketing can teach procurement about incremental value.
Another aspect that will aid the transition is willingness of each department to be educated about the other. “Some executives have identified procurement with logic and marketing with magic. It’s an interesting association,” according to purchasing journalist Paul Teague, who explains that he doesn’t agree with that assessment. He stresses that marketing is certainly capable of logic in addition to its “magic.”
That’s not to say that procurement can be perfect in all situations. Procurement’s participation, though, can result in positive influence in multiple areas, including driving marketing programs and branding within a defined budget and instituting spend management principles during the product development phase.
The true bottom line
Ultimately, the matter reaches beyond “control,” “incursion” or even the bottom line. As explained in CPO Rising, the convergence is not financially motivated, it’s process-motivated. By keeping that in mind, marketing and procurement are able to bridge their differences and open a path to not only the savings that CFOs prize, but the sales that they hold in even higher regard.