Five myths about marketing procurement
Marketing procurement as a skillset of procurement started over 25 years ago. I know, I have the grey hairs. Since then we have been toiling away to earn the respect of our bosses, our stakeholders and the suppliers in the marketplace.
The definition of procurement is the act of obtaining or buying goods and services. We seek to minimise risk and maximise value, which can be illustrated with these seven core benefits:
- security of supply
- lower costs
- reduced risk
- improved quality in outputs
- drive for greater added value,
- increased efficiencency
- encourage innovation
The Wikipedia page on procurement provides a good summary of the main activities of procurement, as does our educational and qualification body – the Chartered Institute of Procurement and Supply.
It's important because the market is forever changing, it is never constant. It's a vastly oversupplied marketplace and there are new entrants popping up every day. New technologies and new software are constantly being discussed and sold to you. Market issues suddenly appear that you have to deal with. You want to put structure and rigour into a marketplace where creativity and flexibility can deliver the best results. We use different languages. Magic and Logic (age 10.5 years old) is still as valid today as it was then. What a complex and complicated supply marketplace it is. But we love it and we wouldn't have it any other way. Well apart from the negativity that some still vent towards procurement.
This regular column will help to distil the fears, explain the issues from the point of view of a decent procurement person (that's me BTW) and address any topics or questions that you want us to cover.
Let's start with five myths about marketing procurement:
1. Procurement is a new thing
It is not. It started in the UK. When I was at Cellnet (now O2 for you young readers), and together with colleagues in companies such as Halifax Building Society, Guinness and Natwest Bank, we went to Debbie Morrison at ISBA with our questions and she could see that a trend was emerging in this area and established one of their key action groups that is still running today and doing great things at ISBA called COMPAG.
2. If we ignore them they will go away
Wrong. It makes us more inquisitive and wonder why you are ignoring us.
3. We are incentivised to save money with our bonus linked to savings
Wrong. I have never seen a direct correlation of the two. There may be a departmental cost savings target which all direct and indirect categories will contribute to but not by person.
4. They don't know the marketing category
The well-established ones do. The ones purely focused on marketing do – all 17-plus sub categories within marketing (media, advertising, print, research, data, design, CRM etc). There are many keen to learn. Are you doing your bit to help educate and inform?
5. They use their standard IT buying RFP and contract template
Ok, I may concede a bit on this one. If marketing is a key investment to the client company then legal resource will be dedicated to this. If not, legal may be stretched to cover all spend categories and hence a generic supply contract is used. You can push back and suggest that they use yours or a recommended trade body's tempts as a starter for ten.
If you have any burning procurement questions you'd like Tina to answer in future columns, then send them to her on Twitter @tinafegent