Can we really trust the procurement process in 2016?

Arguably, one of the greatest strengths of any Procurement team is their established process. This process is tried and true, carefully followed, and executed without question. In many industries, this process works, and can be useful in identifying and securing value. However, with Procurement becoming more deeply embedded in non-traditional categories, applying the traditional process no longer works.

I recently pitched my adaptation of the marketing procurement process to a Procurement director of 20+ years. Following the pitch, this director commented that the process was very impressive, but that he was far more concerned with my social skills, and my ability to relate well. He finished with a profound statement, commenting that “Procurement is currently viewed [in this organization] as a value-add, but the instant [procurement] becomes a hindrance, stakeholders will quickly disengage.”

I found his sentiment echoed in an excellent podcast featuring Bob Rodwell on the Art of Procurement. Prior to working in Procurement, Rodwell spent time in Marketing and comments about the importance of relationships in marketing, and the rigidity of the procurement process .Through his career, Rodwell has identified a marketer’s three major complaints about Procurement. “[Procurement is] much too rigid, too slow, and does not understand what [marketers] are trying to accomplish.”

The question remains, how does Procurement transform their image to become palatable to marketers? While history affects the sentiment between the departments, the procurement process with its many steps and careful execution are daunting to marketers, who rely on quick decision making to remain relevant. If procurement cannot present an abbreviated, yet comprehensive process, the battle between the departments will continue, and value will be minimal.

Relationships come first. Many departments are wary of procurement’s involvement in their activity, but none more than Marketing. Begin any potential sourcing exercise with understanding the needs associated with team. A stakeholder questionnaire or interview should be step in one in the process, and sourcing should remain largely out of the conversation. Through a candid conversation, the Procurement team can determine next steps and an effective timeline prior to presenting a capital-intensive RFP process that may require several months or more of activity.

Stakeholder alignment is second. After embedding yourself with the team, the nest step should be onboarding key decision makers. While the CPO and the CMO are logical choices, including the CFO provides additional value when working to align departments and budgets. Ensuring that KPIs match across departments allows for organizational success, and defining the methods of measurement enables tracking of the elusive metrics known as ROI.

Being tasked to do more with less is where procurement truly thrives, and it is in this challenge that having the alignment of C-suite decision makers becomes critical. For example, your organization wants to save 5%, while your agency wants to increase fees by 5%. In what could be a tenuous situation, procurement has the advantageous position of being unbiased, and can work to find a compromise that keeps service-levels the same with less of an impact on budget. Do you want an immediate 5% decrease, or would you like marketing to drive sales up 10%. Procurement can secure this situation, but recognizing that a tradeoff still exists is critical, and having C-suite buy-in from the outset eases and expedites the process.

Now that stakeholders are on-board, process development can begin. As discussed prior, the traditional procurement process struggles in marketing, because it is time intensive in an industry that relies on quick decisions and flexibility for success. Instead of quickly rushing toward an RFP, consider an Agency Relationship Management process, and identify the issues plaguing the relationship. Often, these issues are addressable and can be mediated, enabling both the business and the agency to continue normal operations. Simply changing teams, leads, or processes can lead to an immediate benefit.

If an RFP is unavoidable and the relationship has completely soured, consider a more-comprehensive RFI process. With so many agencies offering such a wide-variety of services, it is impossible to have complete knowledge of all opportunities, even with an exhaustive RFP. Utilizing the RFI as an opportunity to create a short-list should be of primary importance, and this should also be an opportunity for marketing stakeholders to identify fit and culture. If comfortable with the short list, a formal questionnaire may even be skipped, in favor of a comprehensive pitch agenda and assignment, which further reduces the total process timeline.

In summary, those engaging in marketing procurement should challenge their current process, and consider the importance marketers place on relationships and flexibility. As procurement continues to become embedded in the process of marketing, the importance of deviating from the proven procurement process becomes critical in continuing to drive procurement value and deliver on organizational success.  

Source One's RFP Administration experts will be at ISM2016, where Source One is the exclusive sponsor of the Exec IN forum. Want to save on registration costs to attend this landmark event? Learn more over at SourceOneInc.Com.