Debate: Does Procurement stifle Marketing’s Creativity?
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The document discusses whether procurement stifles marketing creativity. It notes that while monitoring marketing ROI is important, predicting it is difficult. Some argue that procurement hinders creativity through long RFP processes and frequent agency repitches. However, others argue that procurement can help marketing by managing pitches, contracts and disputes to allow marketing to focus on creativity. When procurement focuses on commercial and risk factors rather than just cost, and collaborates with marketing, it need not stifle creativity. The debate participants ultimately voted that "good" procurement does not stifle marketing creativity.
Debate: Does Procurement stifle Marketing’s Creativity?
- 1. 4C Marketing Breakfast Debate July 2012 Does Procurement stifle Marketing’s Creativity? A growing number of businesses are looking to drive Predicting ROI of marketing spend is not easy. If you growth by cutting costs and optimising spend. In this are buying electricity, for example, a certain context there is an increasing amount of pressure on investment will deliver a defined amount of watts, marketing and procurement to work together. which will keep a known number of lights on. There Traditionally, there has been some scepticism are no such certainties in advertising, marketing or PR, regarding these functions collaborating given their partly because most effective marketing requires respective mandates. differentiation, innovation, and personalisation. 4C brought together a selection of professionals from Standardisation and repetition makes spend several sectors to determine whether procurement requirements easier to predict, but the results will be stifles marketing's creativity. Cameron Holder, affected. In this environment, procurement managers Manager at 4C Associates, debated that procurement are not in a good position to determine what does not hinder creative thinking, whereas Alexandra represents value for money. Ranson, Managing Director at Specialmoves, argued that, despite best intentions, procurement gets in the "Marketing does not live in a bubble which way of effective marketing activity. should be immune from budget constraints. We need to be just as responsible and Why Procurement Involvement Hinders accountable as every other department." Marketing Creativity The current business and economic environment poses Expensive procurement processes are also a problem. challenges for all sectors and disciplines. Marketing is 95 per cent of marketing agencies are SMEs and no exception: spend is increasingly being scrutinised cannot afford to spend more hours replying to an RFP to ensure resources are put to the best possible use. than they will be paid for, even if they win. Some of Monitoring whether marketing is delivering a decent the most creative, flexible, dynamic agencies are ruled return on investment is essential: there is no point out by long, complex procurement processes which attacking cost without knowing whether what you only large networks (with big overheads) can afford are spending money on is working. to participate in. Release cash Reduce cost Manage risk Improve ROI T: +44 (0)20 7605 1600 E: [email protected] W: www.4cassociates.com
- 2. Procurement also damages long-term relationships "Collaboration between marketing and with agencies by pushing for regular retenders and procurement benefits both sides and allows repitches. These can be very expensive (for both sides), disruptive, damaging to morale, and distract from for the creation of a solid relationship with every day delivery. Once selected, agencies will try to external agencies" claw back these costs by any means available, wiping out any apparent commercial gains that procurement Q&A has negotiated. The debate was opened to the floor with concerns expressed regarding the extensive involvement of procurement in the RFP process. Attendees provided several examples of large organisations whose RFPs required an excessive amount of work and in one case, even charged a fee. Ranson called for marketers to improve their performance management capacities to avoid the need for procurement to be so heavily involved. At this point, participants called for a distinction to be made between good and bad procurement. It is undeniable that excessive involvement and concentrating purely on spend can only serve to stall creativity. Holder pointed out that this did not reflect Procurement does not Stifle Marketing's best practice procurement and that the function's Creativity involvement in the RFP process should focus on The idea that procurement and marketing cannot commercial and risk factors. work together is outdated. Procurement is there to help marketing do its job and allow each function to One participant disagreed with Holder’s view that focus on what it does best. procurement should steer clear of the creative process. A lack of involvement in the creative rationale results Pitch management is one of the areas where in an uninformed debate between both functions. procurement has the tools, expertise and time to add Holder replied that in his experience, each function substantial value. Procurement increases resources was perfectly capable of working to their strengths dedicated to the pitch, so marketing can consider a and that procurement's involvement in the creative greater number of agencies. Relationship process would hinder progress. management is another area where collaboration between the functions can be fruitful. Procurement Results can ensure robust contracts are put in place and The motion was amended to "Does 'good' guarantee that each party is clear on what the final procurement stifle marketing creativity". The floor objective is. voted against the motion. In addition, the function can carry out regular 4C Associates has the insight, technology and proactive reviews throughout the duration of the experience to drive rapid profit improvement. contract, to make sure any issues are flagged up as We offer specialist consulting, technology and soon as possible. This avoids the need for reactive managed services to transform your costs. We reviews, which are carried out after something has apply industry and functional expertise to deliver already gone wrong. exceptional benefits. "Sometimes someone has to be 'bad cop' in Our team works with leading organisations across a disputes. Procurement can do this so that range of cost categories including Direct Materials, marketers can carry on without their day to Services, Marketing, IT, HR, Logistics, Supply day relationship with the Agency being too Chain, Property and FM. We apply deep practical affected" knowledge, combined with process and change skills, to deliver reduced costs and increased profits. Another vital but often overlooked contribution which procurement can make, is obtaining support To discuss how we can transform your costs please from finance. Not only will marketing benefit from contact us at: having an objective voice on side when discussing budget, but procurement also "speaks the same Tel: 0207 605 1600 language" as finance. This collaborative approach Web: www.4cassociates.com adds credibility to marketing's requests for reinvesting Email: [email protected] savings rather than stripping them from the budget. Release cash Reduce cost Manage risk Improve ROI T: +44 (0)20 7605 1600 E: [email protected] W: www.4cassociates.com