The Marketing Department’s Apathy to Procurement : Smells like teen spirit…?!

(We're delighted to have another guest post from Ashima Malik of Infosys - who knew she was a music fan as well!?)

Every Marketing Category Manager worth his or her salt would vouch that working with this category is akin to managing a teenager! Given my dedicated experience in this category, I, for one, certainly feel like that.

Let’s consider a few Marketing quirks to corroborate this juxtaposition of the potential 'Opposites' -

a. ‘We don’t need no Education…’:  The non-conformance to the Rules - it’s a well-known fact that a company’s Marketing spend often forms one of the largest parts of its annual budget.  Further, empirically, a large chunk of this spend is attributable to maverick buying in the department.  I have come across cases where almost 65% of the spend was being made on services procured from well-entrenched ‘sacred’ suppliers without approved rate cards or any other formal contracts. And to cap it all - one in every five invoices had exceptions as well!

b. 'Oh, what do they know?! ’: Sigh! There is an apparent low recognition of Procurement’s value addition to the Marketing category. An oft heard refrain from the Marketing Boardrooms -"We are not buying stationery here, this is creative stuff!".

c. 'Dad, you'll embarrass me!!' :  Marketing doesn’t like/want procurement to negotiate with their suppliers in terms of cold variables of 'cost', 'rate cards' and 'contract' etc. This is something that they deem detrimental to the close relationships that they have nurtured with their suppliers/agencies.

d. ‘No messing with my Pocket money’: Cost reductions in the current year can have an effect on the future budgetary position  - something that the marketing heads are very wary about.

Now, each of the above concerns needs to be appreciated and dealt with in pragmatic manner by the Marketing category mangers. And striking a rapport with a free spirited teenager is hard, but Agony Aunt Ashima has a few suggestions -

‘Imbibe their lingo’:  Go beyond the jargon and get a deeper sense into Marketing’s

  1. Supplier readiness assessment criterions
  2. Suppliers of choice
  3. Spend data trends and cost modeling

Base your proposals on the above to have a meaningful dialogue with the Marketing department. I recall an instance when the Marketing team, looking to source content writers, was convinced to opt for “cross geographic” (lower cost)  sourcing, through procurement demonstrating the competitively priced services through a show and tell presentation. This resulted in a 40% upfront saving. Similarly for technology offerings, cross geographic suppliers were gainfully engaged after due diligence on all relevant variables. This resulted in savings to the tune of 45% over the year.

I will be right there waiting for you …: Assure them of your support – convince them that you are the contributors to their goals and want them to drive towards it. Provide them with data points and analytics at every step to facilitate decisions.

Raise their awareness through roadshows and milestone driven stakeholder meetings to stress procurement’s readiness and keenness. Typically, marketing has substantial budgets and they need to be assured that the spend optimisation will not have impact on future budgets. Acknowledge this fact and devise ways to work with it. To cite a specific example – Marketers can be guided to employ certain techniques such as supplier rebate negotiations instead of upfront cost reductions, that reflect in the invoice and not the purchase order.

iii. ‘What do you bring to the proverbial table?’ :  Be transparent about  your goals, techniques and execution with the marketing and their agencies. I recall an incident where we managed to convince a set of Event suppliers, on behalf of marketing, to agree to a reverse auction process. We worked closely with marketing and the agencies and alleviated their doubts with the procedural transparency. The final results were, indeed, heartwarming! In fact, our Marketing Category Manager even made it to the weekly newsletter of one of the suppliers on the whole eSourcing experience. So much for supplier satisfaction!

 iv ‘With you, For you, Always’ :  Marketing needs to be assured that if they rely on procurement for selection and management of the suppliers and spend, it has the requisite  readiness in terms of resource and bandwidth to support full-scale operations. An ad hoc approach to procurement intervention is something that Marketing is rightly apprehensive about. Once they understand that the support (even if tactical to begin with) will be sustained and extended, with a definite plan and structure, they are generally happy to offload this 'boring' side of business.

v. "Thou shalt not…" : Last and not least – rules enforcement. The significance of management support in formalizing policies and mandates cannot be debated. It is essential in establishing a structure and capturing the results in a tangible way. A balance of structure vis-à-vis fluidity of marketing interactions is an important consideration to achieve this relationship Nirvana!

Voices (10)

  1. Arun Kumar A:

    Very well written analogy, Ashima….This really echoes my expereince too..

  2. Cynthia van Landeghem:

    Thanks for your post Ashima.

    Although I’m fully aligned with your suggestions, I feel your evaluation makes the situation looks more difficult for marketing procurement than it is actually. I should admit that getting fully involved in all projects with marketing is not a given but I trust it is not the case either in other categories and I’m not convinced stakeholders’ different mindset is the key reason.

    Being a former marketer myself prior joining procurement, I should say marketing is usually rather open to procurement from the moment saving is not the single focus, and gets fully open to procurement if we manage to talk together about budget optimization and not budget cut and design sourcing objectives + evaluation metrics together (where procurement has usually all room requested to add their specific criteria). This actually clearly helps work as a team towards the suppliers and boosts results.

    All of this is however possible only if procurement knows what they buy and can talk the same language as marketing. This is where marketing is very demanding but again I trust this is the same with stakeholders from other categories. Building credibility towards stakeholders is the mandatory basis for collaboration. This is challenging in digital for instance where everything evolves rapidly and procurement needs to stay up to date.

    I should add I fully agree with Mike’s comments.

  3. Ashima Malik:

    Hi Ali,

    Interesting view point. Although the subject of my PoV is the Marketing department irrespective of what/how procurement is/functions. These set of challenges, largely anecdotal, would more or less be applicable given the subjective nature of this category. The approach explained to create a win-win is that of an enabler and a hand-holding partner.

  4. Ali Mirza:

    Hi Ashima,

    Its a great Analogy!

    One point we miss as a procurement is very bad at selling itself!

    Procurement is always viewed as a “Gate Keeper” than “Enabler”!

    Your analogy holds good in the organizations where Procurement is a Gate Keeper and not at the place where its a Enabler!

  5. Ashima Malik:

    Thanks DP, Riya and Jyoti.

    Mile, +1 – I completely agree and subscribe to your view that Marketing category approach needs to subjective and relationship based.

    1. Ashima Malik:

      I mean Mike 🙂

  6. Mike Kleha:

    In my experience, Marketing is quite willing to work with procurement, assuming that procurement has the requisite skills necessary to add value. Often times, procurements failure is to treat the creative process as a commodity and subject it to the same processes as other (less subjective) areas. It is essential to working with marketing that procurement understand what their objectives are and be sensitive to the relationship aspect which is so critical to the success of the initiative. If procurement arms itself with the right knowledge and attitude, I think they will find that marketing will be quite willing to take on the client role.

  7. D P Chakravorty:

    Brilliant.Just enjoyed the comparison. Really innovative. Keep grooving Ashima!

  8. Riya Shrivastav:

    Fantastic post..kept me humming..look forward to more potions from agony aunt Ashima’s closet.

  9. Jyoti Upadhyay:

    Great post Ashisma! Had fun reading and love the emotional intelligence brought to use in dealing with Marketing department just like you do while dealing with a teenager.

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