From Conflict to Collaboration – 5 Ways Procurement Delivers Value To Marketing

We are pleased to bring you this piece from George Smart, business development director, Europe and North America, APS Group, UK-based marketing solutions and customer communications firm. George shares his opinion on collaboration between marketing and procurement and gives five distinct tips.

Marketing and procurement can sometimes seem a bit like oil and water. Marketing is often stereotyped as being creative, intangible and focused on style over substance, while procurement is generally categorised as purely about cost and process.

Yet despite these differences both sides do need to work together, both for their own benefit and that company as a whole. We recently participated in ProcureCon Indirect in Amsterdam, talking about this very topic on a panel that looked at aligning procurement with various business units within an organisation.

Over the three days and many meaningful conversations it is apparent that procurement truly wants to move away from its image of being all about cost. Practitioners are already taking action and changing behaviours where they realise traditional “cost out” will not be sustainable without stronger partnerships with functional counterparts.

The result will be a better integrated decision-making process delivering real impact on business results. It’s a view shared by procurement expert Les Ball: “Procurement professionals can drive incremental value for their businesses and organisational partners, but they need to look beyond traditional, negotiated cost savings, and put long-term objectives in the same vocabulary as their internal stakeholders, so considering as much "the how" as "the what". This means having a more balanced view between cost out, delivered content and service quality, which logically builds more trusted partnerships, unlocking far greater value than historical relationships might have achieved."

With that in mind, here are five ways procurement can evolve its relationship with marketing, moving from potential conflict to sure-fire collaboration.

  1. Understand that marketing is an investment – and show you know it

Marketing professionals spend their lives justifying their activity to other stakeholders who often struggle to look beyond spend. Traditionally, demonstrating results has been a struggle for marketing – with the rise of digital, this is in theory easier, but it still requires non-marketers to understand that it is an investment.

Procurement should communicate that it understands that despite the rise of supposedly instant digital channels, results can still take time, and there will be different types of spend that need different approaches to measuring value. With this in mind, procurement needs to move away from a standard one-size fits all ROI measure, and work with marketing to define KPIs that go beyond hard cost metrics.

  1. Talk about customers, not costs

Where two opposing views are involved, the concepts and language they use often differ dramatically. Understanding the context that marketing operates in allows procurement to talk the same language and at the same level. This isn’t about learning buzzwords, but about being able to link discussions and concepts back to marketing’s day-to-day work – acquiring and retaining customers. This also extends to understanding the applications and analytics that marketing departments use.

  1. Show how Procurement (and technology) can help

Procurement and marketing both want to demonstrate the value they deliver, and work together in a way that delivers mutual benefit. For instance, in a global business one of the big concerns for a central marketing department is balancing a single vision, while incorporating room for localisation to be applied in an efficient manner. Implementing agile technology (online ordering systems, sharing portals, online creation tools) that marries a central strategy to country-level execution can deliver all of that. It can also capture valuable MI and KPI information that will enable procurement’s goals of delivering value to the business.

  1. Know the market, but trust your marketing colleagues

Marketing is one of the more outward facing of an organisation’s departments, and many marketers not only understand their own industry, but are also looking at what counterparts in other industries are doing. Therefore, procurement also needs to put  more emphasis at looking outside as well, so that it has a greater understanding of what suppliers are doing, what the key trends are and how that can relate to its own sector and company. This understanding, combined with marketing’s own knowledge, can delivering big benefits.

  1. Collaborate to unlock value

The more senior the marketing professional the more accountable they are for demonstrating the value of their creative outputs. This can be tricky, with the potential for many marketers to ineffectively showcase the value they create. This is where procurement can help, by assisting marketing teams in translating the intangible into something more tangible for the rest of the business.

Ultimately every business is different, and the roles and weight of procurement and marketing will vary from company to company. However, no matter what the situation, a combination of understanding, the right technology and the ability to demonstrate mutual benefit can help form an unstoppable team.

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First Voice

  1. Ian Heptinstall:

    Looks like a recipe for not just marketing.

    Also the description of “…intangible and focused on style over substance,” sounds like a good description of many procurement- and SCM–related investments in technology to me 😉

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