Poles Apart? Why Procurement, Sales and Marketing Need to Align Their Views of the World

Many thanks to Chris Smith, Sales Director at Wax Digital, for the first of two informative posts on the relationship between Procurement and other departments, in this case Sales and Marketing. Chris gives his expert and frank opinion on why sales and marketing has a negative perception of procurement, and what can be done about it.

Procurement and sales and marketing teams can often find it difficult to work together. In fact, our recent CPO Viewpoint research suggests that sales and marketing functions are among procurement’s biggest critics in the corporate world. A massive 86% of those surveyed said procurement hindered their progress. Only 24% said that they use procurement’s formal supplier tender processes, far fewer than other departments such as IT and finance. The problem seems to be sales and marketing’s negative perception of procurement with only 12% describing the relationship as ‘very close.’

As someone who has worked in sales for many years, but more recently in a procurement sector focused business, I see a number of reasons why these polarities may exist. Although linked, sales and marketing are different functions in most enterprises and there are actually specific causes behind the struggle with procurement in these two separate areas.

Let’s take sales first. One of the big issues I see is sales being driven solely by commercial imperatives and deadlines, whether that’s customer pressures or quarterly sales targets, there’s a need for speed and responsiveness at precisely the right time in order to close and win the deal. No other business function really operates in the same way and procurement’s largely methodical and process-driven focus can sometimes be at odds, causing friction for sales teams who work to short deadlines with big peaks and troughs. Equally procurement can find the demands of sales and marketing challenging and sometimes they’re just not in a position to react at the speed of light.

In smaller businesses, sales tends to have a greater ‘do the whole job’ mentality, where bids and tenders, sourcing partners and other ‘procurement’ related tasks will be handled directly by that team. It can often seem easier to put together customer and supplier contracts and terms and conditions yourself because you’re close to the deal and know what is needed. However, even in small to medium-sized businesses where there might not be a dedicated procurement team it’s important for sales to follow some sourcing and purchasing best practice to ensure their deals and the supply chain required to support them are both sound.

In larger businesses with deeper departmental structures however, procurement should be able to support sales processes by securing best value, following ethical codes and driving down risk from suppliers that are being sourced to support a deal.

The nature of the business also determines how much involvement sales and procurement should have with one another. For example, with complex, bespoke business-to-business deals that require a significant dedicated supply chain (think major IT outsourcing, putting on a large-scale event, discrete manufacturing etc.) there’s a definite need for procurement and sales to collaborate to put the right building blocks in place.  Ensuring that the solution is correctly priced, offers decent margin and actually delivers to the customer, for example, or the process of assessing the risk, cost and compliance factors with key delivery suppliers and partners. This could mean the difference between a major project succeeding and failing, in extreme cases the difference between company success and failure.

Moving on to marketing, different challenges present themselves. One of the main issues in my view is that marketing has a high requirement for non-standard purchases, where subjective factors such as working relationship and creativity come into the equation much more. Traditional procurement goals such as achieving best price and compliance are sometimes at odds with this and can cause friction in tender situations. The last thing marketing wants to be saddled with is an agency that offers best price and all the right services on paper, but can’t produce a creative project that meets the brief or has a poor understanding of the market!

Customer feedback and satisfaction is an area where it’s critical that procurement and marketing share the load. Procurement has traditionally been viewed as a purely back office function whereas in reality, it is one of few departments that needs to be outward-facing too. Procurement controls the supply chain, which fundamentally is the business’ means of delivering its products and services to its customers, whether that’s direct materials to go into a product or indirect products and services that enable the business to operate.

Procurement should be joining sales and marketing on the front line – visiting key customers to understand what their business needs are today and in the future, how they can help to deliver it and the supply chain requirements that’s likely to lead to. Supply chain is intrinsically linked to what the customer needs and how the business is going to communicate effectively and deliver it.

Procurement seems to be frequently at polar odds with sales and marketing but there is great merit in these departments seeking a stronger and more productive working relationship, most notably to ensure that the process of supply is in line with that of customer demand.

 

First Voice

  1. Kathryn Newsom:

    I am a procurement specialist and I agree with your statements.

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