Scanmarket eSourcing Summit – Some Good Points from the Media Man

At the recent Scanmarket eSourcing Summit (see part 1 of our review here), we heard an excellent presentation from Jeff Ariz, a Scanmarket client and VP of Global Sourcing at Viacom. The firm owns a number of household-name media businesses, including Nickelodeon, MTV and Paramount.

Jeff started out in finance and made the move into procurement with Gap before moving to NBC and getting the taste for the wonderful world of media. After a quick diversion to the utilities sector, he now has responsibility for some of the biggest spend areas within the Viacom procurement portfolio – principally Marketing, Production and Events – with responsibility for a couple of $ billion a year of third-party spend.  He is clearly a man of high energy, initiative and drive, he clearly loves what he does and, as he said, you have to have a “good cultural fit” to work in this type of industry.

Given that range of categories, his experiences are fascinating both from a procurement standpoint and from a more general perspective. In particular, he talked about the issues of working with a bunch of creative and high-powered people as key stakeholders, and how to influence their behaviour and decisions.

He explained how sometimes, his work is very entrepreneurial and immediate. So he will hear that a TV or film production is going to be based in a particular city, and he will get in before the director can start block-booking hotels. "Just give me 24 hours to show you we can get a better deal for you”, is his approach. He has to really demonstrate that his team can add value, or these stakeholders will do their own thing, and there is no “corporate governance” that is going to overrule a top director or producer!

So at times, it is a world away from the long-term category management strategies we tend to consider. Yet of course underpinning the entrepreneurial approach, procurement does need to understand the markets, the suppliers and the commercial levers. He and his team need to know just how to go about getting that great deal on the 5,000 room nights, and have done the hard work in advance so they can execute that apparently entrepreneurial deal at the right moment in time!

And despite the “artistic” component of the industry, he explained that data is key. Knowing about the spend detail gets you into the discussion – he has successfully used the approach of “recommending an audit” on a particular area of spend, without even mentioning “sourcing” or “procurement”. Spend analytics drives the data which takes him into the processes and eventually realises the benefits.

The categories that he and his team have addressed include everything from stunt services to flowers, props to travel. One technique he often uses is to “unbundle” and dig into the charges when engaging third parties. That’s a good point for any procurement person – understanding what makes up the fees we are being charged, particularly when our prime contractor is buying in significant goods or services themselves.

Another great point was his suggestion that category strategy and plans should be presented to senior management on one page with a few key headlines. That is probably a good idea for any industry, not just media, we suspect. He worked for a CEO who used to tell him “explain it to me like I’m a kid”! That is pretty profound advice really – if you can’t make your pitch or explain your strategy in clear terms and language, maybe it isn’t such a great strategy after all.

All in all, it was a very enjoyable session as well as illuminating for delegates – thanks to Jeff Ariz and we hope to bump into him again.

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