Working together for increased efficiency
Sourcing marketing services is often not a priority in strategic procurement, even though they make up a considerable portion of indirect procurement budgets. Any conflict between marketing and procurement departments is often due to completely different perspectives, but this is exactly why collaboration pays off, as the different sides can form a value-enhancing partnership. INVERTO understands which ground rules to follow.
In many companies, marketing services are virtually exclusively sourced by the specialist departments themselves. This means that employees primarily make purchasing decisions based on their own marketing skills. The opportunities that strategic procurement provides to get more of out the same budget are still not being used enough and the effect that procurement can have on transparency, process efficiency and compliance is all too rarely recognised, so there is no early integration of procurement in operative and strategic marketing planning. However, in INVERTO’s experience, there is the potential to make savings of 11-15 percent on the same marketing service. This can then be immediately reinvested and directly improve performance. So why is this value-enhancing partnership such a rare occurrence?
Misunderstanding: an obstacle to collaboration
Generally speaking, there is only a rudimentary exchange between marketing and procurement. Often, marketing does not know what tools and skills procurement has available for support, and procurement does not know the requirements of marketing. This causes misunderstandings, like the idea that creativity would be affected and that it is already difficult to specify and therefore tender out services. But what proportion of purchased marketing services is really creative, and which services are recurrent and can therefore be standardised?
Services provided by media, advertising, PR or promotions agencies are often charged at a flat rate. Besides conceptual services such as strategy and idea development, there is more skills-based support, such as writing regular press releases, which consists of recurring tasks and can therefore be put out to tender and compared. So what practical approaches can be employed to structure marketing procurement for increased efficiency?
Efficient selection for reliable results
Finding the right agency is the fundamental aim of marketing procurement, and it requires a transparent, structured process. The starting point is a comprehensive analysis: what are my needs? What suppliers are on the market to meet these needs? Analysing agencies and their offerings at this early stage helps to recognise synergies, opportunities and risks.
Our case study shows how INVERTO’s systematic approach can help to identify inefficiencies and exploit potential! Read the whole article here.
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Further content in this issue:
- Procurement Transformation
Turning buyers into value creation partners
- The financial difficulties of German and UK hospitals
Why hospitals are in the red and how the situation can be improved
- Global Sourcing Index
A new index for the textile industry that provides all the information needed for global procurement
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