This post is by John Lawrence, Business Development Director at SGK Europe.
They say opposites attract. To 'them' I'd say 'Marketing' and 'Procurement'. Long pitted against each other as the Montagues and Capulets of the business world, both departments have merrily driven forward the ongoing war between art and commerce.
Historically, procurement has worked to the sole objective of driving down rate cards, paying little or no respect to the impact on overall performance. A department tasked with cutting the budget was rarely going to find favour with those tasked with spending it. But the idea that non-specialist teams could limit their activity and potential for success so potently was positively infuriating for marketers.
That is, until recently. Over the last six months, through several presentations, many discussions and some very insightful conferences, I have established – in my mind at least -that procurement is evolving and that this evolution places procurement at the very heart of driving brand performance. The two sides it seems are finding their common ground.
What has been very clear over the last few months in particular is that procurement and marketing are working in much closer collaboration. Whether each party has actively sought to better this relationship is unclear but there is a noticeable trend towards mutual objectives and a more open relationship with suppliers. Shared KPIs, cross-departmental performance measures and other forms of teamwork are driving this new coherence.
A clear beneficiary of this truce is undoubtedly the agency partner. No longer caught in the middle, trying to satisfy ever-growing demands from the marketer on ever-shrinking shoestring, agencies now have a real shot at making a difference to the overall success of the business. An increasing willingness to have an open and transparent dialogue drives up the value of both organisations.
The provision of information from both procurement and marketing creates a clearer picture of the role that the agency is required to fulfil. Without this clear direction a solution cannot be achieved. The expertise of agencies, marketers and procurement professionals provide a path that in the majority of cases is about driving organisational change.
Procurement's role in this is clear in my view. They bring the right people to the table to have these grown up conversations that look to achieve improved brand performance. Not led by cost but by an understanding of how the efficiency of a process through the supply chain can bring sustainable benefit in the short, medium and long term.
Indeed, some of Henry Ford's greatest innovations came not in the cars themselves but in the processes of creating them (for example his 1914 introduction of a conveyor belt that drastically increased production). Brands have the opportunity to allow partners to invest in innovative ways of working and technologies that ensure continuous improvement. An increasing request for agencies to work with procurement partners to map and understand graphic supply chains pre, during and post implementation is further testament to the fact brands recognise they cannot become what they want to be, without understanding they need to change. Procurement can and should lead this change.
The transformation has begun. Procurement teams are a very different animal today than they were 10 years ago. They have built in new specialist marketing capabilities and expertise and have developed upon tools and processes that govern the selection process. Scorecards are more balanced and moving away from price as a precursor to success to an understanding of value in its true sense. The relationships between all stakeholders are strengthening and there is a feeling of trust that in all relationships builds the strongest foundations to move forward.
To summarise, it's time that marketing gives its commercial left-brain partners the credit they deserve. Brand futures and marketing success are highly influenced by the quality of the teams that support and manage critical commercial and brand management decisions. Their evolution like any other will be driven by influencers in the market place and the building of strategic third party relationships that deliver the right type of organisational change.