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Marketing Procurement contributes most added value when embedded with other marketing stakeholders to provide greater initial support, a CASME study reports.
C0-located with marketing
CASME found that only 19% of marketing procurement teams are benefiting from the advantages of being physically co-located within the marketing team.
Despite attempts to position Procurement as a strategic function that has an important role in ensuring a return on investment (ROI) from the marketing budget, it is still sometimes perceived as being primarily concerned with purchasing goods and services at the lowest possible cost, and for prioritising cost reduction above the need for creativity.
By creating the right opportunities, Procurement can add significant value to a business by implementing effective category management, minimising risk, sharing market knowledge and delivering continued innovation.
A defined marketing stakeholder engagement process, with tailored ‘marketing-style’ communication, has proved to be fundamental for allowing Procurement to deliver greater improvements, remove negative emotions and eliminate the cost-cutting perception. If Procurement establishes greater value in activities, better ways of working, faster speed to market, the application of technology, and the provision of different insights or innovation to business challenges, the cost savings will naturally follow.
In a recent study, CASME found that only 19% of marketing procurement teams are benefiting from the advantages of being physically co-located within the marketing team for the purposes of strategic alignment and communication. However, even at the best of times, achieving a suitable amount of marketing stakeholder engagement can be challenging; particularly if the organisation operates within various industries or is the parent company of multiple subsidiaries. Marketing stakeholders will often have different requirements and expectations, and it is Procurement’s responsibility to determine how to deliver value while complying with organisational policies and achieving objectives.
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Set out below are a selection of insights from CASME’s global membership community of procurement professionals on how to achieve value with effective stakeholder engagement.
Stakeholder Engagement Strategies
Although there is no magic solution for convincing stakeholders to accept the idea that Procurement’s role is to support their objectives and to add value, over a sufficient period of time, relationships should be developed, maintained and tested.
As being practiced already, one way of achieving better and/or earlier stakeholder engagement is co-location with marketing stakeholders, even if only for half the week. The main advantage is being accepted by Marketing as part of their extended team, due to close physical proximity, and the opportunity to hear and see their plans and activities. Further benefits include greater alignment of business strategies and challenges, local/regional understanding, informal knowledge gathering, increased communication and the ability for marketers to bounce ideas off procurement team members.
Additional activities that CASME members have found helpful for improving stakeholder engagement include:
The Importance of Innovation
The best innovations reduce costs while adding value. These can either be a number of small improvements, or a combination that together make a difference; they can involve internal changes or external offerings. However, to obtain the latter, it is not acceptable to simply demand innovation from suppliers through a contract clause. To be effective, the buyer must be considered as a ‘customer of choice’ by the supplier and the business must be receptive to innovative ideas and not simply dismiss them as too challenging. Only when that status is in place will the supplier be confident to bring innovative ideas to the relationship.
Examples of innovation being delivered by CASME members include:
CASME members are encouraging their suppliers to present innovative ideas by:
Delivering Value to Stakeholders
While cost savings will always be a primary key performance indicator (KPI), Procurement can deliver additional value to the stakeholders and the business by:
Procurement’s delivery of value may be hindered by:
To successfully manage future demands and challenges, Marketing Procurement will need to continue to work collaboratively with other business units to obtain greater alignment. Increasing the use of relevant technology and data will assist the company in adapting to changes in the marketplace and the wider economy. By having a strong focus on delivering value, cost savings will naturally occur, further establishing Marketing Procurement as a valuable business partner.
CASME is the leading global network for corporate procurement teams with 15,000 members from over 170 organisations worldwide. Subscribers enjoy instant access to the latest procurement category reports, insights and participation in benchmarking studies, combined with unrivalled learning opportunities delivered through face-to-face and virtual events. To find out more visit CASME
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of Producers & Procurers iQ or imply endorsement from the publisher