Procurement is a strategic partnership – not a box-ticking exercise
By our News Team | 2022
Actively involving procurement in key processes makes for better quality marketing-sourcing decisions, says CMO Council.
Marketing should aim to leverage procurement’s expertise to select the right agencies and vendors that will provide value to the brand and align media buying and other activities to the larger business strategy.
This is according to the Chief Marketing Officer Council (CMO Council), which has found that, currently, only 26% of marketing leaders actively partner with procurement in the identification, selection and negotiation of marketing vendors.
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The report, produced in partnership with professional services firm KPMG, covers critical capabilities of marketing sourcing and how CMOs can enlist procurement to help marketing teams make better decisions. The report found that CMOs who more actively involve procurement in marketing sourcing enjoy a more positive impact on the overall maturity and quality of marketing-sourcing decisions.
“Think of procurement as a strategic partnership that spans planning, vendor analysis, selection and management, rather than a box marketers need to check in contract negotiations,” said Donovan Neale-May, Executive Director of the CMO Council. “A rudimentary level of involvement will likely not generate any significant value for marketing.”
According to the report, CMOs should involve procurement:
- To develop a global and local marketing sourcing strategy and establish sourcing processes.
- To create a framework for identification and selection criteria, performance metrics, etc.
- To optimise MarTech planning, vendor evaluations and contracting for better integration and alignment with the overall digital transformation strategy.
- To review the existing agency landscape and contracts, and to consolidate rates and spend.
“Considering the uncertainties in the current socioeconomic environment, marketers are facing increased pressures to elevate performance and meet short- and long-term goals while facing added pressure on budgets and spending,” said Jason Galloway, Customer Advisory Leader and Marketing Consulting Practice Lead at KPMG LLP.
“Marketers can generate more value through a closer, more strategic partnership with procurement, leading to more robust marketing sourcing, management capabilities, and measures to assess performance.
“In fact, the new CMO Council report shows that the majority of marketers that have an effective working relationship with procurement have greater maturity in digital and could potentially unlock revenue growth through MarTech.”