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Procurement / Business Strategy Strategy for creating a World-Class Procurement Organisation, Integration with Business Strategy and Planning.. Ability to influence the organisation's overall strategy. Selling the Procurement Business Case

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Old 10-17-2007, 01:24 PM
TJS TJS is offline
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Default Creative Services - New agency relationships with procurement

There appears to be a developing trend whereby creative agencies are engaged by procurement departments rather than traditional relationships with marketing. In some areas, the relationship with marketing departments is purely operational and no longer financial as such. There are a number of reason for this but as as an example, only 11% of the FTSE 100 companies in the UK today have a marketing director on the board or indeed in the management levels below that. Procurement however do have a significant presence. Coming from a creative agency background, I'm exploring how agencies should develop strategies to continue and develop realtionships with marketing departments AND now procurement also. This may not be as simple as first thought as to some degree, marketing and procurement are at odds. Procurement and marketing continue to drive the cost of production design downwards and agencies respond favourably because 'we' know that fundamentally, marketing departments are inefficient. Controversial and a gross generalisation I know, but bear with me. This allows agencies to offer menu pricing, as we are safe in the knowledge that we can now legitimately charge for authorís corrections. Also, agencies typically over-service and under charge their clients, albeit they recoup just enough. More to the point, agencies darenít give away relationships with the client to another agency. Everyone on both sides understands that this is the basis for the financial agreement. Unfortunately for the client businesses though, the savings never actually materialise significantly enough over time to continue the status quo and therefore the now familiar rounds of re-negotiation take place with increasing regularity. Clearly agencies can't keep on reducing costs so we need strategies to break the cycle - help marketing to be more efficient (rather than exploiting them - there - I've said it), and give procurement genuine savings through relationships with agencies as opposed to the current 'oil & water' situation at present. This is a brief explaination of the work I'm doing but I'd welcome any thoughts at this stage in the hope we can begin a useful debate.
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