Knowing how to work with the procurement team at your company will not only improve your business relationships, but it will better equip you to meet your marketing objectives.
Procurement Goes Way Beyond Purchasing
For years, any buying decision was simply called “purchasing.” It was the only term that existed for the process of ordering, receiving and paying for goods and services that a business needs to operate. The key value of a purchasing team was to achieve greater buying power due to volume.
Over the last few decades, industries developed the procurement function in an effort to take a more strategic approach to the purchasing process. Procurement takes a wider view of purchasing, and moves beyond a tactical transaction to consider the total cost of ownership (TCO). It represents a shift from price-per-piece to broader TCO considerations, redefining what best value really means. As a result, options like outsourcing are included when making decisions about how to meet an organization’s needs.
Procurement is typically a core component of a company as it factors into productivity and financial performance. It even touches on how the public perceives your company and brand. For example, if being environmentally conscious is important, your procurement process likely includes criteria to ensure you’re selecting vendors who support those values.
What Does This Mean for Marketers?
If you are a marketer at a sizeable company, you may be expected to function more strategically than simply making a purchase with a corporate credit card and saving the receipt. Procurement will likely be involved anytime you need to purchase marketing services or products.
This isn’t a bad thing! You’ve got a whole team doing things on your behalf to save you money, determine best quality and value, and negotiate terms. Win! What you do need is a collaborative, open mind about the process. Ultimately, your procurement partners help make you look good, and that’s the kind of positivity we need in life.
Procurement will have their hands in several activities that may impact your team.
- Requirements identification
- Gap analysis (build-or-buy decision)
- Market research
- Purchase request authorization
- Purchase request approval
- Supplier identification
- Quote or proposal process
- Vendor evaluation
- Contract negotiation
- Payment terms
- Purchase order process
Procurement processes vary depending on the size of your organization, scope of the need and financial commitment. Work with your procurement partners to understand their process, and communicate your priorities so they take those into account when strategically calculating total cost and value.