In the press - Opinions and press coverage
The issue with procurement
18th January, 2007
I spent half an hour on the phone the other day to the head of procurement for a big brand that everyone would love to have on their client list. She'd phoned me to ask some questions about our capacity for little as well as big projects, and the kinds of brief we prefer. It was a pleasant conversation, laid back and smiley.
With the head of procurement? Surely not? Surely, this is battleground time?
It's a far cry from the first time I got a call from someone in the procurement department of a client we thought we were inches from winning. I was terrified. Everyone had said to me I'd be in for a tough time. And believe me, it was. I spent two weeks holding telephone conversations through gritted teeth, scribbling notes and tearing off bits of paper when I'd scrawled enough on each sheet to remind me of the pain and confusion. I had to re-examine the way our business works. There was me thinking our rates were fair - after all, we're a premium agency.
Not a bit of it. They wanted us to calculate a person's hourly rate based on their cost, overhead, profit and expected hours on the job. I was shocked to be sent a spreadsheet with a formula on it that told us how to calculate how we should charge. And which assumed each member of staff spends 95%+ of their time on billable work. But what about the time they spend growing the agency, keeping up to date, training, professional development, travel time? I asked, and got short shrift. Conform or be damned, it seemed I was being told.
Then I had a revelation: I realised that we're all in this together.
The client just wants to get on with making its money in an efficient way with as little interruption as possible. So it doesn't want the agency to go bust. It doesn't want its agency to take the piss. It doesn't want the agency to get complacent, or just use the win as a stepping stone to the next client. It wants to know you'll be there next month and next year, that the team it knows will continue to run its business. So procurement is there to make sure the marketing team (and sometimes the IT team) has the right agency partner, simple as that. It is there to make sure the agency makes a profit, so it will remain motivated and the senior team committed, so it will help make the client money in turn.
And the agency too wants to make a profit (no, really?) and keep its (expensively won) clients happy. The last thing the agency needs or wants is a senior team wearied by a long battle with a procurement department that's only there to set the ground rules. Everyone on all sides wants a team of enthusiastic people bristling with ideas, not resentment.
There needs to be some accommodation on both sides - compromise even. Agencies need to be prepared to reduce their creative process and agency output to numbers (but to be honest they should already be doing this, otherwise it's difficult to plan anything), and need to be prepared to audit their time precisely - this was one of the biggest challenges for my own agency. Marketing clients need to bring procurement in as early as possible to make sure all parties understand the constraints, processes and (most importantly) goals ahead of time. Procurement must understand that agencies can't predict how long creativity will take, or who will necessarily be involved, in advance. Which means that together we have to agree how to evaluate our costs as we go along, and be prepared to change things to suit the practical reality of working together.
So, my revelation: it's not a battle, there is no conflict. It's a conversation. It should be laid back and smiley. Us and procurement - we need each other, and if we do it right (even if it does mean the odd spreadsheet) we end up happier together for longer.
Felix Velarde, published in New Media Age, 18.01.07