Viewpoint: Learn to love procurement

Louise Cretton

The growing attention paid by procurement professionals to the buying of market research is, I would suggest, a force for good. It may be the catalyst we need to get our house in order and to achieve some of the objectives we have discussed for many years now, such as contributing ‘at the top table.’

I know that procurement is a dirty word in some quarters, that it signals a price-driven market, reducing creativity, demoting our services to a commodity offering. Cries of ‘we are different’, ‘they don’t understand the complexity of what we do’ are heard. They are the same cries that were heard in the 1980s and 1990s in advertising and media agencies. Magic and Logic by Marilyn Baxter is a great little book produced by ISBA, the advertising and media agency association the IPA, and the procurement trade body CIPS, in response to those concerns, which seeks to explain the conflicting interests.

Media and advertising agencies learned not just to accept the attentions of the procurement function, but to rethink their business model around the notion of representing and justifying their value to clients in a confident way. Market research is one of the last areas of marketing services to begin to be scrutinised by procurement. However we feel about it, procurement is on the march and we cannot resist its influence. It is surely far better to understand what it is it wants and to engage with it in a productive manner.

As a result of a piece of industry research initiated by ISBA, I have heard at first hand the agenda of a sample of procurement professionals and been able to assess its impact. Some large companies have had a market research procurement function for many years, but many others have introduced it only relatively recently. In almost all companies this function reports to finance and to the FD.

So, yes, there is bound to be interest in managing costs. However, I would suggest that, with the finance director at the head of the reporting structure, procurement personnel are tapped in to the achievement of corporate strategic goals and have broader influence perhaps with the corporate structure than the marketing and market research/insight functions. Cultivating rather than trying to ignore or avoid procurement may help us to achieve the greater strategic influence we believe we should have.

At present, it appears that procurement in the area of market research is in its infancy in many companies. Procurement professionals are focused on two main targets: managing cost/value to the business and establishing an appropriate roster of agencies to meet business information needs. The fact that they have measurable targets does not understate the determination of these procurement personnel to achieve them for the good of their companies.

If you are reading this sitting in an agency, it is worth thinking about what it is that justifies your place on a company roster (many report the desire to reduce the size of their rosters to a manageable number with whom they can build stronger relationships), and whether you are as transparent and honest as you might be about your costs. Indeed, could you break down your costs and explain them to someone outside of the MR function in such a way that they understand the value you offer?

Procurement wants to understand your business and you can help this process. Procurement professionals know that they need to learn about our world, how it is structured, what constitutes quality, where the parameters of ‘our standards’ lie. We can help them by engaging with them, not by pretending we wished they did not exist.

This is where the client-side researchers and insight people can help, too. They can facilitate the relationship with procurement. There are three parties involved in the buying of research now: the client-side researcher, the procurement person and the agency. We are being offered the chance to offer our services on a professional commercial footing, where trust and reciprocity of interest characterise the relationship.

Before I conclude, I want to make one particular plea: that we learn to value our people. By that I mean the intellectual contribution they make to a project. That means being honest about the time they are likely to spend thinking on a project, and the skills and experience they bring to make a difference to the client's business. This honesty and transparency will help procurement focus on value not costs, difference not commodity. Longer term it may affect recruitment; shorter term we need to look at our business models.

The reality of life is that procurement will only grow in influence. We must learn to be more effective in our commercial engagement; we must embrace concepts such as service-level agreements, rate cards and fully transparent costing models.

Procurement professionals must play their part, too. Auctions, endless bureaucracy, even aggression, have not helped their cause. We are fond of stating that ours is a creative industry, disciplined by standards. Procurement departments will believe us, and respect us, only if we give them the help and the tools to fully appreciate the value we are able to bring to solving business problems.

Louise Cretton is an Independent Market Research Consultant.

International Journal of Market Research 52(1), 2010

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