Marketing and procurement driving growth together

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Driving growth through cutting costs and increasing effectiveness has become a priority for many businesses. This has amplified pressure on marketing departments to work with procurement and look beyond simply reviewing contracts and suppliers.In many large organisations marketing and procurement teams have been collaborating for years and have already achieved substantial cost and efficiency improvements. These include better suppliers, improved contracts, and overly increased performance. Despite this progress a recent study carried out by Charterhouse found that Europe’s top 500 businesses are missing out on savings collectively worth €716 million.When every contract and supplier has been reviewed, procurement will find itself in a position where cutting additional costs could impact marketing performance. Demanding too much from suppliers will result in cut corners and a deteriorating relationship between marketing and procurement.
Encouraging Innovation
The challenge is to build on the first wave of savings achievements and foster a new culture and mindset within marketing.  This can take the shape of encouraging new and innovative ways of working. Examples include collaborating directly with media owners, offshoring or insourcing marketing production, standardising and sharing materials across markets and reengineering processes.Once procurement has gained a sufficiently in-depth understanding of marketing spend, the team can go after the Holy Grail: wasted spend. It is easy to invest much time and resources trying to shave three or four per cent off fees, however, a much greater saving can be made upon determining what spend does not achieve any results.  In the words of John Wanamaker, Philadelphia Department Store Founder in the 1880s: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”Identifying this wasted spend is the challenge that most forward thinking procurement teams have set their minds to. With the right tools and techniques to enable effective process analysis, mapping and re-engineering, there is the potential for marketing teams to double their productivity with their current budget.

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