Turn the tables on the Procurement people and equip yourself with the right tools
How much background research do creative businesses undertake on prospective suppliers?
Generally, it depends on three factors:
- The type of work you are looking to buy,
- the feedback you get from contacts you value, and
- facts you can derive from the usual sources.
Turn the tables then and consider the amount of research a prospective buyer undertakes on your business. By surprise the relatively scant details you glean that underpin your supplier selection are no worse than the effort they apply to the selection of you.
If your business card includes the title Procurement then this has much more serious consequences. Tina Fegent’s commentary in Media Week picks up this theme, as highlighted in the survey conducted by the PIU. Over 90% of Procurement pro’s surveyed by their industry body sited that they spend 25% of their day on market research, but more than 90% receive their market data from their suppliers.
Is this an appropriate source of industry information to enable business decisions to be considered, as these procurement experts seem to be receiving most of their intelligence from the very companies they are looking to commission work from. Where is the independent viewpoint?
Tina reinforces the view that many digital agencies are not fully understood (by procurement). They bleat that the ‘D’ word does not resonate with procurement-led buyers, and that digital agencies are a specialisation that is particularly misunderstood because its difficult to apply a value-based model to the sector.
Tina argues that an over-reliance upon supplier sources of industry data is risky- they are feeding you market information that they have been responsible for sourcing- ‘they want to play a game in controlling the data that they will provide you’. She argues (rightly) for better training for procurement people, as there is an important debate to be had about a lack of ‘qualified’ executives.
Those design businesses that are of sufficient standing to be lead agency working with global brands will know how important it is to be on the right side of the procurement team. The more effort designers apply (to explaining how the sector business model works) will help to cement the relationship, and mitigate the effect of applying blunt costing models to the agency.
But if, as Tina suggests these buyers simply don’t have the budget to invest in sector reports and independent market research then it will be up to the design sector (particularly the digital one) to reinforce a value-based costing model.
As crazy as this sounds it is not beyond the realms of possibility to demonstrate how you can meet the supplier criteria expected by procurement teams, and still maintain your autonomy as a credible business that can generate a reasonable profit from your work.
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