The hidden costs of internally managed procurement of creative production and print
I had the opportunity to sit down with a procurement professional from an east coast financial services company last week. About half of the agenda of our meeting included a review of the benchmark report from WBR Digital, “Revenue Responsibility and the Evolving Role of External Procurement and Marketing Capabilities.” The discussion covered many of the report’s main results regarding cost reduction and how to align procurement and marketing objectives. During the discussion, though, I noticed something new in the data. I found a relationship in the data that suggests that the benefit of using BPO for creative production and print procurement extends well beyond cost reduction to brand control and quality; key marketing metrics.
- 7% of respondents reported “Disparity of brands” as a pain point when internally managing print procurement
- 56% of respondents who have undertaken a formal assessment of their company’s creative and marketing procurement spend report “Exposure to level of control over brand and quality” as an important value received.
These two data points taken together seem incongruous. If only 7% of respondents reported disparity of brand as a pain point when internally managing print procurement, why is, at 56% of respondents, the reported benefit received of an assessment of creative and procurement processes so high?
I see two distinct possible reasons:
From a procurement perspective, the primary goal of an assessments is to uncover cost savings opportunities. Marketing execution companies such as HH Global deliver savings via spend aggregation/advantage opportunities, streamlined technology, and expertise of their staff. A simple, non-threatening explanation is that post assessment, respondents found the added benefit of exposure to brand control and quality - an unexpected value-add. In other words, they found the benefit of visibility, even though the company did not have problems with brand control and quality.
More likely, though, and perhaps a bit more threatening to internal management of print procurement, is that the assessment exposed real issues with brand control and quality. It is likely that the procurement teams in these companies were not aware of brand control problems, but the assessment uncovered major issues in consistency and control.
The second explanation makes the most sense to me. If it is true, brand control and quality is a significant hidden cost of internal print management and, if managed as such, marketing and procurement can be at odds and with misaligned goals. The truth is that the challenges of managing brand consistency and quality across multiple divisions, channels, print suppliers, and geographies internally taxes marketing departments and procurement departments alike.
Bring on the solution
The good news for procurement professionals is that that they can bring a solution to their compatriots in marketing that addresses brand control, quality, and consistency issues while also meeting savings objectives. The first step, though, is uncovering the hidden costs of internal management of creative production and print procurement.