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April 6, 2008

Procurement: Take the positive approach

For years, many events have been organised by companies for the sake of it, with little effort made to properly factor in the costs or measure the return. But companies have become far more cost conscious, with many introducing a procurement professional – either internal or external – whose job it is to squeeze value out of every corner of the company. All of a sudden there’s real pressure to show what companies are actually getting from their events.

Of course, there are elements of the events industry that feel this approach is cramping their creative style, but the best events agencies actually welcome the change, and are also well versed in managing the relationship with procurement, which has become a vital part of successful event organisation.

“In our experience, the increasing involvement of procurement professionals has been a very important development,” says Ian Irving, marketing director at events organiser Sledge. “Now we are actively briefed to build measurement metrics into much of what we do. We have been working with procurement departments within some of our longest standing clients, people like O2 for example and more recently Microsoft, to ensure the best service levels possible and to maximise return on investment. Far from being threatened by this, we have found it an immense learning experience. And after all, if value can be seen and measured, the outcome is just as likely to be an increase rather than a decrease in budgets.”

Mark Taylor, director of events at Grass Roots, agrees adding: “Procurement is there to play a role on behalf of the client which suppliers need to accept. The onus is on suppliers to demonstrate value and build trust. These are the foundations of all good business relationships.”

The problem with procurement staff in many cases is that they know very little about events, while events managers and external organisers are bound to lack in-depth knowledge about company financials. That’s why it’s key to get procurement staff involved as early as possible in the event planning process, so that they can get to understand what’s involved, while feeding back immediately on budgetary matters.

“Both sides must learn to understand each others’ objectives,” says Jeanette Wright, business development manager at conference, hotel reservation and event management services company Inntel. “For example, not all events should be treated the same from a budgetary perspective. Training courses can generally be commoditised like an accommodation booking. However, a large, one-off event like a product launch or AGM will need to be assessed on a more individual basis as it is likely to be more creative, incorporating an original ‘wow factor’ to increase effectiveness, which could be anything from a theme, involving tailored entertainment, to an unusual venue.”

Taylor agrees, saying: “In practice, we’re finding procurement may get involved at any stage, but the best results for all parties occur when their involvement is as early as possible. In doing so they can better understand the aims of the event, the demands placed upon suppliers and the level of expertise required. Then there is less risk of an event being compromised or even cancelled as budgets are slashed late on in the organisational process.”

Companies and external organisers can aid this by educating their staff. “Proper training about the nuts and bolts of event creation is long overdue for procurement professionals,” says Irving. “Perhaps its time for agencies to put their talents to good use and train the procurers!”

Meanwhile, agencies like Grass Roots are helping their staff to understand the procurement perspective. “We have put a number of teams through training that better equips them to understand the role of procurement and how to get the best out of the relationship,” explains Taylor.

What is clear is that communication and compromise on both sides are essential. “It’s early days for everyone,” says Irving, “but eventually I am sure we will all benefit.”

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