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April 16, 2008

PROCUREMENT:Hindrance or help?

Procurement in live events has received some pretty bad press over the past few years – often through fear of the unknown rather than a justified position of panic. From the end-clients point of view it makes sense, more so the higher up the management chain one goes. The chief executive will be happy with the ‘global management solution’, the finance director will be happy with the ‘justified figures’ and the directors will be happy with the ‘tidy process’. Of course, there will always be a few in the chain who complain because ‘old relationships’ with ‘trusted vendors’ will be questioned – and often binned.

“The reality is that procurement, from the outside, looks like a fortress, while from the inside it now provides corporate buyers with a comfortable view down upon us, the ragged marauders,” says Mike Bell, managing director of live event production services company Clever Works. “To streamline and create order, the procurement process makes business sense for our corporate clients. Argue otherwise and you could be putting your company out of business in the next few years.


Bell: "Who are these strangers – these ‘wannabe
accountants’ – who are thrust into our client relationships?"


“The concerns, that many harbour are: who are these strangers – these ‘wannabe accountants’ – who are thrust into our client relationships?; what do they know about what we do?; what do they have to offer us as suppliers, as craftspeople, as ideas and creative suppliers?; indeed, what do they knowabout the live communication industry?” continues Bell.

Getting a feel for the business

Ian Irving, sales and marketing director of brand experience agency Sledge, echoes the concerns of many when he says: “It is imperative that the procurement teams (who are becoming increasingly involved in the decision to buy marketing services) step out of their silo’s and get a feel for the benefits of communicating to consumers in the live environment. It should be the remit of the marketers to understand the benefits and engage the buyers, so that everyone understands what is trying to be achieved.”

However, before we dismiss these new players in the live marketing game, as Bell points out, there are a few key truths to appreciate:

  • Procurement teams are here to stay;
  • Procurement teams are our purchasing (value-seeking) clients;
  • Procurement teams are facilitating their (service-seeking) clients;
  • Once procurement has stepped out of the buying process (directly), and identified value and service from a vendor pool, the winners of the pitch can then start to work with the end-client;
  • Don’t fight it.

Adding credibility

In short, we should embrace what procurement has to offer the industry. “Procurement is a strategic approach to purchasing that can add credibility to the meetings and events industry,” says Peter Rand, director of industry relations at events solution company Zibrant. “All parties in the ‘mix’ require education as to what the others bring to the table. Whether procurement specialists themselves, corporate marketing or events departments, venues or event/venue-finding agencies, there is no need for distrust if there are clear objectives and agreed processes for procuring services and facilities.”



Rand: "Procurement should not be involved in what
a company needs in the live marketing arena"

However, Rand is clear in his demarcation of responsibilities within this relationship. “Procurement should not be involved in what a company needs in the live marketing arena. This is the responsibility of the marketing team. Procurement's role is to ensure a robust and equitable process is followed in fulfilling those needs....and, yes, on occasions questioning whether alternative means to an end have been explored.”

Rand’s thoughts are complemented by those of Norwich Union’s head of corporate events and hospitality, Andrew Latta. “I think that the question of whether we can trust someone who doesn't understand our industry to make the best decisions over what a company needs in the live marketing arena is a bit misleading as I feel most people believe that the Planner-Supplier-Procurement relationship is a three way partnership that tends to fall down if one or another is not working together,” he says. Obviously Latta approaches this from the perspective of a corporate planner, but he accepts there are many organisations that procure their event suppliers but have no in-house planners.

“Each team has a part to play,” he continues. “The procurement team has its specialist skills just as the planner and suppliers do. The challenge is not whether or not the procurement understands the events industry, rather that the three teams are working together to ensure overall objectives are understood and achieved.”

A professional view

Whatever your standpoint, it is important to maintain perspective and remember that procurement is a profession, and, as such, it is designed to offer a review of the business case and appraisals of investment. In so doing, it helps create specifications, then agrees selection criteria, and thus help shortlists suppliers.

The overall benefit that this growing profession should offer is fairness and control – widening the purchasing practice – and introducing the right number of valid agencies to the initial, and possibly, secondary pitch.

Latta sums up: “Event procurement has been around long enough for all parties to understand the importance and benefits that this can bring to the industry. It’s also been around long enough to realise that, from a corporate perspective, it’s not going to go away, it’s only going to mature and become more effective.”

Over the next two weeks we will also be looking at whether procurement professionals needs to have specilised training for the events sector and how procurement and live marketing can move forward together


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