It’s written in 10ft letters: suppliers don’t like dealing with procurement. They invest vast amounts in avoiding your team and going directly to the budget-holder instead.
During a conversation about business travel it was pointed out to me that airlines went to great lengths to deal directly with the journeying employee – enticing him or her to get out the corporate Amex and pay for added extras such as business lounges, chauffeurs and upgrades. (see Airline price hikes could follow profit drop
This, I thought, is why the airlines invest so much in massive billboards getting their brand across, because why do it if you’re happy dealing with a central agency, such as procurement?
The thought recalled another conversation with a senior buyer when we joked about IT advertising. Why does Oracle put full-page ads in the Financial Times
? Because it wants finance directors to ask: “Is this as good as Oracle?”, when IT or procurement present a new project. But why should senior management care what computers you run? All that matters is that they do the right job for the business.
Just think, if all the money invested in these kinds of advertising was put towards reducing rates, there would probably be enough to boost supplier margins at the same time. But this is the point – the brand promotion works, and procurement faces an uphill struggle against it.