PepsiCo’s closure of its global marketing procurement department in November sent shockwaves around the industry… well, kinda.
After the appropriate amount of shock and awe we all started to acknowledge that the brand’s ambition of seeking to "evolve its operating model to be more efficient and effective" was very reasonable. Procurement is a process that is now well over a decade old and while it once provided a strategic and controlled solution, today’s organisations are looking for more flexible, creative solutions.
The team at Reforma has been banging this particular drum for a while, having gone so far as to commission a survey this summer to see what the wider sector thought. We proposed that the RFX process, especially when related to marketing, has been calling out for change for some time and it turns out that we are not alone in this belief.
Over recent years the marketing landscape has evolved: marketers now work in real time. Planning is still king but in the age of social media and digital, brands reap the rewards of being reactive and procurement must adhere to these changes in order to remain a valued process. Results of the Reforma survey showed that 74 per cent of respondents believed the RFX approach is antiquated when used for marketing, with 66 per cent stating that their organisation would benefit from a different approach to procurement.
Our belief is that change needs to come in the shape of a less rigid approach. The process of the future needs to accommodate the inherent creativity in marketing, as well as allow communication between all stakeholders to be clearer.
Marketers who participated in the Reforma survey cited their main frustrations as a lack of flexibility in the existing process along with RFX’s inability to let them be creative. The main beefs from procurers were the lack of time they were given to develop the correct RFX documents, as well as the frustration that internal stakeholders were not committed to the procurement process.
Despite the issues listed above, 67 per cent of respondents were continuing to utilise the RFX process, presumably because this is the process inherent in their organisations. It was interesting to note that across both groups, the newer the candidate was to the sector, the more unsatisfactory they appeared to find the process, suggesting an issue of institutionalisation within our sector. Certainly this is something we at Reforma have encountered repeatedly.
With PepsiCo having led the charge, what then could we expect the brave new world to look like? At Reforma, we advocate consultancy, ensuring a circle of communication between all involved in the buying process, and monitoring these to ensure the desired results are being achieved. Brands’ needs are more extensive than ever and knowing where to go for the right service, at the right price, at the right time, is crucial.
Let’s hope then that 2016 is the year we finally shred the RFX documents, draw a line through the tick boxes, throw out the procurement handbook and move towards a new era of consultancy. After all, according to our survey, it appears it’s not only PepsiCo which is thirsty for change.
☛ Bob Rodwell is senior consultant at Reforma Consultancy.