Events and Procurement – Working Together for Success
The larger the organization and revenue stream, the more likely it is that the procurement or purchasing group will be involved with event spending. Large corporations typically have policies in place designed to help them save money and minimize both financial and legal risk. Any event with a budget greater than a certain threshold will trigger additional levels of purchasing request review and approval.
Event and procurement teams often have opposite styles and mindsets. Procurement is traditionally commodity-driven, while events and marketing are all about services, which are often more difficult to quantify. Event planning can often be very reactive, but purchasing systems often preclude short-term actions or payments.
Chances are strong that the two departments are also structured differently: you may be responsible for global events for a specific product group, while procurement may be organized regionally, so there isn’t a one-to-one map of contacts.
But procurement can add a lot of value to events. Your procurement rep is the purchasing expert. Not only can they help you by saving money, they can also provide guidance and assistance throughout the process, be your liaison with the legal department, source, vet and negotiate with suppliers and even take on the burden of ending poor vendor relationships.
After speaking to representatives from several large corporations, it became clear that the teams with the best relationships were the ones that took the time to listen and learn from each other.
Teddy Oberts, CPSM, has been in procurement roles for the past nine years. His first involvement with purchasing for event marketing was at Dell, where he held the role of global category manager for marketing meetings and events. Oberts is now putting his knowledge of events and purchasing to use at Eved, a startup that offers a B2B digital payment and management software solution for the meetings and events industry.
Oberts stressed that communication is vital to building and maintaining a positive relationship. The more information the events team can provide in advance, the better.
“The strategic sourcing process is best accomplished as a team effort. I’ll look to you for your industry knowledge and I’ll bring a robust process to guide us. By working together we can keep each other out of trouble and work much faster – It’s truly a partnership,” Oberts said.
Planners often form close relationships with suppliers. When you spend that much time working together, it’s natural to form friendships. But it's important to keep the friendship separate from business. Both you and your suppliers should expect that you won’t always be able to work together, and sometimes RFPs will require that vendors bid for work.
Having a preferred supplier program in place helps everyone. Preferred suppliers are vendors who are shortlisted internally based on factors including discounted pricing, value-add, capabilities, and performance. Procurement knows that those vendors have gone through the required processes and legal documentation, which often also includes brand training programs.
The result is supplier partners who can act as an extension of the company brand. This minimizes risk and makes it possible for procurement and legal to not be as involved in every transaction or contract. This doesn’t mean that you can never use a new or different supplier but there should be valid, justifiable reasons for doing so.
By their very nature, events will always have more suppliers involved than in any other type of business transaction. If you are exhibiting or hosting a meeting, there will be the location or show-specific general service contractor or decorator, electrician, audio-visual services provider, internet provider and caterer, as well as additional suppliers.
While it is possible (and highly probable) to centralize many of the key functions through one or two preferred suppliers, there will always be exceptions. For example, you may wish to engage a vendor with regional expertise if you’re holding a meeting in a different country.
Most agencies are more than happy to be the “one-stop shop,” running other vendors through their own payment systems. This streamlines things for the event manager and makes the process easier for the procurement rep, but it requires a lot more money. A ten percent or greater markup is not unusual for these management services. Again, sometimes this may make sense but in other cases it does not. Procurement can help you weigh the costs and risk and make more informed decisions.
Stefanie Turco is the Sub-Category Lead for Events NA within the Global Procurement Organization (GPO) at SAP. Her background is in events: her first role at SAP was as a tradeshow manager. She went on to co-found Event Strategy Group, an experiential marketing agency, before returning to SAP.
Turco can empathize with event planners. Procurement systems are complex, and not everyone who is responsible for event execution is experienced. In addition to the skilled event professionals, there are also entry-level planners and admins who are tasked with what may seem like a simple internal meeting that ends up becoming much larger. Her inside knowledge of what needs to go into an event allows her to provide guidance on parameters that will influence the purchasing process.
“I’m trying to make things more user-friendly for the event marketers who need the services, and to humanize the experience,” Turco explained.
“It’s very technology driven, but [procurement] can’t just sit behind the system. We’re focused on engaging with the people who need to find vendors and pay for services, making sure they understand how to do it and who to do it with,” she added.
Ric Rogers, strategic director of events at SAP, works closely with Turco. He appreciates her event and hospitality experience because it makes his job easier.
“If you can get someone who is transparent and willing to discuss the realities of the situation, you can save the organization hundreds of hours of needless busy work,” Rogers said.
He continued, “That said, I think there is an inherent distrust that only communication can break down. The global purchasing organization is trying to understand and help (and $120 for a gallon of coffee can be hard to understand), and the events team needs GPO to trust that they really are focused on delivering business and customer success and not about planning expensive parties.”
To achieve true success, the two groups need to work closely together. Event managers shouldn’t rely on always being able to push things through just because of an executive or industry need. And purchasing needs have the ability to be flexible when a new vendor, supplier, or out-of-norm purchase is required. Both groups have roles to play in bringing value to the organization. Keeping procurement involved from the outset allows your suppliers to truly become trusted partners, and helps everyone meet their business goals.
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