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OPINION8 October 2009

Who loves procurement?

So should we embrace procurement and what would that mean anyway?

We have been having some interesting times with, and discussion about, procurement recently. My feelings about procurement within clients used to be a mix of fear and confusion. I don’t know any procurement people personally yet they do seem to be playing a greater role in my business life. So should I now try to embrace them? And what would that mean anyway?

Certainly the procurement concept has revolutionised marketing. Within the marketing discipline they seem to have focussed on media first, thus splitting up the media and advertising folks. Then they started on advertising and made them charge on a per day basis and now they are looking at research.

What does this do for our pricing model? What will they want from us and what will they offer? Of course there will be some pressure on margins as they are there to negotiate but surely they will be offering something else in return?

Also it must be hard for them coming to grips with the research industry. We are far more fragmented than either media or advertising, no big clients have just one research agency! So how can we educate them on the reasons for this or do we have to take a long hard look at why research is like this in the first place?

Anyway, at this stage I would just love some ideas or thoughts. I really am not sure what we should be doing but  suspect doing nothing is the worst option of all…..

@RESEARCH LIVE

18 Comments

10 years ago

My day has just been ruined by the arrival of a framework agreement from a high spending commercial, not public sector, organiisation which wants to reduce market research spend and the number of suppliers it uses. Whilst don't disagree with their aims, the method employed by the consultants they have brought in can only be described as onerous and ridiculous. I estimate it would take up tot 5 man days to collate all the information they are requesting - some of which is frankly laughable and some of which is just unreasonable. For example, breaking down costs for "typical projects" into 20 separate elements. Do they realise how much work they are causing so many agencies and to what end? Some of the best agencies may decide that they just cannot spare the time to fill it all in. All agencies do their costings in different ways, so it is highly unlikely that they will be comparing like with like. I could carry on but I'm getting too depressed.

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10 years ago

I have similar concerns and have had some bad experiences, I just am not sure if it is procurements fault entirely, I suspect they know little about what we do and it is our (or our clients or both) job to explain it to them. As mentioned, I have no answers just questions at the moment....

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10 years ago

The involvement of management consultants in advising clients on research procurement is especially alarming. Clients assume, not unreasonably, that the consultants are offering expertise in the area, but management consultants generally know nothing at all about the research industry or the research process. An example: a client's management consultancy decided the client was spending too much on market research. The consultants claimed that the client was duplicating effort, collecting the same data over and over again. Their evidence for this? In survey after survey, the client kept asking customers' (respondents') ages, gender and social class. Makes you want to weep.

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10 years ago

Sorry to say guys but your clients might just using the wrong consultants. I have worked in marketing procurement for a number of years at some of the biggest spenders in the UK and have carried out Market Research Roster reviews with the internal researchers for a number of reasons. Complacency drifts into the relationship which is quite often very personal between researcher and agency which is why certain agencies follow researchers from job to job. There's nothing wrong with having an agency on board that you trust but it’s important (now more than ever) that the client is getting good research at the right price. The reason consultants have a tendency to ask for so much detail is because of the way some agencies have priced work in the past with very little transparency. I don't agree with the onerous approach but a certain level of detail is required in order to ensure the client is getting value for money. The other thing to bear in mind is that this level of scrutiny is only going to increase - so you're going to need to embrace it or continue to have these challenges....

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10 years ago

Dan, very glad to have someone from the otherside join the debate! What do you think research agencies should be doing to work better with procurement and visa versa?

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10 years ago

Hi Steve - I wasn't sure how my post would go down... If I were an agency I would look to be introducing transparency without procurement involvement and if its done right it will work across all of your clients. Procurement will then look at a roster and your agency will stand out as the one that has been proactive and will become a standard to which the other agencies will be encouraged to attain. Agencies are forever trying to distinguish themselves as leading edge in their research - well think of this in the same way (maybe with a bit less verve :)). The other thing to bear in mind is that if procurement come hunting for efficiencies and are met with a well ordered and transparent response they will go and hunt elsewhere (digital, PR etc etc)

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10 years ago

I speak for myself as a member of the Independent Consultants Group, though I know that several members share my opinions. My experience of trying to win market research projects in the public sector is entiely negative. This is because public sector procurement departments are tasked with selecting the best suppliers for projects but their selection criteria are not relevant to indies like me. By definition we are not employers and so we cannot tick the boxes on the Pre-Qualification Questionnaires (PQQs) which ask for our equal opportunities policy or our environmental policy and other similar requirements of employers. Nor is it reasonable to expect us to carry £5million plus of private indemnity insurance or public liabilty insurance. Thus we are autoamatically excluded from the selection process by the PQQ. This means that the public sector may frequently exclude some of the best market researchers in the country. The procurement professionals and the market research professionals need to communicate because at the moment they exist in different universes which means that the public sector does not have the oportunity to be supplied by some very talented market research professionals who happen to be independent consultants.

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10 years ago

I must say we hit similar issues in the public sector in our early days. Dan, what do you think about the procurement desire to have fewer agencies which leads them towards selecting larger ones? Is there a good way round this - pursuading companies that specialists are often better than generalists?

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10 years ago

I would be interested to know what 'transparency' means? As standard, we give total job cost broken down by field, incentives, executive, expenses (which are charged on at cost) etc. We also give day rates (although they have no relation to our costing model - if we charged on a strictly time basis we would price ourselves out of the market) if required. Are we missing a 'transparency' trick?

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10 years ago

Steve - I have always favoured a mixed roster with some large agencies and some smaller specialists as this gives the client the opportunity to retain 'choice' but in a way that enables the clients company to realise value. The Public Sector Procurement question is one I have little experience in so I can't comment on it. Claire - Transparency...sounds to me that you are providing a lot of that already so its just a case of bringing it together in a format that the client is looking for and I believe that will put you ahead of the competition.

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