Interbrand

Creating and managing October 2003

brand value

Mastering Procurement
Implementing Systems to Improve Efficiencies

Interbrand
130 Fifth Avenue
New York, NY
10011

Telephone: 212 798 7500

www.interbrand.com
 Mastering the Procurement Process
Today’s senior finance executives are more “Procurement gives a point person that you
than just “bean counters” – they are business can turn to. It provides more focus relative to
integrators who are in the position to take a insuring that the client needs and deliverables
holistic view of the business. This allows them are being met.”
to uniquely address the issue of procurement.
An issue where fewer relationships with ser- Once seen as an impediment or unnecessary
James Orsini vice providers are managed and maintained step in the process, now heads of marketing,
Chief Operating Officer
Interbrand
by the corresponding department-in-need. corporate communications, branding, design
Where satisfaction is key in maintaining cli- and related functions in client companies
ent relationships, more and more CFO’s are are now finding the procurement “system” a
stepping into the game, assembling dedicated viable solution. Providing the ability to man-
systems and teams to manage the procure- age all transactions correctly, procurement
ment process from not only a financial, but an supports the client’s cost efficiency needs
integrated and interpersonal standpoint. and expectations while reducing back office
processing time, minimizing waste and avoid-
An agency CFO who understands both the ing duplicated costs that might otherwise eat
business dynamics of his firm and the needs into margins. While meeting all of the client’s
of the client’s gatekeepers can play an invalu- audit and supply demands, a consolidation of
able role in the forging and success of a vendor purchases creates an improved econ-
client relationship. The strategic imperative omy, adding leverage in negotiating pricing
for the financial expert is to oversee spend- and payment terms.
ing for every assignment. This interest creates
a financially competitive environment as a To this end Rourke comments, “The largest
companion to the client’s course of business. advantage of working with a procurement
Invariably, procurement departments, external department is the ability to leverage purchas-
affairs and internal auditors are finance peo- ing power of entire organization instead of a
ple by trade. With a finance correspondent single division. A procurement area ensures
acting as liaison, all parties speak the same that all of these potential providers of goods
language. There is an innate understanding and services are well managed and financially
of the comfort level sought by the controlling stable, mitigating the risks when you are rely-
interest of the client, as well as the ability to ing on fewer partners to provide services.”
reconcile what account people are trying to
“The largest advantage accomplish for clients. Betty Ann Luff, Global Commodity Leader
of working with for Marketing Sourcing at DuPont Textiles
a procurement Stuart Levine, CEO of Stuart Levine and and Interiors, has witnessed first-hand how a
department is the ability Associates Management Consultants, recog- procurement system can improve communica-
to leverage purchasing nizes the benefits of the procurement process. tions service vendor relationships. She claims
power for the entire “I think that procurement departments should that audit results from this process promotes
organization instead of a be come the repository of industry knowl- intelligent sourcing decisions by comparing
single division.”
edge,” says Levine. “They have a certain not only agency year-to-year performance
– Alison Rouke
perspective that adds integrity and value. but agency-to-agency performance, driving a
Procurement is in many ways the epicenter continuous cycle of improvement. “The pro-
of the financial integrity and the linking of curement process has improved our agency
other operations.” Alison Rourke, Executive relationships and I think we have shown that
Vice President and Director of Fleet Bank’s it’s a positive thing,” says Luff. “We’ve noticed
Strategy and Performance Division agrees, that a lot of advertisers have expressed inter-
 Mastering the Procurement Process
est in finding out how sourcing decisions are Procurement makes dollars and sense to play-
made. The audit process is extremely cost ers on both ends of the fence. “I do see more
effective. Everything is under the microscope. and more companies going in the direction
It’s important to be looking at marketing and of procurement systems,” says Luff. “I think
recognizing that rigorous sourcing tools are there are enough case histories out there
not only about savings, but getting best value among the big advertisers to validate that
for communications dollars.” you do need a mix of sourcing and marketing
professions to get the most use out of your
As is the norm when integrating most new communications dollars.” Levine adds, “I think
business methodologies, the successful that as long as the procurement department
implementation of a procurement process continues to learn and emerge and works
An increased is a collaborative effort. By involving the with their internal client, it will become more
involvement in strategy agency account staff, the client’s procurement of a trend as companies outsource more ser-
enables finance departments and internal audit in developing vice sector scenarios.” Alison Rourke confirms,
executives to help fund the process, all parties work together toward “At the end of the day, we have to run a busi-
or defend systems or the same goal and the client relationship ness. You need to not just have any product
programs that meet the grows through efficient and cost-effective and service - you need the right product and
efficiency criteria and processes. “Learning how to become more service.”
discern which programs efficient is a win-win situation,” says Luff.
lack in that regard. “If it’s handled in a way so both parties can The bottom-line is procurement is now a
approve and agencies are partnered in crite- reality and financial executives occupy the
ria, procurement is highly effective.” position and have the expertise to the make
the supplier/client relationship mutually ben-
Senior finance executives are playing a eficial.
greater role in corporate strategic decisions
because they understand, and are ultimately
accountable for, the bottom line. “When a
CFO signs off on their quarterly report, they
are then insuring that all the data is accurate
and are in compliance,” says Levine. “If there
is an error, CFO’s are going to care more
than anyone else.” An increased involve-
ment in strategy enables finance executives
to help fund or defend systems or programs
that meet the efficiency criteria and discern
which programs lack in that regard. Agencies
benefit by conducting business according to a
more efficiently or economically sound proto-
col. New, managed communications systems
built around a realistic and proven model of
today’s marketplace yield spending efficien-
cies of nearly 50% greater than before, which
is pleasing to CFO’s and controllers of client
companies.
 Interbrand
Creating and managing
brand value

About the Author

James Orsini is the Chief Operating Officer of Interbrand North America, the world’s leading brand
consultancy with offices in 22 countries throughout the world. He leads the company’s opera-
tions and financial management - working to better leverage the combined offerings of the
Interbrand’s North American Offices, including sister companies Interbrand Wood Healthcare,
Design Forum and Brand Wizard Technologies.

About Interbrand
Founded in 1974, Interbrand works in close partnership with our clients to combine the rigorous strategy
and analysis of brand consulting with world-class design and creativity.

We offer a range of services including brand valuation, research, strategy, naming and verbal identity,
corporate identity, package design, retail design, internal brand communications, corporate reporting,
and digital branding tools.

We enable our clients to achieve greater success by helping them to create and manage brand value.

Interbrand
130 Fifth Avenue
New York, NY
10011

Telephone: 212 798 7500

www.interbrand.com © Interbrand 2003