by Jan Malasek | Jul 1, 2020 | Strategic Sourcing
F100 Global Retailer was looking to source Agency of Record (AOR) in their largest division (Latin America). The AOR contracts were expiring, and client wanted to source a new agency for online and offline requirements. They had not replaced their agencies in over 3 years – the annual current spend of $67MM in was divided among 11 incumbent agencies. The current fee structure thought to be high (proven correct with savings of 50%), and the rebates were low (only 5% – the marketing team was convinced this was low given the spend size and knowledge of competition). Procurement and Marketing had never worked together in the past and Marketing viewed Procurement with distrust and lacking in the subject matter expertise needed to support this area. To build a common understanding, an outside consultant, Alan Rice facilitated several workshops to share knowledge between the two departments. Marketing learned how the Strategic Sourcing process worked, along with examples from other internal projects and the consultant’s experience with other external projects. Additionally, one-on-one discussions were held with the Chief Marketing Officer and his direct reports to establish a strong relationship and build a bridge as a trusted advisor. APPROACH After establishing a cross-functional team from Marketing, Finance and Procurement, business requirements were defined, and roles & responsibilities were communicated to the project team. The team assembled internal & external data and analyzed marketing spend over the previous 2 years, and the projected media budgets for the coming year. Agreed upon sourcing strategy included an RFI round, potentially 2 rounds of RFPs and potentially a final Reverse Auction round. RFI Round – RFI...
