Prior to establishing Axiom, our Co-Founders spent over two decades in the Marketing Materials Outsourcing sector – shaping, leading and managing not only some first, but also the largest regional & global deals.

Two years ago, Axiom was founded – primarily to address some key challenge that the industry was struggling to get to grips with. Particularly around the wider use of data to drive procurement decisions and the measurement of ESG – two areas in particular where it could be argued that the industry has been ‘asleep at the wheel’ for too long.

In this series of articles, we’ll examine this outsourced marketing materials procurement model more broadly and ask, “is it still fit for purpose today, or it is time for a new approach?”

For a sector that controls over $1Tr of client spend, we’ll argue that the model, that was established in the 90’s, has changed very little in the last three decades and is increasingly becoming “off the pace” as we enter the 4th Industrial revolution (4IR).

But is the model completely broken?

It’s easy to suggest not, particularly when you consider that it’s an industry that’s created some very successful $bn service providers, and also when there seems to be no end in sight to the number of client organisations turning to this outsourcing approach, as they try to drive change in their own procurement organisations.

But do these clients deserve better than what’s currently on offer?

We believe very firmly “Yes”! And throughout this series we’ll explain Why and How these world-leading global organisations should be, and could be, better served.

Challenges

Our perspectives are borne out of deep sector experience, augmented by the startlingly clear insights derived from Axiom’s research, data modelling and analysis since 2020.

This work is highlighting what many people in the industry suspected – the model is outdated and is no longer fit-for-purpose, particularly given the ever-increasing commercial and ESG transparency demands being placed on buying organisations.

Our work has shown that the standard industry contractual, commercial and operating models are one-dimensional, in most instances ‘broken’ and often misaligned with the current and future needs of large buying organisations. The technology deployed by the primary service providers is too simplistic and simply reinforces a traditionally flawed approach to buying.

Over the course of the next few instalments, we’ll add some colour and substance to each of the following areas, as well as some key challenges the sector faces:

  • High levels of budget waste, resulting from the dominant blind ‘spot-buy’ and ‘three-bid’ buying methodologies which are fundamentally flawed
  • Industry standard commercial terms that are designed to drive the wrong behaviours both in the client and service provider organisations
  • Poor quality and/or incomplete data capture that means transparency and objective decision-making and contract management is impossible
  • Data poverty that naturally leads to low levels of automation and high levels of human intervention in repetitive activities, resulting in a high ‘cost to serve’, compromised ‘speed to market’ and increased supply chain risks
  • Heavy reliance on simplistic savings methodologies that do not deliver P&L savings
  • No ability to deliver instant predictive pricing or automated procurement scenarios
  • No ability to accurately measure and manage ESG factors pre-emptively
  • No ability to manage demand pre-emptively, resulting in unnecessary cost and environmental impact
  • No means of objectively measuring the ROI and the effectiveness of the investment in marketing materials

Don’t get us wrong, there are some very good global and regional services providers, but procurement’s historical primary focus on cost reduction and the industry’s infatuation with driving scale and geographic coverage has almost certainly been an inhibitor to real progress and investment in marketing materials procurement innovation. Faced with the need for volume to sustain business models, commodity level service pricing expectations from large buying organisations and competitive tensions that have reduced contracted margins to single digits, most of these service providers have looked up- and down-stream to drive improved margins.

The future

The wider world of Procurement is changing at a faster pace than ever before. A wave of Digital Procurement is washing across the industry, driving a new era of Transformational Sourcing. Recent advancements in Automated Insights and Spend Analytics is now yesterday’s news, being rapidly overtaken by 4IR technologies using the power of Big Data, Blockchain and AI to drive Predictive Procurement.

In the often one-dimensional Marketing Materials world, this talk probably seems like a foreign language, as the industry continues to plow on in the same old furrow.

But this is not some distant future, Industry 4.0 is already here and driving change across numerous sectors and disciplines, where the use of data and AI is delivering significant advances in efficiency, effectiveness and delivering ESG commitments.

The marketing materials sector is unfortunately lagging far behind and needs a wake-up call. It needs to change…..and quickly. BUT is it up for the challenge? Can it lead or will it wait to be forced into a new way of working by its increasingly digitally-savvy clients?

As Albert Einstein famously said, “Insanity is doing the same thing over and over and expecting different results.”

Coming next……

In the next instalment, we’ll look at the current state of the industry in more detail and consider what the outsourcing proposition promises to deliver. In part 3, we’ll get under the skin of the issues that face the industry, from outdated commercial and savings models, to the inadequate technology offerings that are being deployed across global organisations and the enormous gap in accurate ESG measurement and management.

In the final part, we’ll describe what Marketing Materials Procurement 2.0 should look like in today’s data-empowered world, and how it can start to add some real, measurable value both to Procurement and Marketing.

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AXIOM

Axiom is a next-generation Procurement-Intelligence© platform, using AI to enable Procurement to make more effective, more sustainable, more efficient and more inclusive decisions, every time, in real time.

Axiom launched in 2020 in the world of marketing materials. We’ve come a long way since then!! Today, we’re a dynamic ProcureTech start-up, working with clients across a variety of procurement categories, assisting them to drive Transformational Sourcing strategies, as part of their wider digital ecosystem.

Completely independent, we work with clients directly, with management consultants, technology providers and with intermediaries to drive meaningful, AI-powered change.

Why not drop us a line at info@axiomdata.io to see how Procurement-Intelligence© could help to deliver your digital procurement journey in 2022 and beyond.