Features - August 2008

By John Buchanan

“Strategic meetings management…is no longer just the latest industry buzz phrase,” began a new white paper issued by the National Business Travel Association (NBTA) Groups and Meetings Committee in June. “Today, nearly four years after this committee first introduced the concept and began defining the practice, more and more firms are joining the ranks of those enjoying the benefits of strategically managed meetings.”

In order to illustrate both the diversity and underlying complexity of strategic meetings management programs (SMMP), the NBTA report “Models of Success: Profiles in Strategic Meetings Management” provided detailed studies of three SMMP practitioners: PricewaterhouseCoopers, Xerox and Scotts Miracle-Gro. Despite some key differences, such as whether they outsource core meeting services, the three companies share a commitment to a fundamental SMMP model that is aimed at capturing all meetings-related costs and reporting them comprehensively and accurately to management.

Over the past few years, as SMMP has gained legitimacy as a discipline, it has become apparent that, until recently, very few large organizations have known what they actually spent on meetings or whether that money was well invested. Today, in the era of Sarbanes-Oxley (SOX) financial reporting requirements and tightened budgets, that reality is changing very quickly.

“We want to make sure we have a very strict audit trail for Sarbanes-Oxley, and we want all of that information available to management,” said Pamela Ferranti, manager, meeting management solutions, at Webster, NY-based Xerox, which launched its SMMP in 2004.

The intense and growing interest in SMMP today, however, is driven by much broader motivations than SOX compliance, noted Debi Scholar, CMM, CMP, CTE, meeting and events services director at PricewaterhouseCoopers in Florham Park, NJ, and co-chair of the NBTA groups and meetings committee since 2004. “Today, more and more companies are looking strategically at their spend and trying to reduce it,” she said. “But there is a long way to go for many companies to actually adopt the practices. Many companies do not yet recognize the risks involved if they do not have a strategic meetings management program in place, and also they may not realize the savings they could achieve. I’ve talked to companies that think because they have their travel costs captured, their meeting spend must be included. They are far from capturing their total meeting spend.”

Defining An SMMP Process
The new NBTA report has helped to define what an SMMP should include and how it actually works. For example, every program should include “cost controls, financial objectives and clear definitions of program savings and cost avoidance,” it says. SMMPs should also “consider categorizing meetings by purpose, size, audience demographic, geographic region or budget and writing policies to suit each.” Perhaps most important, the report observes that “executive sponsorship is critical at program launch and for ongoing success.”

Basic program components include a formal meetings policy that “sets consequences for non-compliance and sets enterprise-level meeting data requirements to ensure comprehensive consolidated reporting,” as well as a meeting management technology platform, such as industry-leading innovator StarCite. A meeting registration process that captures and evaluates basic data on every proposed meeting and includes a consistently executed approval process are good starting points in the creation of an SMMP that will succeed. New tools such as captive meeting cards, from vendors such as American Express, U.S. Bancorp and Citibank, and Web-based financial reconciliation capabilities are vital ingredients in a recipe for actually collecting and analyzing all meeting-related financial information. “Reporting and subsequent analysis should be designed to measure a program’s return on investment (ROI), track program savings and funding, monitor compliance and establish or validate spend/cost benchmarks,” the NBTA paper concluded.

At first glance, such a list of requirements can seem daunting, but there is also an important lesson to be learned from going through the process over a protracted period of time, as Scholar has discovered at PricewaterhouseCoopers. “I think the important thing to realize is that SMMP is not a project with an end date,” she said. “Rather, it is a continuous improvement initiative. We’ve been trying to get our arms around meeting spend since 1999, and it has been a constant evolution over the years. We have been through reorganizations. We have looked at different business models. But the constant goal has been to improve, to understand how we can save money and also improve customer service. But it is a process that takes years. It does not happen overnight.”

Same Goal, Different Approaches
Both PricewaterhouseCoopers and Xerox have mature SMMPs in place and share the common goal of reducing meeting costs and reporting 100 percent of all expenditures. But their approaches are quite different.

For example, Xerox has eliminated the traditional role of meeting planner within the company and outsourced global responsibility to just two meeting services providers, while PricewaterhouseCoopers has elected to keep the process in-house. Another early adopter of SMMP, Lockheed Martin, is among the companies that have opted for a middle-ground solution that combines specialized outsourcing with an internal meeting services capability.

The point, Scholar said, is that there is no “one size fits all” model.

There is, however, a common fear and anxiety among many planners that SMMP will, by definition, eventually lead to the obsolescence of their traditional “tactical” role of merely booking airline seats and hotel rooms and finding a keynote speaker.

Ferranti believes that the process of forced obsolescence is already underway. “I was just at a conference yesterday,” she said, “and a lot of companies still have dedicated meeting planners. But the people I talked to were very interested in the fact that we have outsourced everything.” As she observes the current meetings industry, Ferranti sees a transitional model that consists of internal planners combined with some outsourcing. “But in terms of companies having a full team of internal tactical planners, I think that is becoming obsolete,” she said.

Scholar disagrees with that assessment. “I do not think that the tactical planner will become obsolete,” she noted. “I think instead what we’re talking about is that planners will have plenty of opportunities to be strategic when they are planning and delivering their meetings.” PricewaterhouseCoopers, she noted, has made a carefully considered and conscious decision to resource by using internal and outsourced planners as necessary.

This new dimension that the company has nurtured over the past few years is a discipline now formally being called “strategic meeting planning and delivery” by the NBTA committee.

Peter Moen, vice president, global business development, at Plymouth, MN-based Carlson Marketing, sees the situation from a different perspective. Moen, accustomed to dealing with management executives at client companies, witnesses the resistance to the concept of SMMP from many rank-and-file meeting planners who until now have considered third-party service providers such as Carlson “the enemy,” he said. But that paradigm is rapidly changing now, he added. In fact, a sea change is underway.

“More and more marketing organizations are getting behind the concept of SMMP,” he said. “In the early days, the procurement departments that cut their teeth on managing transient corporate travel expenses were trying to move the idea into the meeting and event space, but it wasn’t all that successful, mainly because the stakeholders who had meeting spend in their own budgets were not really part of that. It was procurement people who were trying to move it across the organization, with varying levels of buy-in, which determined the success or failure of whether the actual budget-holders bought into this. But over the last couple of years, we have seen marketing and sales organizations get behind this movement, and that is where we are now seeing the greatest success.”

A key step in the SMMP juggernaut, Moen explained, has been a transition from the one-dimensional objective of cost-cutting to the broader goal of adding a truly strategic component to the planning and execution of all meetings and events within a company. As a result, he said, resistance to SMMP from meeting planners and some stakeholders has clearly diminished. “Up until this point, the perception has been that they would lose control and get procurement driving the bus rather than themselves, but none of that has happened,” he said. “They’ve gotten the benefit that they’re looking for, but none of the fears they had have become real.” But Moen does acknowledge that “there is still a lot of resistance in the organizations that do not have that buy-in from sales and marketing organizations and other major meeting stakeholders.”

Capturing Total Meeting Spend

With implementation of the SMMP model, savings in the range of 20 to 30 percent can be accomplished without sacrificing any important meetings.

Money Talks
Despite any lingering controversy about the underlying intent or practical consequences for planners of SMMP initiatives, one thing is for sure — the discipline has led to dramatic cost savings and improvements in the overall efficiencies of the meeting delivery process.

At Bethesda, MD-based Lockheed Martin, for example, Richard Wooten, director of corporate travel services, has been able to reduce the company’s meeting expenditures by 27 percent, without sacrificing any important events. Based on her longstanding observation of the meetings industry and the implementation of the SMMP model, Scholar believes that savings comparable to Lockheed Martin’s –- in the range of 20 to 30 percent — can be accomplished without sacrificing any important meetings.

Lockheed Martin currently employs 570 “meeting arrangers,” which is Wooten’s term for their combined roster of professional meeting planners and others, such as administrative assistants, who plan smaller meetings. In total, Lockheed Martin will host about 1,200 meetings this year.

Among the key changes the company has made in order to accomplish its cost savings has been a decision to outsource site selection to HelmsBriscoe. “One of the things that really interested us and a main reason we brought HelmsBriscoe on board was to get competition between hotels going,” Wooten said. “In a lot of cases, with our meeting arrangers before, we weren’t seeing that.” Now, Wooten said, every meeting request that HelmsBriscoe processes includes at least three potential hotels in every destination. In addition, in order to leverage buying power and logistical efficiencies, Lockheed Martin has shortened its list of approved U.S. meeting destinations to 15 cities where the company has a hub of business activity.

Over the past year, Wooten has also implemented a captive meeting card program with U.S. Bancorp and entered into a comprehensive agreement with StarCite that will integrate its suite of sourcing and reporting tools into Lockheed’s existing Travelocity Business procurement system. In turn, the new StarCite/Travelocity platform, initially being deployed for smaller meetings, will eventually replace the company’s legacy proprietary system for managing large meetings, which will result in even greater cost savings because of reduced operating overhead, Wooten said.

But perhaps most important, he added, Lockheed Martin has recently begun to ask a simple question that is being posed by more and more companies — is this meeting really necessary?

“That dialogue has started to happen,” Wooten said. He is now working with Travelocity Business to develop a dynamic messaging system that will intervene at the point of purchase and define criteria for whether a meeting should be face-to-face, held in a virtual environment or not be conducted at all. After all, Wooten said, the least expensive alternative is the meeting that does not take place. Such a new sensibility in the meetings arena is a byproduct of the “demand management” discipline that has been applied to transient travel for years.

In fact, the concept of demand management, or the elimination of unnecessary face-to-face meetings, has been a top priority at both Xerox and PricewaterhouseCoopers.
When it comes to actually justifying whether a face-to-face meeting is warranted, “Xerox has been on that page for a couple of years now,” Ferranti said. As one way of eliminating any incentive to hype a particular meeting at an offsite venue, the company negotiated a fee-for-services contract with its two outsourced service providers, in lieu of traditional hotel commissions.

In addition, Ferranti works closely with an in-house videoconferencing department, which in turn outsources the actual technology, to determine instances where a videoconference can be substituted for a face-to-face meeting. As an example, she cited a recent global technical conference, hosted from Grenoble, France and Palo Alto, CA, that included small groups of participants from around the world.

PricewaterhouseCoopers has also enthusiastically embraced virtual meeting technologies as a key cost-cutting tool. “One of the three most important lessons I have learned as part of our SMMP is that many meetings can be held in a virtual environment,” Scholar said. “I am constantly working with planners and colleagues to understand and embrace virtual meeting technologies.”

The company’s virtual meetings team has reported to Scholar since 2002, making PricewaterhouseCoopers one of the first U.S. companies to have face-to-face and virtual meetings overseen by the same centralized meetings management organization. “So we constantly see an increasing number of virtual meetings that are occurring,” Scholar said, noting that between fiscal years 2006 and 2008, “we had over a 100 percent increase in virtual meetings. Just since last year, we have seen about a 27 percent increase.” However, she added, virtual meetings will never entirely replace face-to-face meetings.

Lessons Learned
Now that SMMP has become more mainstream and more companies are undertaking initiatives every day, several important lessons can be learned.

For example, Ferranti said she has come to understand how meetings were once defined in terms of cost, and how they must be measured in the era of SMMP. “If you think about meetings, some people say a meeting is just the air, ground, hotel, and food and beverage costs,” she said. “But it’s also registration, speaker fees, the promotional materials, the print collateral. So you can’t just look at meetings as air, hotel, ground, and food and beverage costs. You have to be able to capture all the data, in different currencies and across the entire organization.”

In the case of Xerox, the StarCite suite of products has helped the company do that very effectively — from initial sourcing through final expense consolidation and reporting, said Ferranti. The company’s goal is to eventually be able to track every penny of meeting costs, and then report it as a cost-per-attendee expense.

At PricewaterhouseCoopers, Schol­ar said she is close to being able to track and report 100 percent of the company’s meeting spend — a task considered nearly impossible not long ago. And she, too, has learned some key lessons from the SMMP process. “One big lesson is that SMMP always takes longer than what you thought and it is ever-changing,” she said. “So it never remains constant for long. It is constantly being updated.”    C&IT

SMMP Best Practices

At PricewaterhouseCoopers and as co-chair of the National Business Travel Association’s (NBTA) Groups and Meetings Committee, Debi Scholar has been at the forefront of the SMMP initiative. In 2004, the NBTA Groups and Meetings Committee was the first to define the nine essential components that make up a successful Strategic Meetings Management Program. 1. Enterprise-wide Strategy. The overarching issue in the implementation of SMMP, the core principle that must encompass the entire program, is an enterprise-wide strategy, not just a strategy for an individual business unit or meetings team. 2. Policy. A successful SMMP must include an official policy and/or formal guidelines. “Some companies may not be able to set policies or mandates,” Scholar said. “Others only have a guideline in place. But there has to be some kind of policy or guideline that describes or defines what a meeting is, or what is allowed and not allowed.” 3. Registration. Every meeting or event must be registered within a centralized meetings management system so that it can be tracked through its entire life cycle, from proposal to final cost reconciliation and reporting. 4. Approval. There must be a formal meeting approval process for C-level executives and managers. 5. Sourcing/Procurement. There must be a form of standardized sourcing or procurement, so that there is commonality to the process, such as negotiation and contract procedures. Scholar said, “Mitigating risks throughout the process, especially in the areas of contract language and document retention, become essential to an organization. A lack of controls may lead to negative audit results, the compromise of intellectual property and uninsured attendees at meetings and events.” 6. Planning/Execution. There must be a core strategy that defines the delivery of meeting services. “Some companies outsource, some companies in-source,” Scholar said. “Some do a combination of both. Some even have what they call ad hoc planners. But if they are planning, there should be consistency around how they are planning and the tools that they use.” 7. Payment/Expense Reconciliation. “However an organization decides to pay for meetings and expense those meetings, that should be done consistently throughout the organization,” Scholar explained. “It should be done on a meeting card or within a system where reward incentives or points are not accrued, for example.” 8. Data Analysis/Reporting. “Companies have to be able to extract the data so that they have the complete meeting spend data,” Scholar said. “Most companies would be shocked at how much they spend and could save.” 9. Technology. There must be a technology that links all the other best practices together into a seamless system of SMMP operation. PricewaterhouseCoopers has accomplished all nine best practices, Scholar said. But it has not been easy, and the price of long-term success is eternal vigilance. — JB