Corps. Slow To Centralize, Consolidate

<B>Corps. Slow To Centralize, Consolidate</B>

By Chris Davis

Less than half of domestic corporations have fully centralized their meetings programs or consolidated meetings expenditures for the purpose of negotiating with suppliers, according to a recent Meetings Monitor survey. Yet, while both initiatives can lead to cost savings, it seems unlikely that current economic fluctuations will cause a mass adoption of either tactic.

According to the Monitor poll of 132 corporate meeting buyers, about 34 percent said their corporations had a centralized meetings department, with an additional 19 percent indicating that their companies partially had centralized. About 46 percent of all respondents said their companies consolidate meeting expenditures.

Of those who do not consolidate, about 14 percent said they will begin to do so this year. The majority of these responses were received before the current spate of cutbacks in meeting expenditures, so that figure may not represent the most immediate feelings regarding the benefits of consolidation.

But the stranglehold that declining corporate earnings and stock prices have put on some major meeting programs seems to illustrate that though some buyers have a renewed interest in consolidation as a cost-savings strategy, others will be less likely to pursue it because of short-term funding shortages.

"We have marginally new activity," said Janice Blevins, vice president of meeting management services for TQ3 Maritz Travel Solutions of St. Louis. "Interest in centralization and consolidation will pick up next quarter, because many corporations stopped everything in the first quarter and, now, in the second, are reassessing where they want to be."

Blevins has seen an uptick in corporations expressing an interest in consolidation for the first time, as well as in those that previously considered the possibility and now are ready for action. "There's been a lot of requests for education," she said. "But, right now, many corporations are doing their own thing with these initiatives. Decisions on what to outsource will be addressed more next quarter."

Kinko's Inc. of Ventura, Calif., swings about 90 percent of its meetings through its meeting department, but does not capture the accompanying data for use in negotiations, said meetings and events manager Leslie Veenhuis. The company relies on its suppliers to provide consolidated account information, a setup Veenhuis admitted is not ideal but will not change in the near future: "We just don't have the resources to dedicate the manpower to consolidation."

Veenhuis, though, has not had to institute a mandate or other maneuvers to centralize the vast majority of events that include multiple-night stays or more than 50 total room nights. "Most of the time, employees want the help because they're too busy," Veenhuis said. "It's not an issue we've had to enforce. The remaining 10 percent are meetings that are so small we're not too worried about them."

The list of corporations that have considered meetings consolidation initiatives without actually doing so is lengthy (Meetings Today, Dec. 4, 2000). Christine Duffy, president and COO of Philadelphia-based meetings consolidation firm McGettigan Partners, acknowledged this and said products soon will be available that allow corporations to consolidate a portion of meetings expenditures to simplify and shorten the process.

"The current economy enhances the move toward centralization," Duffy said. "Less so for the pharmaceutical industry, because they started doing this seven years ago. However, the technology vertical was less of a mature industry without the same pressures, and they were less interested in these processes, but the need has been raised." Duffy added that corporations today are more concerned with managing meetings throughout the company, and developing processes to handle such is "an item on the agenda, which was not the case 12 or 24 months ago."

Some companies that have centralized operations have used the structure to cut costs through a higher degree of meeting management--ensuring that nonprofessional meeting planners, for example, do not sign contracts with unfavorable terms, or book properties or airfares outside of their preferred suppliers.

Golden, Colo.-based Coors Brewing Co. partially has centralized its meetings operations, directing about 60 percent of events though its meetings department, led by meeting manager Linda Patterson. The company still has several administrative assistants handling planning, though the events involved usually are small and straightforward. Coors has little desire or immediate ability to direct more meetings through Patterson's small department. "There has been some reluctance," Patterson said. "And there is no mandate that we must plan each meeting."

One change Coors is considering is to require Patterson's review of all contracts, and not just immediately before signing, because the company, like many others, fears the consequences of a serious cancellation fee in a contract negotiated by someone other than a meeting professional. Since Coors retains onsite travel agents and contracted outside meeting planners, receiving Patterson's stamp could limit liability to the agency or independent planner. "We stress that they can still plan their own meetings, but we want to make sure all cancellation and other fees are in order before it's too late," Patterson said.