Defense contractor and conglomerate Raytheon Co. is set to launch in 2006 a discovery mission into its decentralized and largely untracked corporate meetings and events spending. The Waltham, Mass.-based company has hired a corporate meetings management veteran who plans to turn his own department into a model of meetings efficiency to set an example for other divisions.
The potential for savings at Raytheon, ranked the 20th-largest travel spender in BTN's 2005 Corporate Travel 100 with a U.S. booked air volume of $128 million and a U.S. travel and entertainment spend of $310 million, is significant. The average savings promised by many meetings management companies for a consolidation is a 10 percent to 15 percent reduction in costs.
"If we work together and consolidate somehow, we could create some savings, even if it was 10 percent," said John Touchette, senior manager of meetings and special events for Raytheon. "I wouldn't be surprised if it were very large numbers."
Though he said cost savings are a long-term goal, the company could take advantage of some efficiencies immediately. Negotiations could combine multiple Raytheon events placed at the same hotel. "On the transient side, they definitely try to leverage the hotels we use, and if can tie in those same hotels to the meetings side, it's even better," Touchette said.
Raytheon recently was able to lock in a low rate for a meeting at a Dallas property because of the transient volume already committed there. Other early efficiencies and savings could be generated by sharing hotel chain sales contacts across Raytheon businesses, he said.
Touchette also has begun to develop standard request-for-proposal templates that could be used by multiple Raytheon departments. Meetings currently are managed separately within business units, Touchette said, and planning responsibilities fall to communications directors, administrative assistants and official meeting planners. The RFP templates include concession requests of which other departments may not have thought, he said.
Touchette said he has spent the first 10 weeks of his job attending major summits and training programs and surveying corporate meetings management within the company.
Before Raytheon can begin to significantly leverage volume, meetings data has to be compiled into one central source. One way to raise awareness is to ask divisions to register their meetings on an online tool, he said.
"I'd like to create a master calendar of Raytheon events companywide," he said, "where all the event planners can go online and post their events."
Electronic tools to track meetings spend and share information also may be adopted in 2006, Touchette said, though the company has not determined if it should develop its existing system or hire an external meetings management company. An internal meeting-planning tool can capture some data, Touchette said. Planners of an estimated 10 large events currently are using the tool, he said. The internal system may be enhanced before the company looks to outside providers.
"We have a system through our extranet that any event planner in the company can access and set up registration for their meetings. From a formatting perspective, different divisions can use the same system," Touchette said. "Many of the meetings are so large that attendees are calling the hotels directly through a central reservations system to book their rooms and they pay direct."
Payment for many large events is funneled through individual employee expense reports.
Raytheon's procurement department has begun to look at ways it can track meetings-related spend by compiling corporate card data, Touchette said.
"Procurement is looking at what the total meetings spend is in a rooms perspective, a food and beverage perspective and in air and trying to leverage our business better," he said.
Touchette said his main responsibilities are for meetings through Raytheon's corporate office and chairman's office. He plans to bring his counterparts in other divisions together in January to discuss benchmarking and to share strategies.
"I'm trying to get everyone together and create focus groups so we can share best practices," he said, "and ultimately leverage our business better."
Under the current business model, it would be too complicated to roll out an entirely new meetings process at every Raytheon business division, Touchette said. Instead, he said he aims to communicate long-term goals and show how meetings management can save costs within his own department.
"I wouldn't say we're trying to take over anything. It's just a matter of influence and best practices," he said.
New initiatives, especially those started by procurement, present a challenge when trying to communicate business goals to employees, he said.
"I've partnered with procurement before and I realize they can be a great ally because they understand negotiations and travel. They have access to a lot of the reports. I'm trying to share some experience and prove our leveraging and networking opportunities," he said.
Touchette previously worked in meetings management at Boston-based John Hancock Financial Services for 17 years and in 2004 and 2005 served as president of the Association of Insurance and Financial Services Conference Planners, now called Financial and Insurance Conference Planners
(Meetings Today, Nov. 8, 2004).From those experiences, Touchette said he has learned that procurement has become inextricably involved in meetings management, and that meetings managers should use their skills in building relationships.
"To me, the whole business is about relationships," he said. "You build relationships with your hospitality partners but you also build relationships with your business partners and with procurement internally. The more you work together, the easier it is."