Compaq Computer Corp.: Co. Saves W/ Standardization, Auction

In an effort to reduce meetings expenditures without resorting to mandates, Compaq Computer Corp. during the past 12 months has slashed about 25 percent of the cost of at least 100 meetings by creating a standard small-meeting contract to minimize cancellation exposure and conducting meeting space auctions through an outside technology vendor.

Similar to many technology-related corporations, Houston-based Compaq has a lightly managed meetings program. The mandate-free company offers cost-saving options created and promoted by the meetings department, which planners and administrative assistants are under no obligation to use. Still, the meetings department has taken steps to reduce risk and expenditures without exerting control over event logistics.

The first key measure, enacted last year, was the creation of a standard hotel contract agreement, specifically designed for meetings with less than 200 room nights, said Deborah Matarazzo, Compaq's Cupertino, Calif.-based global hotel program and meeting services manager. The standard contract was developed in conjunction with some of the company's preferred hotel chains and was posted on the meetings page of the intranet travel site.

"It's a standard agreement that offers us cancellation protection," Matarazzo said. "It all started when there was one too many contracts that cost the company money to get out of." The contract was designed with smaller meetings in mind, Matarazzo said, because those are the events that tend to be planned by inexperienced planners or administrative assistants. Compaq also stages several large marketing or user conferences, but those tend to be highly managed by professional planners and do not fall under the purview of either the standard contract or meeting services department.

The contract is just the latest feature of Compaq's advanced intranet travel page, which also includes an automated expense reporting tool and direct links to hotel vendors. Increasing Internet functionalities is a key mission statement for Compaq, Matarazzo said, and the meeting services department has aided that effort: Compaq went to the Internet for another key piece of its meeting services program, when it signed a deal last year with Sausalito, Calif.-based meetings portal EventSource—now ProcurePoint.

Compaq planners were introduced to ProcurePoint's OpenBid process, an online auction in which hotels, vetted by ProcurePoint for their appropriateness for the particular events, bid in a secure, but not secret, environment for a given meeting in a set amount of time. Hoteliers know which other properties are involved in the auction, and the details of current bids, but they don't know which bid belongs to which property. The process is designed to drive prices down as hotels compete on room rate, meeting space charges, food and beverage charges and complimentary space.

Matarazzo ran two trial meetings under OpenBid auspices and was able to predict savings of between 25 percent and 32 percent over what an administrative assistant would have been able to achieve. "We looked at two other solutions," Matarazzo said, "but I was very comfortable with EventSource, in part, because much of its management is made up of former hotel people."

Matarazzo's department, which is part of Compaq's finance department, approached senior management for support of the EventSource contract and achieved it by detailing the potential savings for them. Much like the standard contract, Compaq does not require anyone to use ProcurePoint, but Matarazzo has been able to promote the tool effectively through company newsletters. "Communication is key," she said. "It will take a while before it kicks in, but we document the cost savings every time and show them that data."

As a result, more than 100 administrative assistants and meeting planners have registered with ProcurePoint and are using the tool, and the projected savings figures have held steady, Matarazzo said. Compaq may be ProcurePoint's highest-profile client yet, and often is cited by the online company as an example of its tools' potential.

Meanwhile, Matarazzo would like to see the standard contract and new technology tools serve as a first step to a more highly managed program, but that's unlikely in the short term, since the company has other priorities at the moment: Compaq is set to merge with Palo Alto, Calif.-based Hewlett-Packard after a contentious battle within the latter company to approve the merger. At press time, the merger's timetable was unclear, so its effect on Compaq's meeting services program are unknown.