Even with indications of a rebound in meetings activity, corporations have not slowed in implementing new or refined policies that offer executives or centralized travel or meetings departments more control over meeting approvals or expenditures.
Companies today are in a mode not only to set, but also to enforce, policy to control costs like never before.
Companies have looked at both internal and external refined policies covering several steps of the meetings management process, including those instituting more or higher levels of approval needed to stage a meeting, those requiring more consideration for preferred transient properties as meeting sites and those requiring a centralized point for site sourcing and contract negotiation.
Amgen Inc. of Thousand Oaks, Calif., this month will implement new procedures that require all internal meeting sponsors who are planning events that include 10 or more room nights to use the services of the company's hotel sourcing group, said assistant director of meeting planning and trade shows Betsy Bondurant. The procedures likely will become official policy by December, enabling noncompliance to be tracked, as post-event hotel bills will include an identifier that indicates the meeting contract was handled by the hotel sourcing department. Noncompliant bills will be forwarded to senior management.
"It's a soft start-up, but there will be ramifications," Bondurant said. "Even at the local hotel down the road, there can be no more situations where you just pick up the phone and get 20 rooms for Friday night," Bondurant said. "We need to protect Amgen from inappropriate contracts, and this will let us gather data and find out where and with whom we spend money. Consolidated sourcing works, and if there's support from the executive level, you can see significant savings." To ease the transition, Amgen has posted an online meeting request for proposal on its intranet, which, when completed, will be concurrently transmitted to the hotel sourcing department and the company's meeting technology supplier StarCite, which consolidates Amgen meeting data.
Centralized sourcing is but one method companies are employing to control meeting expenditure. "I've never seen so much activity," said Kaye Mulkeen, executive vice president of WorldTravel Meetings & Incentives. "Corporations are catching on to the strategic approach, understanding what they spend and wrapping their policy around that."
There are several ways to do that, Mulkeen said. "There are more requirements that all meetings must be registered at a single point so everyone can see what's going on and where they're taking place," she said. "There is more centralized sourcing of all hotels and standardization of hotel contracts, with companies trying to line up meeting sites with preferred transient properties."
It is rare, but not unprecedented, that a company immediately mandate a new, major meetings initiative. Most have a grace period, allowing meeting sponsors and attendees time to adjust their habits to new procedures, and allowing the company to assess the potential impact on savings, before noncompliance consequences are implemented. "We suggest that companies wait six months, then put the procedure into policy," Mulkeen said. "But it depends on the company and the industry. One large client issued a mandate from the CFO that all negotiations and sourcing are to be from a single point. Another client lowered a cap to $20,000 in meeting expenditure for automatic contract review. Most others are softer, offering a tool to do it and letting it be known that the company would like them to use it, then have the data to back a mandate."
Late last year, many policy changes were sped up or initiated after the double-barreled blow of a declining economy and Sept. 11, and many meeting policy changes were developed hand in hand with new transient travel policies. "We have required executive approval for all travel, even more so for meetings," said Tom Walker, manager of travel services for Grand Rapids, Mich.-based Steelcase Inc. "Sponsors have to provide a list of attendees, and that is the limit on who can go. We have severely downgraded participation in our industry's major event, which our internal sponsors should take as a vanguard."
Steelcase has decentralized departmental budgets, offering department heads a bit more flexibility in deciding whether to hold an event. "We'll support that, but it's their money," Walker said. "It's working for us. We have better control over travelers. We have kept the spirit of executive approval."
Though some data gives credence to the conventional wisdom that the worst times for the meetings market are in the near past and a scattershot rebound of activity has commenced (Meetings Today, April 22), volume pickups are unlikely to slow policy implementation.
"In the fourth quarter and first quarter of this year, there was a lot of conversation about restricting travel and putting business processes in place to create another layer of approval for meetings," said meeting management consultant John Williams, president of Marietta, Ga.-based Williams Management Strategies. "That was needed to address upper management concerns, and they are going to stay in place as long as companies have to ride out this economy. There might be situations where certain restrictions are lifted or eased, but approval policies will not go away."
"Our volume is starting to pick up, but it will have to pick up further before any policy change is considered," said Stephanie Valdez, corporate travel manager for Milpitas, Calif.-based Solectron Corp. "We have moved much of our meetings volume to teleconferencing and videoconferencing. Our management wanted to keep travel cost down, so any meeting now has to generate revenue, and there are several levels of management involved in the approval process. It's the strongest policy in five years."
The policy has served its purpose, Valdez said. Not only is meeting participation much smaller, she said, but this shows "that we can control a policy put in place by management and demonstrate our value."