ING Americas Takes Procurement Approach To Mtgs.

Punctuated late last year by the creation of a centralized hotel sourcing process, ING Americas has saved more than $3 million by developing a procurement-based meetings management program. The new strategy includes strict policy mandates, centralized and outsourced meetings air management, a standard hotel contract and a formal bidding process for incentive travel.

The Atlanta-based American division of the Dutch financial services giant ING, ING Americas now operates a fully consolidated meetings program, representing about $40 million in annual expenditures, despite being completely decentralized as recently as 2002.

With a free hand from the company's senior management to mandate any and all meetings-related processes, Minneapolis-based travel, meetings and sourcing specialist Kari Knoll Kesler has centralized control of contracts and expenditures, while maintaining the role of the company's meeting planners in reaching business objectives.

The development of the meetings program began in January 2002, Kesler said, as part of an overall effort to better strategically source all travel-related functions. The company, though, was unaware of the true scope of its meeting activities.

"The company thought they had only $10 million in meetings spend," Kesler said. "Luckily, they did not tell us that we had to approach this in any particular way and that we could mandate anything we wanted. We wanted something with strong teeth, but we had to do it cautiously."

After identifying 27 meeting planners at ING Americas locations throughout the country, each reporting to different business units, Kesler created a required process by which those planners report all meeting data to a central point. "There was no way to oversee it separately," she said. "We needed to have them come to this willingly, because they would be stakeholders in the process. I promised that we could exceed all objectives and that they would be part of the process, even with the mandate."

With the initial move to centralization in place, Kesler next revamped the company's meetings air management. Previously, meeting attendees did not book air under a single, cohesive policy.

Kesler consolidated all meetings air transactions, except those managed by third-party incentive houses, and presented them to travel management companies for bids. The bid represented between $3.5 million and $4 million in transaction volume, she said. Omega World Travel won the contract and consolidated negotiating and management resulted in a savings of 50 percent for each air transaction, she said, for a total of $1.2 million in annual savings.

In late 2002, Kesler's department moved to develop procurement and operational strategies for different types of meetings, she said. "That enabled us to target small and midsize meetings so we could find synergies between transient and meetings travel. Small meetings act most like business travel, as a line item."

ING Americas, accordingly, launched a policy mandating that any meeting of at least 10 attendees, or any meeting that requires air or hotel expenditure, must be registered through Kesler's department.

Following that, Kesler instituted a policy that required that at least three requests for proposals be issued for any large meeting or group incentive that required outsourced management services. "This was all new for them, and it's not that we wanted to go bid crazy, it's just that those meetings had never been sourced," she said. By the end of 2003, she added, that process completely was implemented throughout the company, generating a savings of $1 million.

"The point of all of this was to get better data and then go out to bid," Kesler said. "We had to get all of our contracts to go through sourcing, which is one of the best things we did. We thought we might get 400 contracts, which freaked us out, but it turned out that we ended up with closer to 1,000."

With all ING Americas meetings data and contracts in hand, Kesler and her team last year developed a standard hotel contract to present to would-be sites. "It's a 12-page contract, and there are lots of terms, and we give it to them before anything happens," she said. "By and large, the contracts come back looking like what we gave them."

ING Americas has developed a short-form standard contract for meetings with budgets of less than $10,000—about half of its meetings—and also has developed master service agreements with some properties that cover an unlimited amount of small meetings.

"We negotiate the contract only once, then all we execute is a two-page order that references the master service agreement," Kesler said. "Some will include certain rates. Some do not. Some hotels lock in a rate for one to three years, some didn't want to do anything with it."

Additionally, ING Americas last year standardized meetings payment through a single purchasing card, Kesler said. Expenditure data automatically is requisitioned into the firm's expense management software. Already, she said, the firm has reached compliance rates of about 95 percent.