Global businesses with
thousands of employees that each year host hundreds of events can have a
difficult time keeping track of meetings spend across departments. With a
fragmented meetings program, companies are at risk of losing money and
mismanaging company time. Centralizing the meetings management process, from
sourcing to settling the final bill, can help organizations gain a handle on
meetings spend, save money and mitigate risk, according to several meetings
management executives and buyers.
McAfee Inc. senior
director of global travel, meetings, corporate card and mobility Susan Dupart
took such a "holistic approach" last year when she centralized the
company's meetings program, beginning with executive buy-in and continuing to
hands-on employee training.
After joining the
security technology company in 2011, Dupart observed that although a
comprehensive transient travel management program was in place, McAfee had
nothing in the way of strategic meetings management.
"In looking at my
strategic meetings management program, I really laid out what my challenges
were, what my goals were and how I was going to move forward," Dupart told
Travel Procurement. McAfee's biggest
challenge was tracking meetings spend.
"We had no idea
what we were spending on meetings," Dupart said. "From an air
perspective, we couldn't track it."
In order to begin
rolling out an SMM program, Dupart first had to get executive buy-in, a crucial
initial step to any effective meetings management program, she explained last
month during a webinar held by meetings technology company Cvent.
Without an organization's
full support and participation, Dupart said, a centralized meetings program won't
be as successful. She used a strategic meetings management program model
developed by the Global Business Travel Association to show McAfee's executive
board the benefits and key elements of a centralized SMM initiative, including
policy development, executive approval and stakeholder management.
"If you don't have
every piece of that puzzle, you're going to have a missing piece of your
program," said Dupart. McAfee executives were not difficult to persuade. "We
talked about not really knowing where our meeting spend was," she said. "We
had situations where meetings were canceled, and [because] the wrong person
negotiated that contract, there were cancellation fees." To avoid future
financial loss, executives agreed it was a plan worth adopting.
Once upper management
was on board, Dupart needed to explain the positives of the new program to meeting
owners. "They see meeting planning as a fun part of their job," she
said, "and some felt we were taking that away." However, once
training began, Dupart and her team stressed to each department that they were
not taking the entire meeting away, just the sourcing piece, to make it easier
for them to concentrate on the event's content.
"We were very
systematic about the way we did our program, and had very, very positive
results," Dupart said.
Sourcing To Savings
In 2012, Dupart began
building a meetings program by taking over the sourcing element of McAfee's
events, working with consultants who provide "consistent and high-level
expertise," she said. To mitigate financial risk, Dupart outsources
meeting contractual negotiations to American Express. "I wanted to
consolidate billing, so there is visibility of spend," she said, "and
utilize strategic consultation for destinations and use that as leverage for
future negotiations." She added that she wanted to create a program with a
simple pricing model that would be "friendly to the end user."
Meeting owners in each
McAfee department complete an online registration form, including the specifics
of their event, and then American Express handles everything from sourcing to "final
negotiation for contracts, and then they follow through with final billing, and
anything negotiated is credited to the final contract and they send that off
for our final review," Dupart said. "It's worked successfully. I
wanted to ensure visibility, utilizing preferred vendors, because I think every
company initially struggles with people that don't really have that core
competency who are doing contract negotiations."
At first, McAfee had no
general ledger code specific to meetings, so Dupart created one. Now all
meetings are booked with that explicit GL code. "From a finance
perspective, we can look at what our meetings spend is," Dupart said. She
also implemented a corporate calendar, informing management when events
throughout the company are being held. "The importance of having it
centralized is that if we have a cancellation, within a certain amount of time
we can use that deposit for another program," Dupart said. "If we
have funds and then want to do a meeting in that same area, we have visibility
of funds sitting there."
Instead of each
department relying on outside meeting planners or managing events on their own
(usually accruing add-on spend in the process), McAfee under its new program
lays out the entire event cost to meeting owners up front. McAfee divides its
meetings into six different service levels, assigning a specific number of
transient and meeting rooms to each level. "Each level is very clearly
defined and there's a very clear set price for sourcing each [level of] event,"
Dupart said. Level one is the simplest, smallest kind of event, classified as a
meeting with at least 10 hotel rooms and two meeting rooms. Meetings that would
cost more than $25,000 need the approval of McAfee's chief financial officer,
and the chief executive officer must OK any meeting that costs more than
$50,000.
Once a meeting is
complete, McAfee can compare the first round of negotiations to the final bill
in order to demonstrate negotiated cost savings to meeting owners, providing
them with numbers they can take back to their department heads. "The core
negotiations are based on meeting room spend as well as transient hotel spend,"
Dupart said. "We also negotiate food and beverage."
Around 200 McAfee
meetings within the United States each year are handled within McAfee's SMM
program, and all meetings follow specific terms and conditions set in place by
Dupart's team. "We developed a standing addendum that has 25 components,
10 that can't really be changed without going through further review with legal
and finance," Dupart said. All meetings go through this review, regardless
of level. "My main concerns were cost and preferred users," Dupart
added. Specific terms and conditions that cannot be changed vary depending on
event's level and location.
Six months after
launching the program, McAfee by August 2013 had documented $50,000 in savings.
By December, the company had attained twice that.
In addition to tracking
cost, McAfee this year also plans to begin assessing events on a more granular
level in terms of reporting meeting outcomes and return on investment.
The company plans to
introduce in the fourth quarter of 2014 a corporate card specific to meetings
and add a "meetings feed" to its employee spend-tracking dashboard
system, accessible to upper management, that already tracks employees'
transient spend within the organization.
Also in 2014, McAfee
intends to go global with its meetings management program. "I think that
we actually have very good support from the global [employees] to do so,"
Dupart said.
McAfee plans to begin the
globalization process later this year. Once in place, the international
management program will help McAfee track spend across all of the company's
meetings held around the world, while logistics will be "handled by local
key people within the organization," Dupart said.
This report originally appeared in the May 2014
edition of Travel Procurement.