Following the successful implementation of a managed transient air and hotel program that reduced costs significantly, midmarket technology firm Macromedia Inc. is centralizing its meetings operations to generate similar savings.
San Francisco-based Macromedia, best known for its suite of Macromedia Flash Internet applications, assigned meeting planning responsibility to one of its two onsite agents in April after benchmarking the meetings management philosophies of other companies its size, said travel manager Yasuo Sonoda.
Macromedia's meetings program is small, but it comprises a substantial piece of travel expenditures. The company spends about $3 million annually on U.S. booked air volume. Though it only holds about 15 offsite meetings per year, Sonoda estimated Macromedia spends about $1 million on U.S. meetings. Much of that expenditure is tied to the company's major annual developer and user conference, a large affair managed by Twinsburg, Ohio-based mega meetings management firm Conferon (see story).
Sonoda, who joined Macromedia one year ago, decided to envelop decentralized meeting planning operations into the travel department with the belief the company could realize the type of savings it already had achieved by heavily managing transient operations. Macromedia in the past year successfully has instituted air, car and hotel programs, reducing the average cost per air ticket by $200. Similar management of meetings could yield savings, Sonoda said, which is how he made the successful case to the company's CFO.
"It's the strangest thing. Human resources, the users group, all of them plan meetings," Sonoda said. "They shouldn't."
The company's travel policy states that all meetings should be delivered to the travel department. However, "Our corporate culture does not support mandates or enforcement," Sonoda said, adding that non-reimbursement is not an option. "I'll go around to people and be soft and friendly, but every invoice that includes the word 'travel' ends up on my desk."
As many a meeting manager with designs on centralization has discovered, removing planning responsibility from nonprofessional planners can be a tall order. Smaller companies, however, arguably have an easier time accomplishing the task, as fewer employees, fewer meetings and less turf offer a greater opportunity for detailed explanations of the benefits of centralization. Sonoda subscribes to theories of friendly persuasion backed with evidence of the financial impact to the company.
"We want to change people's behavior, not just talk about discounts and not just police people," Sonoda said. "We make the cost of travel more visible." During the process of implementing the managed transient air program, Sonoda issued monthly "travel cost visibility reports," a diagram of all airline tickets booked that month with plots on the diagram representing both ticket cost and advance purchase time. If an employee booked a $2,200 fare two days before traveling, Sonoda said, its effect would be clear and an explanation requested.
"The standard reports I see show who traveled where and how much they spent, and that's good for accounts payable, but they don't show you that you're spending too much money," Sonoda said.
Macromedia's travel department now handles between 40 percent and 50 percent of the company's meetings, an increase from zero before the initiative began.
Sonoda now is mirroring the meetings initiative in hotel negotiations. The company limits its hotel deals in five key cities, including San Francisco and Boston, to two properties. Sonoda uses combined transient and group volume in negotiations and restricts the hotels with which he negotiates to properties that can meet Macromedia's meetings needs. "We look at the ability of the sales department and the hotel itself to handle meetings. We also look at high-speed Internet and security," Sonoda said. The fact that many of these deals have been negotiated with projected meeting volume, instead of a historical background of group data "hasn't affected it that much, because they know we have the ability to pick the meeting site," he said.
Sonoda's next step may be to involve external meetings technology products in Macromedia's program. "We're a technology company," he said, "so why not use a technology solution?"