Managing Meetings at: Safeco Corp.--Co. Weighs Centralizing, Automating
Under a companywide initiative to cut 20 percent to 25 percent in overall costs over the next two years, Seattle-based property and casualty insurance company Safeco is considering the reorganization of its two meetings management departments into one central department, the adoption of technology to automate time-consuming logistical tasks and the advancement of new policy to trim any and all fat off meetings expenditures, said the company's head of incentives.
"This may be an opportunity to centralize all of our meeting planning and really get a handle on our meeting spend," said Kent Kawaguchi, director of incentive marketing for Safeco. "Our company doesn't know how much we spend in total on meetings, how many meetings we have, how many people and how much time is involved in that. I definitely think it represents low-hanging fruit because they'll probably be surprised."
The initiative has made communicating to senior executives the value of a managed meetings program even more important, Kawaguchi said. By understanding the goals of the business, the department can move beyond showing simple cost avoidance and show its strategic value to the company.
"Right now, the way that we justify the program is by showing cost avoidance," Kawaguchi said, adding that the department is evaluating how to measure other goals for return on investment.
"It's hard, but currently we're working to develop metrics to define, for example, the amount of new business we're bringing in because that would really attract their attention. How much are we growing as a result of this program? Growth is a critical goal for our company over the next couple of years," Kawaguchi said. "It's difficult because there are so many variables in increasing sales."
The company has tried a number of different methods to manage its travel and meetings programs. Kawaguchi initially was head of transient travel and incentive programs, but transient travel in 2004 was split off into a separate department while meetings management was split into two: one to handle incentive programs and client-facing events and the other to handle small ad hoc meetings. Kawaguchi's department handles approximately 60 to 70 events per year, ranging in size from 30 attendees to 1,000 attendees, with a total annual spend of approximately $5.5 million.
Kawaguchi has more than 30 years of experience in the travel industry, first at a travel management company, where Safeco was a major client, and then at Safeco for 14 years.
The department may be in store for another reorganization, Kawaguchi said. Safeco in January hired a new CEO, Paula Rosput Reynolds, and launched a business process improvement drive with the goal of trimming at least 20 percent off of company costs over the next two years.
"We've had record profits the past two years, but looking forward we know that to be competitive, the top companies in this area have to operate from a low-cost basis," he said.
Kawaguchi said the department is considering how to best cut or hold steady its labor costs and automate time-consuming logistical tasks in meetings management.
"The company is considering whether to combine all the meeting planning capabilities under one department," he said.
Kawaguchi said Safeco also is considering whether meetings and transient travel should be recombined into one managed department, but that the evaluation process is ongoing.
"There's obvious overlap with the other meetings, but I'm not completely sold on whether one needs to include corporate travel because, to me, corporate travel is a transaction-based business and meetings is usually project-orientated," he said. "I can see it being handled separately, although there should be some close communications between the two." Safeco has preferred hotel partners for both transient travel and meetings, but it has been difficult to find appropriate properties where the two can be leveraged, he said. Most transient volume is placed at midprice properties, while meetings tend to be held at higher-tier properties with meeting space and services.
Most savings generated by changes to the meetings management program will come in 2007, but Kawaguchi aims to trim 10 percent of costs this year.
"One of the key areas where we're trying to cut our expenses is through greater use of technology," Kawaguchi added.
The company has unique needs for its meetings management technology, he said. Incentive trips in particular need integration between such logistical tools as attendee registration and productivity tools that track agents' post-event sales, he said.
Employee air booking is handled through Expedia Corporate Travel and travel management company TQ3Navigant handles travel arrangements for incentive trip attendees. Kawaguchi's incentive and conferences department for the past three years has used San Francisco-based Certain Software's Register123 online registration product for events, though its meetings department does not.
Safeco reviews its use of the product annually and Kawaguchi said Register123 has proven to be a cost-effective solution. The technology investment was recouped "by the first meeting," he said. Kawaguchi uses a licensing agreement with Certain that covers all department meetings, rather than a per-attendee or a per-meeting fee structure that would necessitate an evaluation of the tool for each event.
"When you have a basic set licensing cost, that takes out the problem of whether to use the technology, especially if you have some departments that elect to use it or not based on that per-head cost. We don't worry about that anymore," he said.
Kawaguchi said Safeco evaluated other meetings technology tools, but ultimately decided to adopt Register123 over more expensive, comprehensive tools. "Don't always assume that the more you pay, you'll get more from the product. That definitely wasn't the case here," he said.
Safeco currently uses a blend of external technology and internally developed tools for budgeting and data consolidation. Though many technology companies have begun to push all-in-one management solutions, Kawaguchi said Safeco is seeking to add custom solutions to perform specific logistical tasks.
"We're five or 10 years behind some of the trend-setters in our industry and our goal is to be a leader. There's all kinds of processes within our department that can be done more efficiently if technology is applied," he said.
Kawaguchi said the business process improvement drive presents an opportunity to change how Safeco adopts meetings technology. Currently, the meetings department that manages small, ad hoc events does not use an online registration product and instead uses Excel spreadsheets and e-mail for attendee management.
"This might be an area where, for example, we were combined, if we would probably be able to use the tool for a number of those meetings," he said.
Some technology systems, such as an internally developed mainframe that has been used for years, may need a complete overhaul or may be discarded, he said.