Implementing a strategic meetings management program offers
the possibility of lower corporate meeting costs through better leverage of
spending with suppliers and lower contractual liabilities, among other factors.
The cost of such implementation, though, can vary widely based on the size of
the organization and the scope of the program.
SMM programs typically include some technology
implementation, often from a third party. But purchasing licenses for such
technology can be just the beginning of SMM expenses, according to Novartis
associate director of strategic sourcing Adrienne Fox, speaking during a March
client conference held by meetings technology company Cvent.
For an SMM implementation at an undisclosed company for
which Fox worked before joining the pharmaceutical firm, "for the United
States only, we put out a number of about $150,000 just to start to get two
sourcing managers, a technology tool and some consulting to help with policy
development and stakeholder communications," she said. "Ironically,
the play was made that some of that would then be refunded back with commissions.
It's challenging."
Defense contractor Raytheon had no interest in developing
internal meetings technology on which to base its SMM implementation, said
director of meetings and special events John Touchette, also speaking at the
Cvent conference. The company's information technology department therefore
advocated for spending on an external tool. But Raytheon, too, incurred
additional expenditure.
"We went to the business CFO for the Cvent component,
but there's a lot of ancillary expenses," Touchette said. "There are
the consultants we hired to build the website and policy, and even internally
within the company, we had to pay IT to review the process, pay our learning
team to build the video training modules and pay our change management team to
help us communicate the plan. It's not a huge amount of money, it may be
$10,000 to $25,000 a year."
On the other hand, at Bank of New York Mellon, "the
first time I asked for a check was when we bought Cvent [products]. I didn't
have any funding issues up to that point," said strategic meeting program
manager Mary Beth Jenson.
Building A Case, Or
Not
BNY Mellon senior management's interest in the scope of and
potential liabilities within the financial company's meetings program triggered
the development of SMM, Jenson said. As such, "I didn't have to build a
business case," she said, "but when I went to propose the SMM to
senior executives, I had real-life experiences to draw upon. We had some
horrible situations with cancellations, but also had a good situation with
cancellation from our group, [which] always adds a construction clause to our
contracts. We were able to save thousands of dollars in cancellation fees
because major construction went on six months prior. We were protected and
canceled without penalty. I presented real-life issues and situations as to why
we needed the new SMM, not a lot of data."
Other companies, though, will undergo a full review of
potential costs and financial benefits of strategic meetings management
implementation before authorizing any funds. Though costs vary, some industry
associations, third parties and vendors have issued at least general guidelines
or models of potential SMM expenses.
"Luckily, there were many successes and savings in the
pharmaceutical world, so we had those examples to share with them," said
Fox regarding the presentation to senior management of the SMM business case. "You
can see savings in all different areas: logistics, venue sourcing, contracts
from preferred hotel chains, production, res services, etc. From that
perspective, it was an easy sell for the CFO, [to whom] all the sourcing and
procurement departments report. A lot was sold on financial value, not just
from savings in negotiations, but also risk mitigation—cancellation alone is
huge."
At Raytheon, Touchette formed a meeting advisory council
that included representatives from the procurement and IT departments, and
studied best practices and white papers before presenting a case to management.
"In a non-mandated environment, you just have to start showing people
where these opportunities are: how you can create efficiencies by using
technology, how we can create savings, how cancellation penalties now apply to
future meetings because we built those relationships and we know what the needs
are."
This report
originally appeared in the August 2012 issue of Travel Procurement.