Buyers Reduce Costs By Tracking Spending, Compliance

<H1> Buyers Reduce Costs By Tracking Spending, Compliance</H1>By Lauren Bielski

<B>C</B>orporations increasingly are treating meeting expenses with the same scrutiny once reserved for T&E, as a majority now recognize the potential for increasing their buying leverage.

Meetings buyers are not only doing a better job of putting together an accurate accounting of what their companies are spending for meetings, they also are moving to mandate the use of preferred travel services suppliers. At the same time, many corporate planners are considering videoconferencing as a means to reduce travel expenditures.

Many of the meetings buyers who are recognizing the opportunity to seize the data and control the expenditures also are finding increased responsibilities.

Evidence of these trends can be found in a recent Meetings Today survey of 420 corporate meetings planners. More than half of the respondents captured group-related air, hotel and other costs in an effort to boost their negotiating strength. In addition, more than 26 percent mandated the use of preferred air carriers and car rental vendors, and 29 percent mandated the use of the preferred corporate travel agency to book meetings. Thirty-seven percent of planners indicated that they expanded their responsibilities in 1995.

To best manage their meetings expenditures, corporate buyers contacted by Meetings Today said they have figured out how to consolidate spending data internally to negotiate deeper preferred vendor discounts, mandate reduced spending, outsource management and data collection or embrace technology.

The difficulty, however, is that "getting your arms around meetings numbers" isn't easy, points out Audrey Lord-Hausman, manager of corporate meetings and travel at McKesson Corp. in San Francisco. "The problem can start with how a pending meeting is communicated throughout an organization." Merely issuing a memo that fails to give the traveler the full itinerary often results in several ill-informed executives calling the agent to book their airline and hotel reservations separately. The net effect of this uncoordinated process can be last-minute cancellations and rebookings once executives find out that they need to be at the destination several hours earlier than they expected. "You achieve all sorts of operating efficiencies when booking goes through one desk," Lord-Hausman said.

The company has hired a meetings coordinator who works with the firm's agency to capture McKesson's costs and increase compliance. Lord-Hausman estimated that the company has saved between 10 and 15 percent of its operating budget in addition to dramatically improving efficiencies. She and her staff recently instituted a small-meeting assistance program, an online educational tool that gives information about how to communicate clearly with a hotel to arrange a meeting cost effectively.

At technology research developer CableLabs in Louisville, Colo., the mandate is to cut costs as well, and one way is by getting the most out of every trip.

Donna Watford, the company's manager of corporate events planning and travel services, publishes a corporate calendar of travel and meetings so that employees are aware of their co-workers' itineraries and can plan meetings in conjunction with their schedules. CableLabs holds more than 1,000 in-house and 50 off-site gatherings annually.

Rose Ratcliff, meeting planner supervisor of worldwide business planning at Beckman Instruments Inc. in Brea, Calif., relies on her agency, Rosenbluth Travel, to track air and hotel expenses as she manages five operating divisions in the United States and 22 divisions in Europe.

She took on management of the territory last July, and has seen her workload double as the number of meetings at her company-a manufacturer of medical diagnostic equipment-went from 80 last year to 125 this year. A new corporate travel policy mandates preferred hotels and rental cars, both of which she negotiates in volume. "As the company boosted its efforts to market internationally, we realized the buying power we would have if we negotiated as one buyer," she said.

Some planners are turning to videoconferencing for meeting-cost reduction. More than 23 percent of survey respondents said they were planning this year to bring more participants to a meeting through a videoconference, up slightly from last year, when 22 percent said they had done so. Almost 20 percent said they replaced a meeting with a videoconference last year, although the number of people planning to do so this year is 17 percent.

At Ontario Systems Corp., a Muncie, Ind.-based technology company that spent $500,000 on travel last year, Forrest "Woody" Sears, the firm's one-man meetings department, replaced training sessions with videoconferences twice last year, bringing 14 executives from the company's Berlin and Muncie offices into the same room. For 1997, he is considering a simultaneous broadcast conference involving clients in several cities.

Early next year, Dick Slowitsky will downlink a videoconference to about 30 remote locations as part of an effort to take essential sales training information, previously reserved for qualifying executives only, to the entire staff of BancOne, a financial services company in Indianapolis.

BancOne will hold its standard three-day educational conference for top executives this summer in Scottsdale, Ariz., and then will distill that information in the videoconference next winter.

Lynne Beverage, director of corporate meetings and travel for McDonald and Co. Securities Inc. in Cleveland, said her company is considering installing videoconferencing equipment in an auditorium it is building for training sessions.