Managing Meetings At: AT&T

The conference planning division of AT&T has rewritten its group travel policy and signed on with McGettigan Corporate Planning Services for installation of its Core Discovery system, in the most recent chapter of the saga to get its $100 million meeting spend under control.

Use of Core Discovery for monitoring expense is part of the corporation's four-point strategy, first enacted in 1993, which includes an air and hotel program, cost controls for meeting management companies and other vendors, and in-house meeting planner education.

Getting a more organized group buy has been a long haul for AT&T, but the company is adroitly positioned for impressive savings in all areas of the program. It already has seen its group air bill plummet 22 percent below a substantial corporate rate over the past two years, as a result of the high performance expectations it communicated to American Express group travel management services, another agency on its roster. A hard look at management fees also helped trim the budget.

The company is finally in a position to cut group costs by about one-third year over year for at least the next three years. Executive travel and conference services manager James Cutropia also intends to whittle down the vendor base of destination management companies and meeting management companies-which number about 45-to about 12 as part of a cost-containment effort.

Coinciding with Amex's ongoing aggressive negotiations in the air program, Cutropia has sent out RFPs to build a small meeting package program to aid ad hoc planners and those with little background in negotiation.

So far, more than 150 hotels have responded to Cutropia's queries for plush service and deep discounts. He is looking to create the fail-safe "packaged discount" program that is becoming increasingly popular.

"We estimate that 35 to 40 percent of our meetings are held with 50 employees or fewer," he said. "Since it doesn't make sense to allocate extensive management resources to these very standard sort of gatherings, we need a program in place to keep the negotiated terms controlled."

Now, the installation of Core Discovery will help build on the credit card data and master bills that AT&T's conference planning group and consultants first analyzed when more orchestrated purchasing efforts began four years ago.

Earlier this month, the first desktop units were installed in Cutropia's office. As part of the new effort to register most of the estimated 3,000 annual meetings held, two McGettigan coordinators will be on hand for phone or fax registration from planners at the company's various business units.

Desktops eventually will be placed in all of AT&T's group conference and travel offices. All full-time conference planners will learn how to register their own meetings and will have access to all the reports, frequently used vendors and general meeting activity generated by the company.

Software training sessions will likely take place during Center of Excellence sessions-the regular gatherings designed to discuss best practices and a cornerstone of the meetings program.

McGettigan also will partner with the conference planning division to roll out out a training and certification program, which should be running by the fall.

In coming months, the conference planning services division also intends to have a more logistics-oriented component as a customized addition to McGettigan's package. If the two pieces cannot be integrated, AT&T might roll out its own program for nuts-and-bolts work.

Cutropia began to look at the telecommunication giant's decentralized purchasing after reorganizing and centralizing full-time conference planners in 1991. He wrote a white paper to senior management soon after pointing out the error of AT&T's ways and the tremendous opportunity for future savings.

Although senior management in the central services purchasing organization was at first skeptical that "dollars spent on parties could amount to that much," Cutropia said, his observations soon coincided with a new mindset that hit the organization in late 1993 and 1994, when the company felt that it no longer had a license to print money.

As belt tightening ensued, T&E and other areas in purchasing and administrative services were more closely scrutinized.

Finally, senior management sanctioned a closer look at meetings, and Cutropia began to put together a snapshot of conference spending by assessing vendor relationships and talking to administrative assistants throughout the organization.

"During discussions that our cost-reduction analysis team had back in 1994, we developed a four-point strategy for overall meeting consolidation, beginning with an organized air program, working to orchestrated hotel and conference center purchases, extending to destination management companies and meeting management vendors, and finally including the dissemination of best practices," Cutropia said.

Cutropia also wants to extend the organization's team-building approach to vendors. "I want to build partnerships so that our vendors shift from wanting to get business from us into a mindset of creating partnerships over time."

Although AT&T's cost-reduction tactics-getting a dedicated agent for group air negotiations, reducing its overall agency vendor base and leveraging meeting volume with a preferred base of hotels-are in many ways standard practice in 1997, Cutropia pointed out that even putting together an RFP was very much a speculative exercise a mere three years ago.

"When we first were looking for an agency to handle our group air, we didn't know what procedures we wanted in place, and we weren't sure exactly what sorts of reports and services would be most useful," he said. It took a lot of input from the cost-cutting team, which included consultants hired from AT&T's senior management in 1994, to develop an RFP "that would get us the best service and the deepest cuts," Cutropia said.

At first, a major criterion governing the choice of air agencies was a guaranteed cost reduction up front. Likewise, when AT&T went to McGettigan to review Core, it was looking for certain performance standards.

"We were going to build our own software to track meeting expenses, and we had some programmers work on the project," he said. "But when I realized what McGettigan was doing and reviewed their equipment, it was evident that partnership was a great option.