Managing Meetings At Eli Lilly & Co.:
<B>Managing Meetings At Eli Lilly & Co.:</B>
By Chris Davis
Buoyed by millions of dollars in savings and a nearly 90 percent compliance rate for its domestic meetings consolidation program, Indianapolis-based pharmaceutical giant Eli Lilly & Co. is taking the consolidation concept to more than a half dozen countries in Europe.
While language barriers and differing corporate cultures make the meeting consolidation process infinitely more intricate in Europe than in America, George Odom, Lilly's manager of travel and corporate meeting services, said the savings opportunities consolidation offers are too great to ignore.
"We're going to do this country by country," Odom said. "We will start with the United Kingdom and the larger countries, and hopefully we'll be able to use them as a model for the rest of Europe."
Lilly just now is beginning the nuts-and-bolts process of devising a way to capture meeting spending in the United Kingdom, but the company kicked off the program last year with a diagnostic analysis of every targeted country to determine how to best apply the consolidation model to every area's specific situation. "We wanted to find out how big the meetings business is there, what the needs assessment is and what services they wanted and what they didn't want to lose," Odom said. "It varied from country to country and from situation to situation, but lumped together, it all came back to service value--in other words, don't save us a lot of money if you can't add service consistency."
The reaction of each country analyzed by Lilly showed a general interest in the meetings consolidation theory, with the caveat that any new procedures implemented be at least as efficient as those currently in place.
"Some just told us they don't have anybody there to help, and they would like some assistance but don't have the opportunity to increase head count," Odom said. "They wanted help putting something together as long as they're comfortable that what we bring won't screw things up."
<B>Cross-Cultural Considerations</B>
Clearly, Lilly stands at the tip of the European consolidation iceberg, but Odom already has a sense of the challenges that lie ahead.
Aside from the obvious barriers in language and culture, Odom said there are two key differences in the European meetings market: the heavy, and necessary, reliance on local destination management companies for support with logistics and negotiations, and the absence of a pan-European hotel chain that would support volume-based negotiating.
"We can't take the model we have here and drop it there because we just don't have the players that we do in the United States," Odom said. "There are large meeting companies like McGettigan or WorldTravel Partners here that have offices throughout the country, which makes it easier to be consolidated in North America. Plus, there's a lot of destination management companies in Europe, so it muddles it up somewhat. It would be great to have someone to do all my meetings anywhere in the world but to also have local European representation--it's just not out there."
The DMCs are a key cog in the European consolidation machine, Odom said, because the intricacies of local contract negotiations and supplier relationships don't lend themselves to single points of contact, unlike the national sales offices of major American hotel chains.
"The meetings and the relationships are different and you just don't have the chains like you do here, so you can't necessarily negotiate the same everywhere," Odom said. "Not only are those relationships so locally based, but often those hotels don't have electronic booking or contract solutions, or the hoteliers may not even speak English. So you have to get someone who knows the local area and the local customs to do it right. All those things make it harder and longer to go through the process, especially considering that you need to get the buy-in of the individuals in your company."
All that said, the European corporate meetings market is moving into a phase more conducive to consolidation as electronic booking, data management solutions and international networks of DMCs begin to permeate the continent. The result, Odom said, is an environment in which savings can be realized.
"Where Europe is today is where North America was eight or nine years ago," Odom said. "The situation doesn't lend itself to full consolidation today, but they are moving in that direction and are smart enough to learn from their experience."
The nature of meetings consolidation, with its potential to inflame issues of meetings ownership, by itself makes the concept more intricate than consolidating transient travel--which Lilly already has done stateside.
"Of course you want to save money in a meetings consolidation program, but meetings are so service driven that it won't matter if hotels give it away if the meeting doesn't come off well," Odom said. "It's not as much of a commodity as travel buying is."
As such, Lilly is pitching meetings consolidation to its European employees as a combination of consistent service and cost savings after last year's analysis showed it possible to address both issues. Stressing these two aspects of consolidation, Odom said, eventually will allow Lilly to find commonalities throughout different countries.
"At the end of the day, we will find there will be some consistencies between these areas and we'll get to the point one day where they'll all work together," Odom said. "What works in the U.K. may work in France and Italy, but everyone has to make sure they're comfortable and they're getting what they need on a local level."
Eventually, Odom would like Lilly to get to the point where all European data is captured and its companies use it to better control meeting spend and supply consistent service.
Lilly's American meetings consolidation has progressed successfully, with a new meeting policy stressing the benefits of registering meetings with Odom's department, which has led to high compliance and better deals. Odom is loath to put a dollar amount or percentage on the amount of savings his company has realized; "it's all dependent on how you measure the savings, though we will start determining that more aggressively this year;" or its total meeting expenditures, he said. Still, he acknowledged significant savings that paid for the consolidation process quickly after implementation.
Currently, Lilly employees are encouraged--not mandated--to register meetings with the travel and meetings department. It recommends a meeting site and negotiates air and hotel contracts in conjunction with one of its four preferred, but effectively regional, meetings management suppliers. The cost of the actual meeting, but not the work of Odom's department or any third parties, is charged back to the employee's department. On-site assistance is at the discretion of the meeting sponsor.
"We feel the model we have is the right one," Odom said. "We're trying to leverage both Lilly's and our partners' agreements, whichever can help us more. There are also times we can leverage our transient and meeting spend, which we've done. All I want is to maximize the service and the savings.