Managing Meetings At KPMG

<B>Managing Meetings At KPMG</B>
<I>Primed For Pre-Negotiated Meetings</I>

By Chris Davis

As a result of the massive number of short-term meetings its employees hold and the time it takes for its meetings department to plan them, Big Five accounting and consulting firm KPMG is developing a pre-negotiated meetings contract for major hotels in nine gateway cities.

The Montvale, N.J.-based company is working with the national sales offices of "all the major chains" to develop the contract for two or three properties in each of the nine cities, which will incorporate a room-rate sliding scale based on the number of room nights involved, and about three pre-negotiated food and banquet options, said director of meeting services Carol Muldoon.

Muldoon expects the contracts to go into effect at the beginning of KPMG's fiscal year 2001, which is July 1. Since she still is negotiating, she couldn't estimate the amount of anticipated savings, though she said it would be "substantial" given the rates hotels can charge for extremely short-term events.

"We absolutely will save money with pre-negotiation," Muldoon said, though she wouldn't divulge privately held KPMG's annual meeting expenditure. "There are times we pay top dollar booking in the short term."

KPMG held 1,700 meetings in 1999--representing 120,000 room nights--an astounding 880 of which are planned with less than one month of lead time, Muldoon said. Comparably, a recent Meetings Today survey indicates that about 20 percent of all meetings are planned with less than a month of lead time (Meetings Today, March 20), as opposed to KPMG's roughly 52 percent.

"Our short-term, small meetings business is definitely escalating," Muldoon said. "They're mostly one- or two-day meetings with fewer than 25 people, often at an airport property. They're usually not complex, with a deli lunch and maybe one breakout room, but there are times when there are very high-level attendees involved."

The short-term crunch has led the firm to completely overhaul its centralized meetings department, which outsources no meeting function, so that six employees--three planners, two registrars and a billing coordinator, all in Montvale--will be dedicated solely to these short-term meetings.

Muldoon said the short-term meetings will be directed to chosen hotels based on the property's location, availability and the level of attendee. "This will be streamlined to not only present our business as a chunk to national sales representatives, but also to facilitate an efficient level of service," she said.

The chains have reacted positively to Muldoon's proposition, she said. "The chains are excited because otherwise we're a challenge, given the number of meetings we have and the short amount of turnaround time we need," she said.

Despite the fact that statistical data from various parties has indicated that hotel occupancy is slipping, possibly leading to slippage in the seller's market, Muldoon is not particularly concerned with the risks an annual contract might pose. For instance, in June 2001, when the contracts expire, the hotel market could look very differently and the rates negotiated now might not look so good. KPMG's huge meetings volume should lead to lower rates anyway, she said, limiting the risk.

"You always take a risk with an annual rate," Muldoon said. "But we've done enough data tracking and have enough leverage in negotiations that I hope the hotels will take a risk, too. They should take a risk." The properties in question are "Business-level hotels, including some at airports," Muldoon said.

The genesis of the program occurred in November, when a task force led by Muldoon surveyed KPMG department supervisors to discern what improvements could be made in the meetings department. The task force also interviewed each member of the meetings department with the same questions.

<B>Benchmarking Best Practices</B>

Muldoon also conducted a benchmarking study of five companies of similar size that employ at least 10 in-house meeting planners each. The best practices she studied included the methods to which meetings were assigned to planners, site search and registration methods, and the use of third parties.

"People were very willing to help us out," Muldoon said. "But nobody had exactly what we had, and nobody does it like this (with a pre-negotiated contract)." She declined to divulge the other corporations involved.

The end result of the task force's findings and the best practices study was that KPMG would benefit, both financially and from the standpoint of improved service, with planners dedicated to small, short-term meetings.

"There are two key drivers for this program," Muldoon said. "First, we wanted to see if we have the opportunity to leverage volume and save money, and secondly, we learned we can provide a much higher level of service for short-term meetings. The response time can be quicker, the processes more efficient.

"Our meeting managers are frustrated because they've got so many things on their plates," Muldoon said. "This becomes a more effective use of our team. Site search and contracting should be minimized, and we don't have to re-negotiate each meeting every time."

KPMG has a consolidated meetings program and does not charge its internal clients for planning services. Muldoon said there is almost full compliance for companywide meetings, with somewhat less compliance for meetings that involve only local branch offices. Muldoon uses no third party nor outside software to consolidate KPMG's meeting spend. "Just an internal, basic, simple database," she said.

Achieving the buy-in of senior management, the meetings department and KPMG's internal clients for the pre-negotiated contract program was not difficult, Muldoon said. Because KPMG has a history of consolidated travel, beginning with a transient consolidation effort in 1991, Muldoon's superiors in the finance department needed no convincing that the department could successfully cut costs under the new programs.

The meetings department appreciates the expected new setup because of the delineation of duties, Muldoon said, which allows each employee to focus on a particular area. Plus, there were some promotions and staff increases involved, she said. Internal clients will see little difference in the manner in which their meetings are managed, since KPMG already has a policy that all meeting contracts are negotiated and signed by the firm's meeting services department.

"We know that our corporate culture makes our success level higher," Muldoon said. "But we're always looking for ways to become even more efficient.