Midmarket Meetings Program Gets Cost-Neutral Makeover

When Informatica hired Marjan Ghaffari as senior procurement analyst for meetings, events and travel in December 2014, the data integration and software company tasked her with centralizing procurement for the 40 to 50 meetings organized annually by its 15 U.S. offices.

First, Ghaffari met with the office managers and administrative assistants who'd been planning the meetings so she could understand their businesses and make them aware she was there to help.

Each of these unofficial meeting planners was using too many suppliers, she learned, and many departments used overlapping suppliers. They also were negotiating their own contracts, despite a lack of negotiating experience. "There were no savings that were documented or realized," Ghaffari said.

"I just dove into doing all the sourcing myself for their upcoming events." Those solo sourcing efforts saved Informatica $600,000 in 2016, Ghaffari said; the company's meetings spend ultimately added up to $18 million that year.

Third-Party Support

Even as she was pulling in impressive savings, she thought she could do better. "The program would be best leveraged if we partnered with a third party [SMM] vendor," she said.

There just was one problem: She had no budget.

What she did have was information. Ghaffari had gathered data on the company's meetings spend, compared Informatica meetings policy and process parameters with similar corporations and asked about best practices. She had done due diligence research on several strategic meetings providers to understand their offerings; specifically, she researched providers that touted cost-neutral models.

Her search turned up several variations on "cost neutral" and few that fit a midmarket meetings program. "Many [SMM providers] had revenue commitments that needed to be met in order to be cost neutral," she said. "Others had hidden costs."

Ultimately, she launched an RFP, including a requirement that Informatica would incur zero cost. Without that guarantee, a third-party was a nonstarter.

The Business Model

Informatica ultimately decided on American Express Meetings & Events. American Express Meetings & Events estimated that Informatica could cut 20 percent of its meetings costs by leveraging the increased buying power of a partner, and it proposed using venue commissions to achieve Informatica's no-cost demands.

For every meeting that American Express Meetings & Events sources for Informatica, the commissions kick back to the SMM provider. Since Ghaffari was not realizing commissions from meetings organized internally, that was not a loss of revenue for her program. Yet, there was still the risk that her midsize organization's meetings volume would not produce commissions that would cover American Express Meetings & Events fees.

To prevent that, the partners agreed on a hybrid model. Informatica uses the SMM provider's services only for meetings that include at least 10 room nights, ensuring American Express Meetings & Events realizes adequate commissions for every meeting it touches. For small meetings that do not meet that threshold, meeting organizers across Informatica's U.S. offices lean on Ghaffari for sourcing and contracting support.

The process to request a meeting, however, is the same in both scenarios. American Express Meetings & Events has made its meetings management technology available through an Informatica portal. Meeting planners access the tool to initiate a meeting request, entering standard details like dates and number of room nights. The tool traffics all requests to Ghaffari, who either pushes the request to American Express Meetings & Events for venue sourcing or takes the smaller meetings into her own hands. Driving all meeting requests through the same initiation process and tools means that meeting planners have one set of instructions and that Informatica's meetings data is centralized for reporting.

Growing the Program

While it's still early days, Ghaffari said sourcing meeting venues has become more efficient, giving Informatica employees more time to spend on their core jobs. Plus, consolidated data has made meetings spend easier to track. In terms of savings, Ghaffari said, American Express Meetings & Events is "definitely able to achieve greater savings than if I were to negotiate the contracts on my own."

Early successes from the January launch in North America have prompted Informatica to plan to roll SMM out to 30 countries throughout Asia, Europe and South America this year.