Purchasing brings big savings to meetings spend
ACTE event shows travel buyers how to better manage the travel spend
Susan Avery -- Purchasing, 7/1/2009 11:24:16 AM
Meetings, meetings, meetings was the title of the first session on the agenda at the Association of Corporate Travel Executives (ACTE) Executive Forum in Boston recently where travel buyers from local companies learned about the importance of travel procurement involvement in managing the spend from industry experts.
Travel buyers also heard about the savings, savings, savings that can result from procurement taking a lead role and how to get started if not already involved in managing spending on meetings.
For most companies, the meetings and events spend makes up about 1% to 2% of top-line revenue, said Chuck Ghoorah, executive vice president, sales and marketing at technology company Cvent. He was a member of the panel that addressed the 86 travel buyers and suppliers attending the forum at the Omni Parker House hotel. It was the 8th such event ACTE has held in Boston.
Also on the panel were George Odom, senior director, business solutions at Advito, and Lyndsey Pomella, former manager, hotel, meetings and ground transportation at Philips Electronics. Mark Williams, vice president, business solutions at Advito, moderated the panel.
Ghoorah said that the result of or opportunity for procurement involvement in managing the meetings and event spend amounts to about 20% in cost reductions, with companies with more mature programs realizing savings of about 7% annually. He added that not centrally managing the spend opens up risk for a company.
Williams recounted results of a poll of ACTE members (and also took a quick count of hands around the room) that show for the majority of companies, the meetings and event spend remains largely unmanaged.
"Take a proactive stance to centralize spending rather than have meetings and events hoisted upon you," was Ghoorah's advice to travel buyers not yet involved in managing the category. "It is a bear of a project, but you will bring value to your organization."
Ghoorah described a timeline of how purchasing in general first became involved in managing meetings and events spending at companies 15 years ago after consolidating travel spending or "slaying that dragon." Companies where that occurred initially are in the pharmaceutical and financial services industries, both highly regulated.
Most companies, however, don't know how much and with whom they are spending on meetings and events. Pomella, who had managed the meetings spend when she worked at Philips, suggested that travel buyers get started by gathering data from such sources as ERP systems, credit cards-T&E, purchasing and meetings-purchase orders and suppliers (i.e., travel management companies, hotels, airlines).
Perhaps most important to the success of purchasing involvement in centralizing the spend is enlisting the support of the company's top leadership, she said. "It's out there and dangerous. But money talks. Get an executive advocate." For her part, she had the company CFO on her side and met regularly with a CFO panel.
Odom of Advito chimed in that Sarbanes-Oxley (SOX) regulations also help move purchasing's efforts along. SOX regs (that hold penalties) mandate executive sign off on spending in such categories as meetings and events.
"SOX keeps purchasing from being the bad guy when buyers work to consolidate spending on meetings," Odom, told forum attendees. "It creates the sense that purchasing is there to help the company's businesses. It builds a more collaborative environment." Odom speaks from experience. His background includes experience working in purchasing at Eli Lilly.
Pomella added that the global economic downturn is helping as well. "Someone will listen to you," she said. "You may not get the resources, but the economy will open the door to look at it, and provide the opportunity to add value."
Also on the agenda at the ACTE Executive Forum was a presentation on hotel management by Nicole Hackett, managing director, sales and marketing for the Hotel Sourcing Alliance, and an interactive session on the role of travel procurement in security and safety led by John Rendeiro, vice president, global security and intelligence at International SOS.
Danny Hood, president of the Americas region for BCD Travel recapped lessons learned in a lunch presentation.
In her welcome at the start of the event, Kerin McKinnon, planning committee chair and executive vice president, global business development at Atlas Travel International, provided attendees with an update of ACTE activities. These include a new strategic alliance with the Professional Convention Management Association (PCMA).
See also: A strategic meetings management program can be competitive edge in a down economy
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