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Strategic Meetings Management Peter Moen Vice President, Carlson Meetings and Events. Strategic Meetings Management I. Industry Changes II. What is Driving Change? III. What is Strategic Meetings Management? IV. Where are the Savings? V. What are my Options and Critical Success Factors?.
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Strategic Meetings Management Peter Moen Vice President, Carlson Meetings and Events
Strategic Meetings Management I. Industry Changes II. What is Driving Change? III. What is Strategic Meetings Management? IV. Where are the Savings? V. What are my Options and Critical Success Factors?
Meeting & Events: A Fertile Ground • Estimation of Meetings and Events spend is about 150 Billion US$ (35- 45 % of Business Travel spend) • Historically meetings and events have been managed individually and outside of the corporate travel program • Rarely do companies have group and meeting data to leverage with corporate travel data • Meetings and Events often times is very nearly as much as corporate travel, varies by industry segment
Group Policies Percentage of companies reported to have… NascentStage BestPractice 15 % 36 % 29 % 20 % 100 % "No formal policy "No formal policy but informal guidelines exist " "Meeting/Events policy as part of the T&E policy" Embryonic MeetingEvents Policy Source: AT KEARNEY
Procurement Involvement Today 60% To what extent has procurement become involved in your decision-making process 18% 15% Source: Prmedia Business
Procurement Involvement Future 41% To what extent has procurement become involved in your decision-making process 32% 27% Source: Prmedia Business
Drivers of Change • 9/11 – More control from Procurement • Success of Corporate Travel Programs • Sarbannes-Oxley • Growth of the Internet
Managed by Sales and Marketing Managed by Procurement Three Major Travel Spend Categories • Individual Business Travel • Highly leveraged through established supplier programs • Big push to book through the Internet • Typically consolidated with one agency • Small Meetings • Arranged by Administrative Assts • Booked as corporate travel transaction • Little or no procurement process for airline or hotel selection and contracting • Large, Complex Events • Involves attendee mgmt, production, on-site assistance • Typically managed Ad Hoc • Separate procurement process
Existing Process Procurement Process Suppliers Air Fulfillment Meeting/Event Arranger Meeting/Event Arranger Meeting/Event Arranger A different process is followed for every meeting and event
Strategic Meetings Management Procurement Process Suppliers Air Fulfillment Meeting/Event Arranger Meeting/Event Arranger Meeting/Event Arranger Consistent Procurement, Delivery and Air Process
Corporate vs. Group Air Air Hotel Hotel Corporate Group Much higher hotel (65% vs. 35%) spend in group travel • Due Food and Beverage, Meeting Room, Audio/Visual • High Yield business for hotels, can be used to leverage transient rates
Procurement Process Meeting Requirements Size, Type, Timing, Flexibility, Destination options Step 1 Step 2 Air Analysis, Destination Scans, Final Specs Site Selection Step 3 Availability, F & B, Room Rate, Function Space Bid Process Concession Negotiation Room Rate, Meeting Room, Commission, F&B Step 4 Step 5 Contract Negotiation Cancellation Penalties, Attrition, F&B Guarantees Step 6 F & B Guarantees, Room Attrition/No Shows, Audio/Visual, Activities, Billing Review, Ground Transportation, Meeting Operation Following ALL Steps can generate 15% to 25% Savings
“Unmanaged” Procurement Process Meeting Requirements Step 1 Provides leverage with Suppliers, often these processes not followed without a policy and process Step 2 Site Selection Step 3 Bid Process Concession Negotiation Step 4 Without Steps 1-3, very little leverage, savings opportunity reduced Step 5 Contract Negotiation Without knowledgeable, experienced on-site support, very little savings obtained during meeting operation Step 6 Meeting Operation Performing only Steps 3-4 reduces savings to <3%
Procurement vs. Operation Meeting Requirements Step 1 Step 2 Site Selection 62% of savings generated following all steps of Procurement process Step 3 Bid Process Concession Negotiation Step 4 Step 5 Contract Negotiation 38% of savings obtained during Meeting Operation Step 6 Meeting Operation
15-25% Total Savings Opportunity Savings Breakdown Majority of Savings are in Hotel Negotiations
# of Meetings Spend Spend by Meeting Type Low Complexity, (74%) yields the lowest amount of spend (26%) High Complexity, (8%) yields the greatest amount of spend (45%)
Configuration Options • Preferred Supplier • Allow planners to choose between 3-4 suppliers • Outsource to One Supplier • Similar to corporate travel, leverage technology, processes and dedicated teams • Manage internally, central services • Hire and manage process through internal workforce
Estimating Spend • What is our Meeting and Event Spend? • What is the savings potential? • What technology do we need? • What is the cost of delivery? • What is the Return on Investment?
Estimating Spend Meeting spend is a function of total T & E expense Step 1 - Estimate total T & E
Estimating Spend Meeting spend is a function of total T & E expense Step 2 - Estimate % of Meeting Spend
Estimating Spend • Administrative Survey can also be used • Helps validate the “top-down” calculation • Helps identify stakeholders • Needs executive sponsor to ensure high response rate • Questions will help identify # and type of meetings • How many meetings do you plan a year? • What size are the meetings?
Estimating Savings Savings is based upon spend categories Step 3 - Estimate Meeting Spend Breakdown Spend Breakdown % based upon consolidated database of spend
Step 4 - Estimate Savings based upon spend breakdown Estimating Savings Savings %’s by category are based upon historical results
Meetings Technology Program Management Meeting Request Qualification Procurement Sourcing and Contracting Invitation and Registration Airline Ticketing On-Site Execution Post Event Data Consolidated Technology