It was a mid-morning break at a National Business Travel Association (NBTA) conference in Tampa, Florida, and I was comparing notes with Terri Payne, the director of corporate purchasing at GSI Commerce Inc., a global company with US headquarters in King of Prussia, Pennsylvania, Terri’s home base.
GSI, with over 5,000 employees worldwide, provides e-commerce and multichannel marketing solutions to some of the world’s leading brands—big names like Levi, Elizabeth Arden, NASCAR, Hewlett Packard, Zales, the NFL and NBA, Toys R Us and many more.
As one of the leading e-commerce technology and services providers in the world, GSI executives, sales and service staff travel. A lot. That’s why Terri was at the NBTA conference, to soak up insight into the management trend that supports applying a procurement discipline to corporate travel.
She and others at the conference who are charged with the daunting task of harnessing travel costs in a tough economy were looking for nuts-and-bolts ideas, how-to’s that would result in better oversight, tougher contract negotiation techniques and, ultimately, more cost and time efficiencies for the company and its travelers.
Develop a from-the-top meetings policy with mandates and an approval process issued and endorsed at the executive level and overseen by purchasing/procurement as well as the department that manages the meeting.
“So, what resonates with you, Terri?” I asked. “Do you think it’s possible to adjust to the “new normal” of reduced travel budgets AND apply classic procurement techniques to cost areas that had historically been more loosely managed?”
“Good question,” she replied. “Easy answer, I don’t know.
“At most companies I’ve worked for in a purchasing capacity, travel just “happened,” with a policy in place but without a lot of tight controls and mandates.”
Terri, and other travel and purchasing managers I talked with at the conference acknowledged that that was “the old norm,” that the tide indeed was turning toward tougher scrutiny from the top and a push to measure service quality and the bottom-line costs of travel’s Big Three: air, hotels, and rental cars.
The subject of meetings came up frequently, both among attendees and conference speakers. Generally viewed as an occasional rather than routine aspect of company travel, corporate meetings are less likely to be factored in to an overall analysis of travel spend. In other words, it’s a missed opportunity for savings.
Shifting costs associated with meetings from a loosely-defined “out there” to firmly under the corporate travel umbrella, tracking key meeting components like air travel, hotel room blocks, ground transportation, meeting room expenses, food and beverage functions, special events, the services of a destination management company, can go far to pump up overall supplier volume and strengthen contract negotiating positions.
Some companies apply an existing travel policy to meetings, but this is only partially effective at best. Meeting planners are likely to use spend categories that don’t surface in day-to-day corporate travel (group ground transportation, special events, travel costs for support staff, for example) so these elements tend to fall between the cracks, well below the expense-control radar.
Take preferred suppliers, for instance. Let’s assume you have a volume airfare contract in place with one or more carriers or a “perks” program alliance with your most frequently-used carriers. The expectation or mandate that those carriers will be used is recognized by your regular travelers and those planners or agents who book their daily/weekly/monthly trips. But the administrative assistant or staff coordinator pulling together your meeting functions might be unaware of the agreements. As a result, unnecessary time will be invested researching options and negotiating contracts for the meeting which will most likely fall short of achieving optimum savings.
Function fragmentation within a corporation can add even more layers to the task of reining in the cost of meetings. Accountability can typically vary from meeting to meeting and can range from the sales department to marketing, from travel management to training, from the finance department to procurement and purchasing……and so on. When it’s time to analyze meeting results, examine costs, and review the data…….where do you begin?
Investigating meeting expenditures and communicating with key players internally can help assemble the decentralized pieces and bring structure to a disorganized meetings process:
- Track down past expenditures that relate to meeting travel for a defined period. Examine expense reports, credit and purchase card bills, purchase orders, divisional budgets, and the general ledger. If you have not already done so, establish a series of reporting codes to be used only for meetings and across all channels to streamline the process going forward.
- Consider getting a purchase card exclusively for meetings.
- Analyze common processes used by those booking day-to-day travel as well as the staff who plan meetings—-what are the commonalties among air carriers, hotel groups and car rental companies that can benefit both? Who are the supplier contacts, what are the quirks, the strong points, the challenges? Who’s user-friendly, who’s not? Where are the opportunities for savings? Discuss, share, recommend.
- Develop a from-the-top meetings policy with mandates and an approval process issued and endorsed at the executive level and overseen by purchasing/procurement as well as the department that manages the meeting.
- Use your company intranet to emphasize the importance of utilizing preferred suppliers for meetings to build volume and maximize cost controls. Include a searchable supplier database to streamline the process.
- Bring your travel management company into the project. Ask their advice on fine-tuning the reporting process—-tell them what your goals are and ask them to design a series of reports that will meet your needs. And make certain they have the latest copy of your meetings management policy and it is top-of-mind among booking agents.
- If your volume warrants it, look into technology to assist in the Strategic Meetings Management Program (SMMP) process.
The topic of virtual meetings was on the agenda at the NBTA meeting, of course. Questions like “When can (or can’t) virtual meetings adequately substitute for face-to-face?” and “What’s next in the evolution of collaboration technologies and how can companies incorporate these technologies and at what cost?” were probed and dissected and, ultimately, left unresolved and tabled for future analysis.
I have long been conflicted about this particular topic, knowing from personal business experience the power of face-to-face, eye-to-eye contact whether across the desk in Wisconsin or with global contacts at a meetings management conference in Asia or Italy or Toronto or Boston.
I was secretly pleased when speaker Waseem Sheikh, Director of Innovations at the Cisco Internet Business Solutions Group concluded his demonstration of Cisco’s dazzling remote meetings technology by responding to a question from the audience about the future of virtual meetings:
“Technology,” he said, “does not replace the human touch.”
Isn’t this all the more reason to evaluate and restructure your meetings management program?