Integrating Corporate Travel, Procurement and Meetings Management A BEST PRACTICES ROADMAP TO STRATEGIC MEETINGS MANAGEMENT SUCCESS SPONSORED BY

Integrating Corporate Travel, Procurement and Meetings Management A BEST PRACTICES ROADMAP TO STRATEGIC MEETINGS MANAGEMENT SUCCESS SPONSORED BY

Integrating Corporate Travel, Procurement and Meetings Management Integrating Corporate Travel, Procurement and Meetings Management Even for companies with mature travel management programs, meetings often represent a fragmented and uncontrolled spend category. By integrating strategies between travel and meetings departments, companies position themselves to reap big rewards through increased spend visibility, control and compliance. EXECUTIVE SUMMARY As the economy threatens corporate revenues, travel budgets are being scrutinized and travel managers are being pressed for further cost savings and tighter management controls. While many have proposed managing meetings activities more tightly in the past, such efforts have often been passed over by executives who either did not realize the magnitude of meetings spend within their organizations or simply could not see the path forward. White paper produced by CONTENT SOLUTIONS Elizabeth West Director elizabeth@promedia.travel Colette Mirro Creative Director colette@promedia.travel Louis Magliaro EVP Sales & Marketing louis@promedia.travel Tim Reid President & CEO tim@promedia.travel Sponsored by Meetings spend is one of the least transparent spend categories in an organization. When corporations delve into the issue, they are likely to find that as much as 35 percent of travel spend is dedicated to meetings. With the progress travel management has made over the past 10 years incorporating procurement strategies, sophisticated booking and tracking tools, and strict supplier management the knowledge that organizations may leave more than a third of their leveraging power on the table should be an impetus for action. But the path toward integrating meetings and corporate travel is challenging. Companies must determine how to Overcome decentralized data silos Find the synergies between travel and meetings that allow them to work toward common goals Create specific meetings policies Introduce strategic concepts to ad hoc processes Acquire the tools to guide processes Aggregate data to increase leverage with suppliers In this white paper, StarCite presents its latest industry research about where corporations stand when it comes to travel and meetings integration and a roadmap for companies ready to reap the rewards of an integrated approach. TRAVEL AND MEETINGS MANAGEMENT: A COMPARISON In August 2008, StarCite surveyed nearly 150 travel managers, purchasing executives, meetings managers and other titles related to travel and meetings to gain insight into common practices each side has used to achieve its goals. The study showed a wide gap between corporate travel and meetings strategies. In terms of policy, nearly 95 percent of respondents indicated they had either a mandated or non-mandated travel management policy in place, and almost 2 PROMEDIA.TRAVEL/WWW.PROMEDIA.TRAVEL

55 percent of these respondents indicated that policy compliance exceeded 75 percent. That compared with only about 40 percent of companies that had established meetings policies, a circumstance that makes meetings policy compliance a less compelling inquiry (fig. 1). Interestingly, 39 percent of respondents said that their companies applied existing travel policy to meetings programs. While this approach can be partially effective, a travel policy generally lacks spend categories that meeting planners use on a regular basis, such as ground transportation for groups or support services like a destination management company. Speaking on a recent webinar panel about this topic, Linda McNairy vice president of business development for StarCite, confirmed. It s not uncommon to begin with the travel policy, she said. Although I think most would agree that you quickly learn that the travel policy does not apply to the meetings program and there is some tweaking that needs to be done. Strategic sourcing is another area where meetings lagged behind (fig. 2). According to the StarCite study, more than 71 percent of companies had preferred supplier relationships with all three major travel categories: air, hotel and car rental. Only 5 percent lacked preferred relationships as a whole. That situation was quite different on the meetings side, where nearly 32 percent of companies lacked preferred suppliers entirely. Without preferred suppliers for meetings, corporations leave themselves open to multiple risk factors. In the short term, it may be a productivity issue. If performed thoroughly, researching suppliers and individually negotiating each supplier contract for each meeting P program is an extremely labor-intensive process that a preferred supplier relationship should help to streamline. In the long term, however, such practices easily become a financial or legal liability. As professional planners take on heavier workloads, their ability to source and contract FIGURE 1 POLICY IN FOCUS Almost 95 percent of survey respondents revealed their companies had a working travel management policy. Only 40.6 percent of respondents could say the same about meetings policies. Travel Which best describes your company s travel management policies? We do not have travel policies 2.2% 3.0% 37.0% Policies are established but not supported by mandates Meetings Does your company have a policy specific to meetings? 20.3% No, there is no policy in place 39.0% No, but we use our T&E policy Policies are not established 57.8% Policies are established and supported by corporate mandates 19.5% Yes, and it is enforced 21.1% Yes, but it is not enforced PROMEDIA.TRAVEL/WWW.PROMEDIA.TRAVEL 3

Integrating Corporate Travel, Procurement and Meetings Management FIGURE 2 Strategic sourcing is another area in which meetings management lags behind corporate travel when it comes to implementing best practices. SOURCING IN FOCUS The vast majority of respondents surveyed had preferred supplier relationships for travel programs. Not so for meetings. Travel Which of the following best describes your travel management program? 11.0% We are trying to establish preferring suppliers 12.5% We have preferred suppliers 5.1% We do not have preferred suppliers 71.3% We have preferred air, hotel and car rental Meetings With what types of suppliers does your company have preferred relationships for meetings? Hotel 54.5% Air 50.4% Car Rental 42.3% Ground Transportation None of the above 30.1% 31.7% 4 PROMEDIA.TRAVEL/WWW.PROMEDIA.TRAVEL

thoroughly is diminished. Put ad hoc planners into the mix who often lack core competency in meetings and event planning and the risk factors can rise significantly, whether in the form of steep attrition or cancellation fees, crisis planning or even basics, such as negotiating discounted group rates. A senior meetings professional for a Top 100 pharmaceutical and health company, recounted her experience as the strategic meetings champion in her organization. I have case study after case study of admins all going to the same hotel. They ve all gone to the same sales office and they ve all gotten different rates at the hotel for a small meeting, she said. To streamline data collection for all meetings, a simple registration template has been devised that will be rolled out in 2009 to ad hoc planners. The template will feed meeting data into the company s centralized meetings management tool and allow for better quality control. To that point, technology tools play a large role in any effective meetings management and integration initiative, but the survey suggests that it is another area where many companies have not yet made the investment that will help control the planning process. Unlike the travel department, which is likely to rely primarily on a TMC or online travel management software, meetings departments often utilize multiple tools. The most prevalent for the companies responding to the StarCite survey was the homegrown spreadsheet (see fig. 3). MEETINGS MANAGEMENT TOOLS Spreadsheets are by far the most commonly used meetings management tool. FIGURE 3 Unlike a travel department, which is likely to rely on a TMC or online travel management software, meetings departments utilize multiple tools to manage activity and spend. What kinds of tools/technology systems does your company use to manage meetings? Transient travel management tools 32.2% 4.2% ERP financial software Expense reporting software 16.1% Meetings management tools 26.3% Spreadsheets 42.4% Other 18.6% PROMEDIA.TRAVEL/WWW.PROMEDIA.TRAVEL 5

Integrating Corporate Travel, Procurement and Meetings Management The lack of consistency inherent in individualized spreadsheets could make it impossible for a company to aggregate meaningful data to integrate with corporate travel volume. This is a fundamental reason that more than 46 percent of the companies surveyed do not integrate travel and meetings data and nearly 27 percent more do so only on a limited basis. Meetings Metrics Identifying a path for success is a vital part of a meetings management integration effort. Be sure to put metrics in place that can measure progress from the beginning. The National Business Travel Association offers more guidance on meetings metrics (www.nbta.org). But consider the following: Service Attendee and sponsor satisfaction Cycle times Financial Spend Savings and cost avoidance Cost per person Cost per meeting resource Volume How many meetings held, canceled, denied Average meeting duration Resources Staffing hours Forecasted workflow THE ROLE OF TRAVEL & PROCUREMENT Meetings departments support a layer of goals that travel departments do not typically address. Whether it is training, client education and entertainment, rewarding a sales team or facilitating an executive roundtable, if a meeting does not achieve specific objectives, the resources have been wasted. In the past, such goals might trump policy adherence or spending caps. As corporations tighten their financial belts, however, meetings managers must find ways to satisfy cost-cutting demands while still accomplishing event objectives. By taking cues from their travel management and procurement counterparts and working together toward common management goals meetings managers can facilitate more streamlined processes, better risk management and more control over meetings spend. Travel management is often versed in implementing and refining policies, homing in on key performance indicators, and sharing rolled up data in the form of executive reports. With so many companies lacking a specific meetings policy, travel and meetings departments should work together to study requirements for such a policy and use the travel policy to guide them. Meetings managers will need to bring specific requirements to the table and be ready to justify when and how they are used. Simultaneous with policy creation, travel and meetings departments should create the metrics by which their efforts will be measured (see Meetings Metrics sidebar, page 6) and consider how this data will be collected and reported (see Role of Technology sidebar, page 8). Procurement traditionally brings a higher level of oversight to the meetingstravel equation. With a hard look at meetings process and standardization, meetings managers can work with procurement departments to streamline sourcing and contracting and, very importantly, can follow their lead to address some aspects of risk management. Procurement, and more recently travel, is versed in corporate RFP processes that establish preferred suppliers in several key areas for meetings: air, hotel, and car rental. And for additional vendors, such as destination management companies, third-party planning firms and production or audiovisual companies, procurement is likely to be able to assist in forging larger corporate relationships that will result in cost savings and productivity increases. Further, procurement often brings contracting expertise to the table, which mitigates liability. 6 PROMEDIA.TRAVEL/WWW.PROMEDIA.TRAVEL

Clearly, most companies have the expertise among travel, meetings and procurement to reduce meetings costs and manage risks. But many are paralyzed by the seeming enormity of the task. They key is obtain executive endorsement and then take the process step by step. UNCOVERING CURRENT MEETINGS SPEND Organizational fragmentation is at the core of many challenges when it comes to meetings. Unlike a centralized travel department, which may ultimately report to procurement or finance, accountability for meetings is often spread throughout the corporation (see fig. 4). According to the StarCite study, less than 50 percent of respondents indicated their companies had a centralized meetings team and only 50 percent of those companies processed all of their meetings through that team. In many corporations, administrative assistants or other ad hoc planners have responsibility for small meetings that may fly under the radar entirely. Finding these meetings centers and data repositories can be difficult, but several avenues can be explored. Corporate card Corporate cards are a good place to start a search since they re a good source of meetings information, especially if the company utilizes a dedicated meetings payment card. If not, work with the corporate card provider to break out line items that are likely to be related to meetings: a meal with 10 or more diners, audiovisual charges, large hotel room blocks or banquet charges, etc. According to the StarCite study, less than 50 percent of respondents indicated their companies had a centralized meetings team. RESPONSIBILITY FOR MEETINGS IS OFTEN FRAGMENTED THROUGHOUT AN ORGANIZATION. FIGURE 4 In your organization, where does the ultimate responsibility for meetings report up to? 21.3% 20.5% Other CFO/Finance Shared Services/ Business Support Services 12.3% Meetings and Events 9.8% 14.8% Sales/ Marketing 11.5% Procurement/ Purchasing 9.8% Travel Management PROMEDIA.TRAVEL/WWW.PROMEDIA.TRAVEL 7

Integrating Corporate Travel, Procurement and Meetings Management Finance and/or purchasing departments Research expense reports and purchase orders for similar line items listed above. Look for codes that indicate meetings or event planning, hotel, conference center, etc. If the finance and purchasing departments do not break out these codes, work with them to implement strategic changes to further the meetings management initiative. BEST PRACTICE Payment Solutions Consider using a specialized meetings payment card for all meeting purchases. This payment option offers companies an easy way to categorize line items, reconcile accounts and streamline the payment process. Many companies issue an individual meetings card for every program registered and approved in a centralized data hub. All charges to that account should be associated with the individual program and can be fed to a meetings management tool or other expense system for easy identification. Meetings cards help increase visibility into individual program spend and alleviate many of the process dollars associated with cutting checks to individual vendors. Individual meeting planners Some companies have as many different meetings spend tracking tools as there are meeting planners. Find out who plans meetings for each business unit and ask them for their records or ask managers to acquire them. Suppliers Suppliers often track meetings spend better than their clients. Go to them with a spreadsheet listing the data required and ask for as much information as they can offer. Central data/meetings management tool If the company has a central database for meetings information or a meetings management tool, this would be the best place to start. Keep in mind, the StarCite survey indicates only a minority of companies have such a resource. And without a strategic meetings management program and an adoption management strategy in place, there s a significant likelihood that not all planners use the tool. CREATING POLICY In order to create a meetings policy, a company must get a handle on the types of meetings its planners organize: sales, training, marketing events, industry conferences, executive retreats, incentive programs, etc. Each of these meeting types will have specific needs. A training program, for example, might incorporate several waves of attendees and use a conference center that can provide extensive computer networking and IT services. A marketing meeting may require elaborate audiovisual for product introductions. An executive retreat or sales incentive may require an upgraded class of service or destination management assistance to meet its objectives. All of these areas represent layers of objectives that traditional corporate travel policies do not address. It is a best practice to work with meetings stakeholders to define their needs and determine how they overlap with each other and with the travel department as this is where the process of integration can start. Certainly, travel and meetings policies surrounding air, hotel and ground transportation should be aligned to support each other as well as overall corporate goals. Further, the parties should work together to create parameters around what planning tools should be used and the processes that must be followed to create a consistent flow of data. If exceptions to policy may be made, a clear approval process should be in place to control those exceptions and track them. Ramifications for non-compliance should also be considered and clearly communicated. 8 PROMEDIA.TRAVEL/WWW.PROMEDIA.TRAVEL

STRATEGIC SOURCING AND CONTRACTING As companies gain visibility into meetings spend and activities, they may begin to see patterns develop. Working together, travel, meetings and procurement managers should analyze these patterns, look at current contracts and discounts, if any, and determine how they measure up to benchmarks on the travel side. They should keep in mind, however, that meetings may not get the same preferred rates as transient travel. For example, there are several mitigating factors when negotiating with a hotel for a meetings program. Time of year, availability, ratio of meeting space needed to sleeping rooms used, and likely food and beverage purchases often influence a planner s ability to negotiate discounted room rates and other items. Unlike transient travel contracts, which are traditionally negotiated annually, meeting planners are likely to negotiate each meeting separately taking many variables into consideration that are specific to that program. Nevertheless, as better volume data is introduced to suppliers, the easier it should be to increase savings across the board. It is a best practice to work with a regional or national sales representative to relay an overall picture of meetings spend and to negotiate basic terms that may be refined for specific program purchases. In general, corporations have taken one of two approaches either supportive or dominant when it comes to contracts, but the intention for both is to ensure that a centralized authority has some degree of oversight for individual meeting contracts. This ensures standard corporate clauses are included and minimizes liability. Whether procurement provides a supporting role or a dominant role depends upon the corporation s culture and often upon the professional level of the planners involved. For a supporting role, a new meetings policy might mandate that each contract a professional planner negotiates or modifies is subject to review by a central individual within procurement. Corporations should be careful, however, to understand the volume of their meetings contracts in order to provide the support and quick turn-around times a planner often needs. If purchasing is to play a more dominant role, it is wise to include meetings professionals within procurement to assist logistics-oriented planners in contract negotiations. The meetings specialists, trained in procurement best practices, could also be the signatory for the contracts. In an integration effort, all sourcing and contracting considerations should be viewed with the goal of aligning meetings and travel to achieve the most effective spend management overall. That may mean changes to both sides of the travel-meetings equation. On the transient side, do current suppliers have the ability to offer group travel services? A good example is ground transportation. If a company currently has a preferred black car or limo service, does that same supplier offer motor coach and van services? If not, it may be time for a change. Likewise, do preferred transient hotel properties offer adequate Role of Technology Although many companies have not acquired a central meetings management tool, the role of such technology cannot be overstated. Just as online booking tools have revolutionized the travel management space, a technology solution also becomes the core of a meetings management program and facilitates integration. Not only do these tools house policy parameters and compliance checks, they also push out process prompts whether related to approvals and sourcing or going further into detailed planning logistics and attendee management. When considering a meetings management technology tool, look for the following capabilities: Approval trafficking Meetings budgeting tools Electronic RFP facilitation Process controls Attendee management tools (online registration, pre- and post-event survey tools) Integration with corporate payment cards and automatic expense data feed (see Payment Solutions sidebar, page 8) Data reporting and tracking The most advanced tools in the market have begun to integrate with GDS providers so that meeting attendees can link to a corporation s online booking tools directly from attendee registration sites. This type of partnership allows companies to control compliance to travel policy even as employees are directed to the meeting room block. This has been an ongoing challenge for many corporations, and the newest developments are facilitating more advanced integration possibilities. PROMEDIA.TRAVEL/WWW.PROMEDIA.TRAVEL 9

Integrating Corporate Travel, Procurement and Meetings Management meeting space for the corporation s needs? Or, on the meetings side, should a meeting destination be moved to make better use of current preferred travel suppliers? In an integration effort, all sourcing and contracting should be viewed with the goal of aligning meetings and travel to achieve the most effective spend management overall. Organizations must look at how both travel and meetings needs can affect preferred supplier scenarios and decide how best to fit the pieces together to achieve cost savings while preserving service levels. Technology tools can prompt and traffic approvals among different divisions, driving process automatically and collecting consistent meetings data along the way. DATA INTEGRATION AND RETURN ON INVESTMENT Measuring return on investment for meetings-travel integration often happens on two levels. If an organization has not been managing meetings strategically, the first returns are likely to result from the initial meetings management push. StarCite s McNairy presented the following statistics during a recent webinar to help guide savings expectations: MANAGEMENT TACTICS SAVINGS Process Automation 3% to 6.5% Policy Compliance 1.6% to 5% HOW AND WHY Likely to result from productivity increases, including reduced time spent on managing logistics and reduced outsourcing costs. Can result from avoiding penalties and fines associated with SOX, reducing perks and gifts, and reducing risk via standardized terms and conditions. Strategic Sourcing 4.8% to 8% Achievable through increased leverage with suppliers, reduced agency commissions, and use of preferred suppliers. Visibility 2.4% to 5.5% Possible through demand management, budget compliance, and avoiding penalties associated with attrition and cancellation. 10 PROMEDIA.TRAVEL/WWW.PROMEDIA.TRAVEL

The second layer of savings comes from leveraging new data with suppliers. Combined business intelligence from meetings and travel gives corporations the ability to increase their percent discounts with airlines and receive better preferred rates with hotels and car rental or ground transportation companies. Organizations should also look at how capturing additional travel spend influences soft dollar programs and rebates garnered from corporate card usage. All of these areas represent savings opportunities, and as more companies integrate, actionable benchmarking data will become available. STRATEGIC MEETINGS MANAGEMENT IS A CONTINUOUS DISCIPLINE Maintaining an integrated travel and meetings management program is an ongoing effort. Executive involvement is a must not only at the beginning of the process but also to support changes that are made along the way. Travel managers know that as market conditions shift, travel policies, class-of-service requirements, supplier management techniques and market share must be continuously refined. With an integrated program, the same goes for meetings, and the market drivers can be different for that segment. The key to creating the most effective program is to balance the needs of both sides of the travelmeetings equation, to leverage the expertise of procurement and to keep lines of communication open among stakeholders. Each side will need to compromise, work to minimize flaws and differences in the program parameters and concentrate on higher level enterprise goals to find creative pathways to success. Executive involvement is a must not only at the beginning of an integration effort but also to support changes made along the way. BEST PRACTICE Standardized Sourcing Processes and Approvals When defining sourcing strategies, stakeholders must work together to standardize processes. Whether planners work directly through a meetings management tool, complete a meetings registration and approval form or submit a request through a preferred third-party partner, process is key to identifying the best supplier options and collecting consistent data for each meeting. On the flip side, stakeholders must also work hard to ensure that the process moves quickly and does not encumber the planner. Sourcing processes that move slowly put the corporation at a significant disadvantage when it comes to getting the right supplier and the best rates. PROMEDIA.TRAVEL/WWW.PROMEDIA.TRAVEL 11

Integrating Corporate Travel, Procurement and Meetings Management About StarCite, Inc, StarCite, Inc. is the largest on-demand global meetings management company in the $300 billion global marketplace for corporate meetings and events. Processing more than 3 million attendee registrations a year and delivering over $7.5 billion in revenue opportunities annually to meetings suppliers, StarCite brings together buyers and suppliers of meetings-related services on an unprecedented scale; delivering value through world-class technology and services to both audiences. For more information, visit www.starcite.com About ProMedia.travel LLC ProMedia.travel LLC is an integrated media company serving the information needs of the managed travel and meetings marketplace. ProMedia.travel publishes Procurement.travel, Management.travel, TheTransnational.travel and TheBeat.travel. The company s Content Solutions department effectively delivers sponsored content to targeted communities of travel professionals via e-newsletters, white papers, webinars, supplements and other vehicles. For more information, visit www.promedia.travel SPONSORED BY