Corporate spend on meetings are in the crosshairs of the diligent corporate travel manager. Having tackled the procurement and control of corporate travel and entertainment, attention is now moving to identify the scattered spend on meetings within large companies and to develop policies which capture and control costs.

Traditional modus operandi which allowed individual decisions to be made about meetings by sales and marketing departments or executive assistants are set to tumble.

“The industry has allowed the MICE and travel spend to be separated,” said Virginia Fitzpatrick from TMS Travel Management Solutions.

“But procurement sees it as one spend. It sees the opportunity to grab it and it won’t let go.”
A forum participant added “it is easier to save a dollar than spend one”, and saw meetings as the next target to control costs.

They are not talking small bickies. Mario Kalogiannis from Epago Group estimated that the total cost of meetings and events within companies is 20 per cent more than the total cost of air travel. Les Galbraith from Travel Edge illustrated the point: “If $80 billion is spent globally on corporate travel, then [it is] estimated a further $100 billion is spent on M&E (meetings and events).”

Others saw the figure of around 60 per cent of the total air spend. While percentages varied, the forum agreed that the largely hidden spend on meetings and events within many companies represents millions of dollars.
“Some are too scared to open this Pandora’s Box,” said Aileen London from Oracle Australia.

“There are internal politics involved, with those currently handling meetings and events clutching ownership tightly. Most companies don’t know their total M&E spend.”

One large corporate in the audience admitted they hadn’t yet identified the total spend.

But change is coming. “T&E (travel and entertainment) is recognised as the second largest controllable expense within a company,” Galbraith said.

“If M&E is the same or more, then it is time now to have that discussion with the company’s CFO. M&E is where T&E was back in the 1980s” when moves were made to consolidated scattered corporate travel spend.
Travel management companies have been wising up fast and moving into this specialist area, creating divisions which handle this work for their clients.

Bought to the attention of the CFO, the next step is to transfer M&E spend into procurement. But it was recognised that a collaborative approach was the preferred method, allowing procurement to assist staff with negotiations and handle contracts. Mandated policies are the extreme option. Good procurement needs to engage with other departments on desired outcomes.

Once the company realises the risk associated with untrained personnel signing venue contracts on their behalf (and a couple of ugly war stories were given), then the rest is history.

“The PA mafia don’t realise the potential company exposure both legally and financially”, a participant observed. Taking away signing authority was one easy method. One participant said their company policy reduced signing authorities to only two people.

Some companies are well down the track already. The Oracle Australia panellist said even in the case of marketing personnel exhibiting at a trade show, which could run to $20,000, procurement has to check the contracts and approve the spend. Policies cannot only cover the company’s own meetings and events, but attendance at external events.

Forum speaker Mario Kalogiannis acknowledged it was a big task. He recalled his former position with a major bank where efforts to extract M&E data identified some 3000 suppliers. Venues were the obvious ones, but there were many more involved, such as audio-visual companies. But it was not just about procurement: “never mind who owns it, why isn’t it being managed? Events are being held in silos within the company. Someone should be asking for forward load for the next six months for example.”

Kenneth Phua from ACTE saw other factors, recognising that many company events were migrating over to the corporate communications departments which were more concerned to look at the business objectives rather than just procurement and cost control issues.

Cookie cutter transactional meetings suited procurement more so that the “emotive” events suggested one participant. Not so came the quick response from procurement: all M&E can benefit from procurement looking at quotes, improving on them with negotiation, and ensuring best deals are being secured from preferred suppliers.

Where’s the role of the PCO in all this came the feint cry? Galbraith said there is definitely a role for the specialist. His firm, TravelEdge, has an event management unit, but also works with outside expertise.
“Some PCOs are outstanding on creative and execution, but there will be a consolidation of supply. The outcome will be more professional and accountable.”

This forum was in no doubt that there is a huge untapped opportunity to leverage the M&E spend in most companies. This will certainly see more in-house travel managers moving into this territory, and more corporate travel management firms expanding their reach to manage meetings and events.
Look behind you; that high-speed train is definitely coming down the track.

For further information on the Association of Corporate Travel Executives visit www.acte.org.

phili.sunshine@aon.com.au">





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