Post on 03-Jun-2020
Business Solutions Group
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SMMP INDUSTRY
UPDATES & MCAFEE
CASE STUDY
Susan Dupart Kevin Iwamoto, GLP & GTP
Senior Director, VP Industry Strategy
Global Travel, Meetings,
Corporate Card & Mobility
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WHAT WILL WE TALK ABOUT TODAY?
• Meeting trends and forecast
• Why are companies focusing on meetings?
• Strategic Meetings Management Case Study - McAfee
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TOP TRENDS FOR 2013
Consolidation
• Growing consolidation of Business Travel and M&E spend to negotiate better deals
• Increase in consolidated M&E policy for greater savings and risk mitigation/Duty of Care
Savings & Compliance
• Driving air and ground transportation savings is travel managers’ top priority for 2013
• Improved communications on policy – Travel 2.0?
• Optimizing hotel spend by mandating the use of preferred hotels
Source: CWT Travel Management Institute
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Business Solutions
48% of corporate T&E and meeting pros say their firms’
procurement departments are involved in meeting
management.
Corporate Meetings & Event industry was approximately
$360 billion in 2010
Meetings represent 9% of the average organization’s total
budget
36% of companies have strategic meetings management
programs in the US.
1-Business Travel News, the "2012 Strategic Meetings Management Study," 2 - CWT Travel Management Institute 2010, 3 - Strategic Meetings
Management: A Handbook of Emerging Strategies for the Next Generation of Meetings and Events Management, Aberdeen Group 2012, 4 - 1-Business
Travel News, the "2012 Strategic Meetings Management Study
THE MEETINGS INDUSTRY: A BIG INDIRECT SPEND CATEGORY
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INDUSTRY PRESSURES
Data & buying fragmentation for buyers, revenue streams and distribution channel changes for suppliers
Continued pressures on outsourcing travel and meetings
Economy & the price of fuel
Rapid advancement of social media and technology
New and younger workforce and ways to transact business and communicate
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TRENDS & FORECAST FOR MEETINGS & EVENTS
RFP volume and bookings accelerating
Shorter booking windows – planning taking place in a tighter window
Risk Mitigation More Crucial
Suppliers are being selective and exerting more control
Social, Virtual & Mobile Transforming Event Management
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Fees
• Carry-on bags
• Checked bags
• Overweight bags
• Snacks
• Blankets
• Seat upgrades
• Premium seating
• Wifi
CHALLENGE: ANCILLARY FEES GROW
Airline Example:
$36.1B Projected in 2012
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Fees* • Early check-in
• Mini-bar restocking
Fitness center
• In-room safe
• Luggage storage
• Energy surcharge
• Valet parking
• Porterage
• Resort
• Internet & phone
CHALLENGE: FEES GROW
Hotel Example:
$1.95B projected in 2012
“Most fees and surcharges have incremental profitability of 80 to 90 percent or more.” – Bjorn Hanson
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North America 4% rise in avg.
meeting size
6.5% hike in
per-day attendee
cost.
CHALLENGE: UNEVEN GLOBAL MEETINGS
FORECAST
3% decline in avg. meeting size
6% drop in per-day attendee cost.
EMEA
Source: Carlson Wagonlit Business Travel Forecast
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STRATEGIC MEETINGS MANAGEMENT
policy process
control people
Strategic Meetings Management (SMM) is a disciplined approach to managing
enterprise wide meeting and event activities, processes, suppliers and data.
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SMMP – REGISTRATION/APPROVAL OF MEETING
Supplier advantages: Highly qualified
meeting proposals Corporate gains: Company-wide
visibility via central calendar
Annual savings ranging from 1.6% - 3.9%
Approval workflow
audit trail (i.e. SOX) Annual savings ranging
from 1.2% - 2.8%
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Supplier advantages: Automated lead response Leads reach right person Integration with CRM system Preferred supplier programs Corporate gains: Driving preferred supplier
usage Improved leverage from total
spend accuracy for negotiating rates
Annual savings ranging from 8.6% - 13.8%
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SMMP – SOURCING / PROCUREMENT
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Supplier advantages: Automated room lists Corporate gains: Quality of event Improved marketing of
event and sessions Automation of many
manual tasks Annual savings ranging
from 1.1% - 3.2%
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SMMP – PLANNING / EXECUTION
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SMMP – PAYMENT / EXPENSE RECONCILIATION
Supplier advantages: Fast payment Reduction in billing
and invoicing costs Corporate gains: Integration to financial
systems Separate real time
meetings and T&E spend analysis
Annual savings ranging from 0.3% - 1.1%
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COMPONENTS OF MEETING CARD
PROGRAM
One card issued per meeting
Declining balance card or monthly card limits can be set based on estimates
of the highest expected amount of monthly charges
Can be used to pay all suppliers, including hotels, ground transportation,
signage, restaurants, on-site fees, etc.
Can be opened early to pay for deposits and closed after all event invoices
have been paid
Transactions can be reviewed and approved on-line within three days
Transactions can be reallocated to other cost centers within the same
country
AP pays the card balance directly and internally bills designated cost center.
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PAYMENT METHOD COMPARISON
Meeting Card Program Purchase Order
Can be opened and ready to accept charges within 7-10 days
Standard payment terms for paying suppliers is 45 days
One meeting card can pay many different vendors
Traditional PO process requires separate PO be opened for each vendor
No minimum transaction amount Minimum PO transaction amount
Reduces number of payments AP processes—one payment to card company per month for all transactions
AP processes separate payments for each vendor
Suppliers who accept corporate card will already be set up in payment system
Supplier must register and submit tax documents in order to be added to company’s payment system
Reduced internal processes Multiple approvals required
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PAYMENT METHOD COMPARISONS -
CONT.
Meeting Card Program Corporate Purchasing Card
Can be used for traditional meeting vendors such as entertainments, florists, etc.
Many traditional meeting vendors are blocked on individual CPC cards
Limits are determined by each meeting’s unique budget
Individual CPC cards may not have a high enough limit for traditional meeting expenses
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SMMP – DATA ANALYSIS / REPORTING
Supplier advantages: Evaluate market share Compete and optimize
lead management Corporate gains: Central reporting
database and dashboards
Real time enterprise-wide accuracy
Annual savings ranging from 0.5% - 1.3%
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Technology connects all the puzzle pieces: Automation
Delivers efficiencies
Drives common standards
Sourcing Mature, consolidated marketplace
Automates processes
Centralizes data
Visibility Improves visibility to meeting activity
Reduces/eliminates paperwork
Compliance Supports/enables pre approval
Reporting capabilities from the meeting level to the enterprise level
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SMMP – TECHNOLOGY
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COST SAVINGS EXAMPLE CompanyTraining Summit - $4,188.92 / 8.48%
Reasons for lower than average cost savings
Peak season in Ocean City, MD
Rooms currently going at rack rate of over $300 so hotel would not lower group rate at all from
first quote
Most hotels in Ocean City won’t take groups during peak season
Risk Management Items We Were Able to Secure
· Better Cancellation Clause
· Better Attrition Clause
· Resell Clause
· Rebooking Clause (100% of cancellation/attrition fees can be used for another
program within 12 months)
· Rights of Termination (Force Majeure)
· Insurance/Indemnification
· Overbooking
· Hotel Cancellation
· Renovation/Construction
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CENTRAL RESOURCE – BETTER VISIBILITY
Start with “Sourcing Only” option – full service would be available
Employee owns meeting content and management of program
Visibility to cancelled programs and cancellation penalties
Centralization provides ability to re-use cancelled space
Cancellation of 2 programs within two weeks = $46K
⁃ Advisory Council
⁃ PM Leadership Offsite
Master Calendar
Provides pipeline visibility into future meetings and events to ensure no overlap
Proactive vs. reactive for strategic decisions (cost reductions)
Provides visibility to global events (APAC Kickoff)
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HOW DID MCAFEE SUCCEED? Creation of Global Governance Team
Executive Finance VP’s from all Geo’s
Meet quarterly to propose new initiatives
Global Travel Dashboard
Pulls travel data from AX, expense reports, SAP, Hyperion, providing better
travel data
SMMP
⁃ Identified cost savings, better global visibility
⁃ Definition of “Meeting”
⁃ Creation of Global Meeting Policy with approval guidelines while ensuring
cultural/Geo specific’s
⁃ Creation of meeting contract template to ensure McAfee required T&C’s are
included prior to final negotiations
⁃ Develop easier payment vehicle, reducing Sourcing and AP processing time
⁃ Phased rollout plan
Level 1 Level 2 Level 3
Service Level Description
• Maximum 3 properties sourced
• Standard availability report
• No space mapping
• 25 room nights or less
• Maximum of 2 meeting rooms
• Contract negotiation / client consultation
• Close and final turn over package
• Maximum 6 properties sourced
• Standard availability report
• Space mapping for one property
• 26-100 room nights
• Maximum of 4 meeting rooms
• Contract negotiation / client consultation
• Close and final turn over package
• Maximum 9 properties sourced
• Standard availability report
• Space mapping for up to 3 properties
• 101-175 room nights
• Maximum of 5 meeting rooms
• Contract negotiation / client consultation
• Close and final turn over package
Fee (per meeting)
Note: The meeting level is the highest level based on any one of the specifications. For example, if room nights are less than 25 but meeting rooms are greater than two, then Level 2 would apply. Hotel Commissions: Room rates will be negotiated commissionable and will be applied as “net off master” as a credit on the master hotel bill.
Sourcing & Contracting Service Levels and Pricing
Meetings Services
Services provided by
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Level 4 Level 5 Level 6
Service Level Description
• Maximum 12 properties sourced
• Standard availability report
• Space mapping for up to 3 properties
• 176-250 room nights
• Meeting rooms as required
• Contract negotiation / client consultation
• Close and final turn over package
• Maximum 12-15 properties sourced
• Standard availability report
• Space mapping for up to 3 properties
• 251-499 room nights
• Meeting rooms as required
• Contract negotiation / client consultation
• Close and final turn over package
• Maximum 15-20 properties sourced
• Standard availability report
• Space mapping for up to 5 properties
• 500+ room nights
• Meeting rooms as required
• Contract negotiation / client consultation
• Close and final turn over package
Fee (per meeting)
Billing: Once the venue contract is turned over to the McAfee meeting owner, the meeting owner is responsible for all vendor payments directly. Fees noted above will be billed directly to the meeting owners upon completion of the sourcing work.
Cancellation Fees: In the event any program or request is cancelled prior to contracting, a cancellation fee of $250 for Levels 1-4 and a $500 fee for Levels 5 and 6 will apply. If the meeting or event is cancelled after being contracted, the full sourcing transaction fee for the designated level is still applicable.
Sourcing & Contracting Service Levels and Pricing
Meetings Services
Services provided by
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QUESTIONS?