Strategic Meetings Management
A few simple steps can help you save on the bottom line. —By Betsy Bondurant, CMM, CTE
W
E’VE HEARD THE TERM STRATEGIC meetings management (SMM) for many years now, but what exactly is it? Simply put, SMM brings order and control to an organization’s meeting and event expenditures—what the
industry calls spend. Knowing who is planning meetings throughout the company and what is being spent can lead to a signifi cant reduction in ineffi ciencies, risk, and cost. In fact, typical cost savings during the fi rst year of SMM implementation range from 10 to 20 percent.
WHO DOES WHAT? Experience tells us that many different entities throughout an or- ganization plan meetings and events. Most often, there’s a formal meeting-planning department. But a large volume of meetings is also handled by “occasional planners”—executive assistants, administrative coordinators, and project managers. In addition, many companies have “power planners,” people outside the offi cial planning group who spend most of their time planning meetings and events. These multiple points of purchase raise some issues of concern:
• The organization’s limited insight into who is spending what leaves everyone unable to leverage the overall spend.
• Prices negotiated by anyone other than meeting specialists may result in higher costs than necessary.
• Terms of the contracts, such as a high attrition penalty or lack of a rebooking clause, may favor the hotels and other suppliers over the company or association.
MONEY IN MOTION By developing an SMM program, organizations can see where the money goes and leverage the total while reducing risk.
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Historically, large companies (those with annual revenues of more than $1 billion) have been the fi rst to embrace SMM, partly because these programs align so nicely with their procure- ment objectives. However, SMM is currently gaining traction with associa- tions and small- to medium-sized companies (those with annual revenues of less than $50 million and $1 billion respectively). They, too, see the benefi t of instituting best practices to save money on meeting and event services. Still, meetings and events remain one of the last areas of unmanaged cost in most organizations. Through strategic management, companies can realize signifi cant savings. For example, depending on the size of the business, a company could save $4 to $14 million. Even if a company reduced the current cost by just ten percent through SMM, it would see a savings of $400,000 from a previous $4 million spend or $1.4 million from a previous $14 million. Based on these potential savings, wouldn’t it be great if you
were to suggest an SMM program for your organization? No doubt you would be seen as an even more valuable asset to your employer. In fact, I have seen many instances where the person who led the charge for SMM received a promotion because of their proactive approach to saving resources and reducing risk.
STATE YOUR CASE With no centralized process in place for sourcing and contracting meetings, how can you quantify the potential meeting and event savings? Start by estimating the amount your company spends on meetings and events. Typically that means:
• 2% to 3% of total company revenue • 25% to 30% of total travel and entertainment spend • 60% of corporate air volume
www.elitemeetings.com
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