I see this week's ISM event as being part of a recent increase in interest about the procurement of services. I’ve worked in this category and it is truly a beast all its own. They mentioned visibility in their event description, and although that is a common enough concept in procurement it is the whole deal with meetings spend. While all services projects are complicated due to the relationships in place, addressing meetings spend has its own sensitivities. Not only is it a relationship-heavy category, but the times when meetings need to be managed are usually of high importance and high visibility.
Category: Meetings Spend (considered a complex service)
Risk profile: intangibles such as corporate image
The following “Stages of Maturity” were defined early in the event for use when defining the current state of your meetings spend management:
Individualized - Meeting owners engage support as needed
Consolidated - Support offered to meeting owners, adoption varies
Strategic - Enterprise approach to meetings; meeting owner behavior directed
Optimized - Continuous improvement in the meetings program
The lead speaker on the event was Karen Lynch, Global Lead for Meetings and Events for Johnson Controls. When she joined the group, their meeting program was individualized based on the maturity stages above. There were four business units operating independently, using various pricing models and not managing terms (such as cancellation policies) well.
Ms. Lynch started building executive support for her program by gathering and data on ‘in flight’ meetings rather than historical spend data. Although this required bandwidth to collect and process the meetings currently being planned in the organization, the message is more current and encouraged her executive board to take action because they saw they could have a tangible impact in the short run.
In order to get meeting planners to work well with procurement, it is important to set role expectations and to explain how you will separate the spend management process from the planning process. Helping meeting planners switch from P.O.s to Purchasing cards was a win for everyone, as long as someone was managing the cards to be sure they were issued and closed appropriately. In order to manage policy compliance, it was also important to define a “meeting”. In Johnson Controls’ case a meeting is tem or more people requiring a hotel contract. At other companies there is a spend threshold that must be met before a meeting is truly a “meeting”.
Security quickly became a large lever for Ms. Lynch. The company did not know what meetings were happening where, and who was in attendance at any given time. If there were to be an emergency or a natural disaster, they did not have a centralized record of meetings and specific locations to follow up on.
Some additional take-aways and lessons learned:
- Find out what departments are responsible for most of the meetings spend
- Get at least one specific sponsor in the C-suite
- Engage the Legal department as a way of increasing compliance through managing contracts that may or may not have favorable terms
- Rationalize the supply base and work with one or two preferred vendors (although Johnson Controls did find that with the right approval process it was sometimes necessary to allow individual RFPs to be issued)
- Have a second tier of properties already identified and qualified in case there is a scheduling conflict with preferred or first tier suppliers
- When possible, merge meeting nights with ‘transient’ (or non-meetings travel) hotel usage
Johnson Controls is a global diversified technology and industrial leader serving customers in more than 150 countries. Our 162,000 employees create quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and advanced batteries for hybrid and electric vehicles; and interior systems for automobiles. Our commitment to sustainability dates back to our roots in 1885, with the invention of the first electric room thermostat. Through our growth strategies and by increasing market share we are committed to delivering value to shareholders and making our customers successful.
Founded in 1915, the Institute for Supply Management™ (ISM) is the largest supply management association in the world as well as one of the most respected. ISM’s mission is to lead the supply management profession through its standards of excellence, research, promotional activities, and education. ISM’s membership base includes more than 34,000 supply management professionals with a network of domestic and international affiliated associations. ISM is a not-for-profit association that provides opportunities for the promotion of the profession and the expansion of professional skills and knowledge.