European companies lag far behind those in America in making savings on their MICE budget.
Experts like Todd Kramer, Carlson Wagonlit Travel's vp events EMEA, believe that as many as 40% of companies here do not know how much they spend each year on meetings while considerably fewer - and it is just a handful - have any sort of programme to capture, analyse and control spend.
In the US, companies are far more alert to the potential savings and many have initiated a Strategic Meetings Management Programme (SMMP). Although attitudes vary widely, a recent survey by the National Business Travel Association (NBTA) found that more and more travel managerrs are getting involved in meetings planning with 40.6% having responsibility for meetings.
A further 12.3% expected to be managing meetings with two years – more than half of travel managers. Another finding was that US companies with branches in Europe planned to extend their SMMPs here also within two years.
One company which as already done that is Cisco, the Californian-based IT and communications company. Michele Snock, global travel manager, told BTE that the strategic meetings prgramme was first introduced into the US in 1998, followed by Europe in 200 and, more recently, the Asia Pacific Japan region. Next on the horizon, Ms Snock said, were the emerging markets of Eastern Europe, Latin America and the Middle East.
She said the main aims of the SMMP were: "Negotiated cost savings by leveraging preferred suppliers, cost avoidance, maximum productivity through processes, risk mitigation and ensuring visibility to all meeting spend prior to financial or contractual commitments."
Each of Cisco's three main locations, the US, Europe and Singapore has a full time staff of contractors that are in-house meeting planners and each will handle four to 40 meetings a quarter, depending on their size.
Most are quite small with 80% having fewer than 100 attendees and the bulk is internal but over 2006, the planners dealt with 1,400 meetings. This amounted to more than $40m meetings spend by Cisco's various departments.
The savings made through the SMMP are substantial. Ms Snock said: "We feel we affect the bottom line by saving $5m over and above our overhead expenses."
That maybe the major benefit but it is not the only one. Ms Snock added: "Influenced (managed) spend ensures we are maximising the money spent on meetings throughout the enterprise.
"Also, all meetings have a consistent look and feel which is important for internally branding our company to its employees and are professionally handled. As we are the experts, we save other people within the company, who do not manage meetings day in and day out, a lot of valuable time."
How the SMMP works is that when a department needs a meeting organised, it approaches Ms Snock's colleagues who then, having got the details, like the location, size, duration and bed nights, send out three RFPs online via StarCite. They then chose the reply which offers best value.
The meeting is booked and all internal flights are booked to comply with Cisco's global travel policy on which airlines are to be used. Again this maximises spend with partner airlines and so increases leverage when negotiations come round.
It has taken Cisco nearly nine years to get this far and the programme is still not fully implemented in that other locations in emerging markets have yet to be embraced. But the savings are substantial, meetings are organised more quickly and more professionally which is also money saving, they have a similar feel and in negotiations with hotels and airlines, Cisco has increased leverage.
Mr Kramer believes that travel or procurement departments are unlikely ever to get full control over a company's entire MICE budget but that it is possible to get control over perhaps half. So with a company with an annual MICE spend of €100m, €50m might be managed and thus yield savings of around €6m which seems worth achieving.
But he noted that progress in Europe was slow and that the crucial element of senior management backing is often conspicuously lacking.
Perhaps when more American companies start to implement their SMMP here and begin to make big savings, home grown European companies will start to take note.
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