Meeting Effects
Is Company-Wide Procurement Working?
Author: Alan L. Kleinfeld, CMP
From ' The Meeting Professional ', April 2008
If you like to shop, then you probably do your own buying. When you hit the fashionables department at Macy’s, Neiman Marcus or Nordstrom, you do the price comparison and inspection. When you find what you are looking for, it’s you who whips out the credit card and signs on the dotted line. You are your very own procurement officer.
However, this is rarely the case at the office. In the corporate environment, company purchases are rarely that simple. Having a single department to purchase pens, paper clips, coffee filters, equipment and other supplies for the entire office isn’t a new concept. To see savings through purchasing power, it makes sense to have one entity buy the materials it takes to run a business.
What began as a way to procure necessary supplies has found a natural progression toward buying other big-spend items. And meetings are big-money items, indeed. The trend toward partnering procurement and meetings is picking up speed if not necessarily gaining popularity.
Although some on the meetings end might be resistant to working with procurement, there are significant organization-wide advantages when the two form a working partnership.
Sharon Marsh, CMP, CMM, program sourcing manager for meetings and events for VeriSign, suggests meeting planners look at all the stakeholders to get an idea of how people can add value, save money and limit liability.
Once you start collaborating to make good strategic plans, you can support one another, focus on strengths to make more money for the company and provide better service and meetings for the end user.”
In procurement, Marsh is now able to track spending and leverage it to negotiate cost savings without adversely affecting meetings and events.
That, coupled with better risk management and reduced liability, is prime procurement return on investment (ROI).
At Maritz Travel, the trend is similar.
“Meeting planners [have come] to recognize the value of procurement and the expertise they bring to supplier negotiations and contracting,” said Cindy D’Aoust, senior vice president of strategic meeting management for Martiz Travel Management Company. “The first step is to understand the spending. Who do you spend with? Understand what you are paying for and to whom,” D’Aoust said. “Second, try to mitigate risk for cancellation.
“We absolutely see [ROI],” D’Aoust said. “We have guarantees to clients. We’re accountable. We see attrition savings. We have specified scorecard measurements of financials. It’s not just savings; we see it also on the risk management end.”
Although the concept of procurement is widely accepted, it’s not necessarily an easy transition for meeting planners to work with procurement.
Resistance or Confusion?
Resistance to procurement varies from organization to organization. Dave Scypinski, senior vice president of industry relations for Starwood Hotels and Resorts Worldwide Inc., says this resistance isn’t just an issue within a corporation’s meeting department—
idows: 0; orphans: 0">he’s witnessed resistance on the customer side as the position of revenue manager has become more common, replacing the authority that the director of sales once controlled.
What was once the job of the director of sales is now the role played by the revenue manager. That’s the person behind the curtain making the call, the procurement officer behind the corporate curtain,” Scypinski said.
From the hotel side, there’s some resistance to the change too, especially for those not familiar with procurement policies.
If you do understand the process, you still have to react to it,” Scypinski said. “You have to ask yourself, 'Do I talk to the meeting professional or the procurement department?’ It sometimes feels like a good cop/bad cop approach.”
In either case, the functions of revenue manager and procurement officer are the same: to help their sides get the best deal.
The negative is that if you’re sitting on the other side of the fence, it can become confrontational and more time consuming,” Scypinski said. He can also explain why both planners and suppliers would want to partner with procurement.
[Procurement departments] know shortcuts and hold significant buying power.”
As far as hotels go, he says it’s a seller’s market.
There’s less hotel space than there are meeting planners who want it. That is exactly why the revenue manager has become a greater force in buying and selling hotel space. Plus, we see streamlined costs and find better savings and increased revenue.”
To put it in another light: Do you remember the last time you bought a car? You saw the sticker price and offered something less. The salesperson seemed pleased with it and then said, “I need to get my sales manager to OK this.” Thus began a waltz wherein the dealership’s procurement officer/revenue manager (the salesperson or the sales manager, depending on whether or not the back-and-forth game is genuine) made sure the company didn’t give away the farm.
An Arranged Marriage
Regardless of any opposition meeting planners may have, Scypinski, like D’Aoust and Marsh, agrees to the eventuality of the procurement-planning love affair.
Corporations are going to continue to look to streamline costs while trying not to lose effectiveness and efficiency. The goal is to get the entire company to find things cheaper,” he said.
Besty Bondurant, CMP, CMM, president, Bondurant Consulting, specializes in the development of strategic meeting management programs for corporations and sees planner resistance, but believes the partnership is destined.
Without a doubt, most strategic meeting management programs are getting their arms around meeting spending because the entire corporation is soon going to require that meetings get involved with procurement,” she said. “There are many positive examples where procurement and meetings collaborate for the overall good of the organization. That being said, I still think there are meeting planners out there who will oppose it because they’ve heard from other planners that they had a bad experience with procurement.”
Bondurant, a 30-year meetings community vet, says that the success of the partnership depends on the bond that’s formed between procurement and meetings to see who makes that decision.
I’ve seen some instances in the corporate environment where they bring a meeting expert into procurement because it’s easier to teach the ABCs of procurement than teach the nuances of meeting planning to a procurement person,” Bondurant said. “That’s where people seem to see the most success. Where it benefits meetings is where you have people in procurement that come from the meetings industry, or they really embrace and seek to partner with the meeting planner group and want that understanding and knowledge.”
Although many corporations have embraced the partnership between procurement and meetings, many associations have not yet glommed onto the benefits. That’s not the case at AARP. Its procurement department works closely with meeting staff and has been for more than three years. By all accounts, it seems to be working.
We work hand-in-hand with our meetings staff,” said George Santoro, vice president of procurement and contract management for AARP. “We’re responsible for negotiating all of the agreements, processing RFPs and coordinating contracts; event staff continues to do programming and planning. We have our role to play and the meeting planners have their roles and we respect each others’ skill sets.”
Although AARP has no plans to add a meeting planner to its procurement staff as some corporations have done, Santoro says the association sees significant savings and ROI as well as data tracking on spending.
According to Marsh, the key is to know what procurement can do better than you and to know what you can do better than procurement.
Then sell your strengths and buy their strengths. The key is the collaborative partnership. No one owns anything. You all work together for a successful outcome for the larger organization, which will ultimately reflect positively on you and your area of responsibility.”
A Different Tomorrow
If you are a planner and you’re not convinced about the benefits or eventuality of this partnership with procurement and meetings, you may find a rough road ahead.
It’s a mindset that needs to change,” D’Aoust said. “Everywhere we look things are changing and evolving and we’re not going to continue business the way we have.”
With four or five generations currently in the workplace, how will you ensure your message is heard by all if you deliver it in an outdated manner? If you are a planner not willing or able to grow and show your value, you will fulfill your own prophecy,” D’Aoust said, noting that this is not specific to meeting planners. Regardless of position, what you do tomorrow will be different than what you do today. TMP
ALAN L. KLEINFELD, CMP, is principal of MET-C Meeting Management, providing solutions for meeting, travel and concierge needs, based in Washington, D.C. He can be reached at alan@met-c.com.
SIDEBAR 1
I Want a Successful Procurement-Meetings Marriage!”
To move your company in the right direction, follow the advice of Sharon Marsh, CMP, CMM, program sourcing manager for meetings and events for VeriSign, and make the first move.
Don’t wait for procurement to come to you. Go to them first.
Clearly understand and be able to describe the strengths and weaknesses of the meeting planning arena.
Clearly understand the strengths and weaknesses of stakeholders.
Have procurement explain its strengths and weaknesses.
Understand that the collaboration supports and strengthens both ends.
Be eager about a collaborative partnership that will benefit the organization.