Although SMMPs were launched around 2004, the initiative
only really began to pick up momentum in the UK during the recession when
senior corporate managers became increasingly aware of the need for meetings
and events to demonstrate productivity, savings, risk reduction and return on
investment (ROI).
The SMMP is not just a knee jerk reaction to the recession, but a strategic
game changer. Gone are the days when venue sourcing was largely a matter of
budget and location. Now factors such
as health and safety, whether a supplier is financially stable, and what a
supplier’s environmental impact is, are vitally important.
A carefully planned and implemented SMMP can save over 10 per cent in
expenditure on meetings and add meeting value, according to research business
intelligence specialists, the Aberdeen Group and also by venue and meeting
planning agency Meeting Sites Resources (MSR) in the United States.
There is no magic wand to SMMP and Global Supply Chain Director at EventCom
Grass Roots, Alan Newton, stresses it is a discipline requiring expertise and a
phased approach.
“There are typically multiple variables and design of such programmes must be
tailored to an organisation’s needs,” says Newton.
Whether a company actually knows what its needs are is another issue, it seems.
Those in charge of producing events tend to be creative types and can be
resistant to anything that smacks of procurement practice.
“Booking hotels and venue space for meetings and events can be a very emotive decision,”
says Newton, pointing out that emotional decisions rarely translate into what
is best for an event or its objectives.
Procurement departments have long been involved in travel management but have
not traditionally turned their full attention towards meeting and event spend.
Setting up an SMMP, Newton believes, is about finding a balance between using
purchasing principles wisely, alongside an understanding of the internal
strategic messages of the company, while not ignoring the value proposition
within venue selection. SMMPs also need a champion in any organisation. But,
why even consider one in the first place?
Compelling industry statistics underpin the need for change, according to
Jennifer Brown, President of MSR, who presented US data at the AIBTM show in
Baltimore in June which claimed:
Over 50% of CEOs feel their organisation is not getting
maximum ROI from their meetings and events
Over 40% of s are not satisfied with their company’s
travel/meetings spend management
49% of planners feel pressure to enhance meeting results,
measurable metrics and ROI
So, where to start? Firstly, get a handle on your business
and understand how your organisation works, is Newton’s founding law of SMMP.
“Procurement departments need to understand the value of meetings and
objectives and this is where an initial process of collating data is
invaluable,” he says, adding that understanding and communication are
fundamental to ensuring you take all stakeholders with you on the SMMP journey.
“You will need patience, as the SMMP will have to go through various phases of
maturity,” says Brown, who points out another first step is to evaluate the
size and scope of existing meeting and event activity.
“Determine how meetings and events can help achieve stated goals and
objectives,” Brown adds.
Any such list would typically include increased team productivity, added
meeting value, cost savings, risk reduction and attendee experience/learning.
If drawing up an SMMP, you may wish to draw up your own contracts for venues,
which could include value added concessions, hotel fees and surcharges
(eliminated or reduced), permance clauses and legal liability definitions.
Once your negotiated contract is countersigned, you can prepare a cost savings/risk
reduction report for each meeting and distribute to senior management and
stakeholders.
Newton advises SMMP champions to be aware that events teams and individuals can
too easily be influenced by subjective thinking and relationships with favourite
venues to the detriment of thinking about broader principles.
Likewise, a big criticism of procurement practices revolves around
commoditisation of services.
Clearly there are many more variables involved in executing a meeting than
buying a bedroom.
Incorporating SMM technology that can provide 24/7 access to all current and
past meeting activity, including management and financial reports, is another
step to being able to deliver specific metrics that define, measure, benchmark
and report results to senior management.
The goal to keep in mind is ongoing validation of real meeting value and Newton
advises those going down this SMMP path not to get hung up on cost, but focus
instead on value creation. “The savings will materialise and increase over
time,” he says.
Good SMMP solutions don’t automatically mean ‘cheapest’, it seems.
“Procurement teams should not source venues based upon the lowest cost, because
this may not meet with the objectives of the event,” says Newton.
“Suppliers must rather demonstrate their objectives match the demands of their
clients,” he says.
The kind of venue supplier skill sets valued highly would include being
intuitive in support (such as having experienced technicians on site),
delivering specialised catering and adequate internet bandwidth.
Corporate governance these days means venues being asked to demonstrate a whole
range of health and safety, CSR and environmental policies.
The success of an SMMP can be measured in a number of ways, but the most
critical focus upon value creation and cost savings would typically include:Quality of meetings
-
Compliance to SMM policies
- Meetings completed on or below budget
- Meetings being actively managed
- Realised/implemented cost savings
A journey to realising serious savings can take up to five
years and for any SMMP to be successful it needs support from the very top.
Once in place and managed properly, a programme can, says Newton, “create a
stronger organisation more in tune with itself and more likely to grow and be
better prepared to withstand the external economic challenges”.
Speed of progress in what must be a phased approach will be dependent on how
fragmented an organisation is and what its spend is, according to
Newton.Although many corporates are embracing the theory, he identifies a lack
of preparedness to push on to mature SMMPs.
Case studies and staff incentives are the kind of tools to change this
behaviour.
The Bribery Act is also likely to give an impulse to do more and agencies that
understand procurement and how to build SMMPs with clients will be the ones
likely extend their roles.
Newton also perceives a rethinking among travel managers who are now prepared
to incentivise some individuals to go under budget outside of the preferred
suppliers, provided they remain within the architecture of a plan.
Success, it seems, depends on internal appetite for change and whether there is
an evangelical streak in an organisation for a SMMP. A whole host of other
services, including HR benefits, reward cards and incentives schemes can bring
more savings if a programme moves into a mature stage.
Newton gives an example of one major professional management consultancy able
to reduce its sprawling venue list for meetings from 140 to just four thanks to
SMMP.
Such agreements can mean training course materials being stored permanently at
strategic event venues safe and secure, with many transport costs slashed. In
return, listed venues are guaranteed a good number of delegate days a year.
Savings over the programme of up to £2m were achieved by one company client
embracing the SMMP philosophy, Newton notes.
And it is the dedicated training centres, rather than hotels, that tend to be
the venues better equipped to meet all the demands of a mature SMMP, at least
at the current stage, says Newton.
This was first published in the September edition of Conference News. Any comments? Email conferencenews@mashmedia.net
