Although SMMPs were launched around 2004, the initiative only really began to pick up momentum in Europe 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.
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 their environmental impact is, are key.
A carefully planned and implemented SMMP can save over 10 per cent in expenditure on meetings and add meeting value, according to 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 can be a very emotive decision,” says Newton.
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 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 CFOs 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 writing 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), performance 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 it 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 hotel room.
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 metrics that measure, benchmark and report results to senior management.
Newton advises ongoing validation of real meeting value. Those going down this SMMP path should not get too hung up on cost, but focus instead on value creation. “The savings will materialise and increase over time,” he says, noting good SMMP solutions don’t automatically mean ‘cheapest’.
“Suppliers must rather demonstrate their objectives match the demands of their clients,” says Newton.
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 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 embrace the theory, Newton perceives 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 host of other services, including HR benefits, reward cards and incentives can bring more savings if a programme matures.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 programmes can include training course materials being stored permanently at strategic venues, slashing transport costs. In return, listed venues are guaranteed a good number of delegate days a year.
Savings over the programme of up to £2m have been achieved by one company client embracing SMMP, Newton notes. And he says 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.
This was first published in Issue 69 of CMW. Any comments? Email firstname.lastname@example.org