When planning a meeting for a pharmaceutical company, Saira Banu Kianes, director of meeting services for the Phoenix Group, a Warren, NJ-based meeting planning company that specializes in pharmaceutical meetings, requested that a property take the word “resort” off of its stationery so that a client could use the venue for a meeting. Kianes told this story during a panel discussion at the 26th annual conference of the International Association of Conference Centers (IACC) at The Heldrich in New Brunswick, NJ, In April.
It’s probably the oldest trick in a new bookone that’s been around for only about seven years or soHow to Work with Your Procurement Department. If such a book were in print, it would be a bestseller, as higher scrutiny of meetings and events across industries is a part of the daily lives of most meeting planners. And the future most likely holds an even greater presence of procurement in meeting and event planning. But since that book doesn’t exist, here is a quick grocery list of strategies and things you need to know to work productively with procurement departments.
Aisle 1: A Brief History of Meetings Procurement
What, just a few years ago, used to be considered an ancillary function from the corporate perspective accounted for $122.3 billion in purchasing in North America in 2005, according to the Washington D.C.-based Convention Industry Council. In the book, Proving the Value of Meetings and Events, authors Jack J. Phillips (of the Birmingham, AL-based ROI Institute), Monica Myhill, and James B. McDonough contend that it is at least logical that an industry six times bigger than Hollywood (annual box office revenues top $23 billion, also according to Phillips’ book) would be closely watched. Bjorn Hanson, global hospitality industry managing partner for PricewaterhouseCoopers (PwC) agrees. In his practice, Hanson has watched the meetings industry become the fastest growing demand segment in hospitality.
“The involvement of procurement in meeting planning is not a passing fad,” says Terri Breining, president of Carlsbad, CA-based Concepts Worldwide. “It is here to stay.” The increasing attention meeting and events receive from procurement and purchasing departments is a sign of the times. PwC’s Hanson, concedes that the involvement of procurement in meetings is “one more way meeting planners’ lives have become more complicated.” However, the message here is a positive one. “Meetings are treated more as an important core corporate activity,” says Hanson.
In addition to the industry’s growth, other factors also pushed for a greater surveillance of costs and contracts. “Sarbanes-Oxley obviously created the need for a clear process, and procurement [departments] are kind of leading those efforts for a lot of companies,” says Mike Boult, president and CEO for Philadelphia-based StarCite, a provider of technology for meetings and events. “It is not okay anymore for people just to sign contracts and do business with cousins, uncles, friends, acquaintances.
There’s got to be a very rigorous and consistent process by which a number of vendors are selected.” The ROI Institute’s Phillips says disputes for insurance money after 9/11 also led to higher scrutiny in corporations.
Aisle 2: The Corporate Travel Connection
American Express Business Travel garnered $1 billion in new business globally within the first 100 days of 2007. This illustrates the new modus operandi in the meetings industry. One of its core client services is procurement and process management expertise. Recently, the company introduced a consultancy practice aimed at companies willing to control meetings and traditional corporate travel purchasing, with a service that aggregates more than 135,000 suppliers.
“Procurement is having a positive impact on meetings by applying some of the same techniques [used] across [corporate] travel programs to meeting spending,” says Cristina Wilkes, practice leader, advisory services for American Express Business Travel. Teams of procurement specialists work on behalf of customers negotiating and managing contracts for individual events. “The value comes in knowing how to successfully negotiate a contract in terms of both savings as well as managing the potential risks of the exposure a company has in a hotel contract.”
That might be the reason why some planners are welcoming the idea of bringing procurement and purchasing people to their tables. “A lot of people enjoy getting that part of the process off their plate,” says Wilkes. “It is very time consuming and quite stressful if you are not an expert negotiator who knows how to navigate a hotel contract.”
Aisle 3: Educate Your Procurement Partners
For Concepts Worldwide’s Breining, the greater involvement of procurement is a logical next step in the meetings industry evolution. One aspect of this evolution is that meeting planners and procurement officers alike are undertaking efforts to educate themselves about each others’ activities to work better together. “We’ve run into great cooperation and a sense of curiosity from the procurement department,” Breining says. “They want to know what makes up a good meeting and how it brings value to the organization.”
But still, some people remain uncomfortable with the idea of being under procurement watch. “I’ve heard stories from other planners that say who they are afraid that procurement people will always go for the cheapest alternative, which is not necessarily the best one,” Breining says.
Aisle 4: Learn Procurement’s Lingo
Those who have been successful in handling the scrutiny and working well together with people in procurement say that it is crucial to gather as much information as possible, be extremely organized, and pay special attention to details.
Independent meeting planner Mary Young, who heads M.Y. Events in Tempe, AZ, says that first and foremost she and her team try to find out how the client structures their RFPs and how [their procurement department] analyzes them. “Sometimes, taking that time upfront to talk with the procurement officers [to find out] what they are looking for can save me a lot of time,” she says. “If I am the meeting planner and I am looking for vendors for a meeting, then I can structure my paperwork the correct way for them and if I am an outside vendor and I am bidding on that [piece of business], then I can also structure my proposal to that, to make it easier for them to analyze my bid versus someone else’s bid.” People sometimes don’t read the fine print, Young adds. Consequently, procurement officers either contact vendors again to clarify the proposal and ask further questions or simply throw the bids out.
Another important reason planners are letting go of the resistance in working with procurement departments is being reassured that contracts are in line with their companies’ policies. “Procurement helps with getting things in a certain format for the legal department to sign off,” says Young, whose ideal process is working with procurement on a check list, including things such as whether or not vendors need to be female- or minority-owned and what type of insurance is preferred. “It is like a lot of things with meeting planning, the more organized you are, ahead of time, and the more information you can get, the smoother things go all the way through the planning process.”
Aisle 5: hire an intermediary
Working with different clients has given Young a different perspective of how procurement departments and meeting planners interact and the different hats, an independent planner can wear in facilitating the process. Often times, corporations, mainly large ones, use independent meeting planners as intermediaries. “I’ve worked with large corporations, and the minute you mention the large corporation’s name, [the supplier] thinks, ‘You can afford whatever I am going to give you, I am going to quote you a higher rate’ type of thing,” she says. “The independents can act as an intermediary and use their names to negotiate a little bit further.” Young even tested this, calling vendors for quotes and later calling again for the same service, but mentioning the name of the corporation, at which point she was quoted a higher price. “Vendors think that corporations have deep pockets.”
Misconceptions might take some time if they ever are to go away. However, the volume of meetings and their importance in the eyes of corporate leadership seem to be irreversible. So, it is time to accept and adapt to a new reality and make the most of it. \
Originally published July 01, 2007
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