Reining in Unwieldy Meeting Costs
Meetings come in all shapes and sizes. There are one-on-one meetings
that can actually be productive, where you discuss a new strategy with
a like-minded colleague. High-level, closed-door meetings are another
sort, a permanent haven for some bosses. And there are off-site
meetings–where you pack your bag, board a plane, sleep in a hotel.
The last kind is growing ever-pricier, according to a new article by John Buchanan in The Conference
Board Review, some businesses don’t how much they’re forking over each
year for off-site meetings:
Recently, for example, Pfizer learned it was spending as much as $1
billion annually, twice management’s estimate — not including airfare.
The same ratio of actual to assumed spending — a lapse that often runs
into tens of millions of dollars a year — has been found at Honeywell,
Cisco Systems, and many other companies. Even top-gun Fortune 500
auditor PricewaterhouseCoopers missed its original meeting-cost
estimate by a country mile.
Why such cluelessness, and what can be done to rein in unwieldy costs?
A Tangled Labyrinth
Meeting planning is usually decentralized, so it can be difficult for companies to track how much they’re spending as costs are spread around departments and business units, the CBR story says. The article points out:
A recent study from leading business-travel researcher PhoCusWright revealed that 70 to 75 percent of all corporate meetings are “ad hoc,” meaning they are managed, sourced, negotiated, purchased, and tracked by non-professional meeting planners, such as administrative assistants, in a decentralized fashion. Budgets are monitored separately within individual departments and not tallied with the company’s meeting, travel, or procurement managers.
Upper management’s lack of involvement and meeting planners’ resistance to change–especially regarding technology–may add to problems, the story says, highlighting a report by Meeting Professionals International and AmEx:
Even more perplexing at a time when planners clearly recognize the shift from tactics to strategy, the least-sought-after new technologies, they said, are those that match attendees with relevant courses, vendors, and peers at an event; facilitate networking; share conference content; or provide more cost-effective alternatives to participation in live meetings, such as webcasts or DVDs. Such lack of interest is analogous to a caveman declining to master the use of fire.
Buchanan is right. Advances in technology are central to untangling the labyrinth of meeting planning and cutting costs. It behooves planners to be open to such changes.
Other cost-cutting strategies include structured, mandatory meeting policies, direct involvement of upper-level management, and using Intranets and databases to track costs and procedures.
The story shares success stories:
Bristol-Myers Squibb’s, which includes a proprietary database that captures all relevant information on every meeting, saves the company 18 to 20 percent a year on its meeting costs. BMS’s policy is that any meeting of more than thirty attendees with overnight accommodations, or costing more than $30,000, must be registered with the meeting-management department.
Another successful program has been installed in the far-flung and diverse corporate culture at Lockheed Martin. Over the past eighteen months, the company has consolidated fifty-five individual business-unit policies into one. Critical catalysts for the accomplishment were a multi-day Six Sigma seminar for twenty-five meeting buyers, procurement personnel, and internal-meeting sponsors, and hands-on involvement from CFO Chris Kubasik.
Ultimately businesses and meeting planners must do what works for them–what’s fine with one company might not fly for another. Most important is recognizing the need for change, and striking out on a path to get there.
- Business Travel, Meeting Costs to Rise in 2008 (MeetingsNet.com)
- Business-Travel Costs on the Rise (The Wall Street Journal)
- T&E price tag set to fly higher in ’08 (Financial Week)