More and more CFOs are moving meetings front of mind.
For years, meeting professionals have promoted how important it is to get on the radar screens of C-level executives. To get their buy-in on. To win a seat at the table.
The good news is that more and more CFOs get it: Because of higher meeting costs, Sarbanes-Oxley, new data-tracking and reporting technologies, and other reasons, many CFOs now see meeting spend as an area that is ready for expense management.
John Adair, CFO at Redmond, Wash.-based Concur, is the perfect example. While meeting planning is currently a decentralized function at Concur, Adair is actively involved in tracking and monitoring meeting spend. The company uses its own expense-management software, Concur Meeting, to capture data on all meetings planned companywide, and Adair receives reports on everything from the number of meetings being planned to attendee registration and total meeting spend.
Concur is in the business of expense management, so you might think that Adair is more aware of meetings than most — but he disagrees. “Over the past three to four years, meetings have gotten more and more attention [from C-level execs]. I think I am probably a typical CFO. I get reporting on all meetings of any size. We set up specific budgets for meetings and monitor spend against those budgets. We do real-time reporting and see how the travel component of a meeting is running against the budget.”
A survey of Corporate Meetings & Incentives' readers confirms that: One in four planners reports that their CFOs' involvement in meeting management has grown over the past 12 months. Thirty-seven percent say that their CFOs are involved in approving meeting spending, and 27 percent say that their CFOs have some involvement in both settingand site-related decisions. And this, readers say, will only grow.
What Gets Measured?
All of this is good news for planners who, instead of viewing C-level oversight as Big Brother, see this increased interest from top management as an opportunity to grow their strategic roles and gain support for their departments' initiatives.
Pamela Ferranti, manager, meeting management solutions, Xerox Corp., Webster, N.Y., is one example. Ever since the company took a cue from its corporate travel department and developed a centralized meeting-management solutions department in 2004, her department has had the buy-in of her CFO.
And as the strategic meeting management program at Xerox continues to mature (Ferranti and her team are working to expand the program globally), she now reports monthly to senior management on such metrics as number of meetings going through their department, number of attendees per meeting, projected meeting spend, and cost per attendee.
Ferranti is evaluated on how her division contributes not only to savings and cost avoidance, but also to top-line growth. “Some people might think that an organization like ours that provides an internal service would not contribute to revenue generation, but it's absolutely the opposite,” she says. “We're responsible for feeding data from customer events into our sales database. From there, the sales force has the ability to see which customers attended Xerox events and then have intelligent conversations with them as a result.”
She communicates results such as these to the company's senior officers through a monthly management letter, and reports on savings initiatives, such as integrating air-booking software from GetThere into StarCite's attendee registration platform, which resulted in a reduction of air-ticket fulfillment fees by 75 percent. An incredible 98 percent of the company's meetings are now booked through her department, which helped to achieve a savings of 40 percent on meeting expenses in 2007.
How Much Should CFOs Care?
According to a recent study by Boston-based research firm The Aberdeen Group, meetings represent a multimillion-dollar category of spend that, on average, is equal to 2.8 percent of a company's revenue. While these numbers — and efforts such as Ferranti's — should demand the attention of the finance department, the question is how much attention?
CFOs who do not have any meetings oversight are likely missing a huge opportunity to control costs, says Kari Knoll Kesler, global manager, Honeywell meeting solutions, St. Louis Park, Minn. “The number of meetings that companies think they plan and the number they actually plan are usually drastically different. In my experience, companies typically spend three times more on meetings than they estimate.”
Kesler, who was hired at Honeywell to initiate a SMMP, has the huge task of “making sure we are making the right decisions about the company's $66 million annual investment in meetings and events.” That means the 5,000 events that planners at Honeywell execute each year must all go through her department, which resides in procurement and reports to finance.
Appointing Kesler to a senior position with strategic oversight of meetings (effectively just two people removed from the CFO) has freed her company's top financial officer to worry about other things. “Meeting management isn't something he thinks about every week,” she says of CFO Dave Anderson. “It's somewhere on his huge radar, but from a big-picture perspective, this is what we should be doing, and it's what he expects us to do.”
Kesler admits that getting time in front of a busy CFO can be a challenge. While her efforts have helped the company to achieve an annual savings of between 10 percent and 12 percent, she still has to sell the value of her department whenever there is a change in management. She recalls a transitional period when her team went from reporting to shared services to reporting to finance, and she found herself once again explaining the program's value to Honeywell's CFO. “During a review meeting, the agenda called for our team's initiatives to be discussed along with a number of other high-level initiatives that day. The CFO took one look at the agenda and said, ‘Let's kill this. We don't need to focus on this,’ referring to the program I had been working on for the past two years.”
Luckily, she was able to convince him otherwise, but notes that knowing how to communicate is key. “When talking to finance, it's about the numbers — being able to show that the program will self-fund and that it will reap savings.”
CFOs' increasing involvement in meetings isn't just the result of planners such as Kesler bringing it to their attention. The current financial landscape also has a lot to do with it.
“We continually look for the opportunity to spend less, and meetings seems like an area that is somewhat ripe for management,” says Steve Shebik, vice president and CFO at Allstate Insurance Co., Northbrook, Ill. “Over the last couple of years, my oversight has intensified because travel costs are higher today than they have been in the past. We are not telling [meeting sponsors] where to go, but we are holding budgets at levels below where they were in the past and forcing people to decide how many people they are going to bring [to a meeting] and how much they are spending on each attendee.”
For larger meetings, such as sales training and incentive trips, Shebik says his involvement is focused mainly on setting budgets. He relies on Allstate's vice president of procurement, Lori Yelvington, for everything else. “Nocan be signed by anyone but procurement,” says Yelvington. “We sign off on to make sure that we are protecting the company from risk. We also look for things that might stand out, like excessive fees.”
At Fort Worth, Texas-based Elbit Systems of America, the U.S. subsidiary of the Israeli defense electronics manufacturer, CFO Bill Augat recently decided to outsource all the company's travel to a third-party provider and mandated that all employees use it. He meets with CFOs from each of the company's four business units monthly to discuss the new travel policy.
His motive? “To find ways to wring more cost out of the business so we can reinvest it and grow other activities such as R&D,” says Augat.
This is the model through which most CFOs get involved in meetings, says Randall Kane, managing partner, Acquis Consulting Group, a New York-based management consulting firm. “They are first looking at meetings through a business-travel lens,” he says. “They are saying ‘We have a strong mandated travel policy in place, why don't we use that as a baseline to construct a model for meetings?’”
Honeywell's Kesler believes that at least minimal components of an SMMP are a good idea for even the smallest meeting spend. “It's a gap in data that CFOs should want to see filled in.”
Advances in technology have made that data more readily available. “Years ago we simply didn't have robust meeting-management tools available to companies to allow them to really administer and manage this process,” says Concur's Adair. “These tools have really just come about in the last few years.”
He'll be keeping a keen eye on the category, that's for sure. “As we continue to grow, we will reevaluate the need to centralize meetings management, no differently from the way that we evaluate the need to centralize other services across the business,” he says.
“It wouldn't surprise me if we made the decision to have a centralized meetings-management program within the next year or two.”
A Value-prop in C-level Terms
“When executives understand the magnitude of the dollars being spent on meetings, and they understand that there is no central visibility into that spend, that's when they sit up and say, ‘You know, we could have a quick win here.’” That's how Kevin Young, vice president of marketing and midmarket solutions for meetings-technology provider StarCite, sees it. StarCite has developed a model to project the effect that a strategic meeting management program will have on earnings, the expectedof an SMMP, the payback period for this type of investment, and other metrics. StarCite weighs such factors as the industry in which the company competes, annual revenue, travel and expense spend, and how mature the company already is in terms of its meetings management.
Young says that, so far, the projections have proven to be pretty accurate. On average, the companies that StarCite analyzed saw a savings of between 15 percent and 20 percent from making the technology investment.
“We give this model to the people we are working with so that it is easier for them to go speak to their CFO and say, ‘Here is the business case for doing this.’” Without data, he says, “Frankly, the CFO doesn't care.”