DON'T TALK TO LYNN RIDZON ABOUT ROI. She's too busy saving her company millions of dollars to think about it.

Ridzon's meeting department at the Bristol-Myers Squibb Co. in Princeton, N.J., has embraced a process called CSM — consumption and specification management — that assesses internal meeting and travel consumption patterns in detail to identify needs and eliminate unnecessary expenditures.

It's a micro-approach to scrutinizing meeting expenditures and making changes such as placing meetings at less-expensive venues, combining multiple meetings, and implementing per-person meeting caps.

“In addition to cost savings as a result of contract negotiations, you need to step back and look at why you're doing things, how you're doing them, where you're doing them, and who is attending,” says Ridzon, director of global meeting management.

She has certainly proven her value to Bristol-Myers. In the first year of implementation, her department saved more than $6 million on meetings alone — this on top of the negotiated savings that the company realizes annually through its consolidated meeting management processes. This year, BMS has targeted about $10 million in incremental savings.

While Ridzon's success with CSM is clearly earning her respect from senior management, her cost-avoidance approach could not be further from the new ROI method that Meeting Professionals International is touting as a way for planners to get a seat at the table. ROI methodology is a macro-approach that has planning executives measuring the business impact of their meetings — sales generated, skills learned, etc. — in dollars and cents. “My problem with ROI,” she says, “is that I don't develop the content for our meetings. If your core job responsibilities are the logistics of meetings, then I think CSM is an excellent way to prove your value and iterate your expertise.”

How It Started

Two years ago, the global strategic sourcing department at BMS approached Ridzon with the concept of CSM — which it was ultimately planning to roll out companywide. “We were looking at other ways to drive procurement benefits in the organization,” says Bill Stirling, vice president, global sales/marketing and IT sourcing. “We had already implemented category management and strategic sourcing. CSM is an internally driven process in which we analyze and challenge the quantity and specifications of what is being procured.”

When the program was introduced in late 2003, meetings were part of the first wave of projects. “Meetings and travel were our flagship departments for this initiative because we have a lot of spend and visibility in those areas,” he explains.

It helped that BMS's meeting department had already been centralized for more than 10 years and had a proprietary system of tracking meeting spend called MARRS (Meeting Analysis Registration and Reporting System), which was developed and designed by the meeting management team in conjunction with their internal IT group.

“Data is key,” says Stirling. “It's fortunate that Lynn's team has a very robust data repository.”

The first step was to give Ridzon and her staff of 15 more authority. The company mandated meeting registration policy in 1998, but it needed to be enforced by senior management. “Lynn needed more clout in terms of compliance,” says Stirling. “The more meetings we can direct into Lynn's group to manage, the better off we are.”

Ridzon's staff is divided into three areas: internal meetings, external meetings, and the resource center, which sends out the requests for proposals, does site searches, negotiates contracts, produces budgets, and tracks expenses. In the past, her staff would have worked within the parameters of the meeting request to negotiate the best deals on meeting space, hotel rooms, and airfare. Now, they are supported by the CSM policy to take a closer look and ask questions to figure out ways to avoid costs.

The process of probing for more information — and having the authority to do so — is at the heart of CSM. “It's about needling down to what are the objectives of the meeting and what do we need to do to meet them,” explains Ridzon.

For example, when a meeting request comes in, one of the first questions Ridzon asks is: “Is this a national or regional meeting?” By looking at the audience and the part of the country they're from, she can determine the most cost-effective meeting site. If a group from the Northeast requests a meeting in Florida, she might suggest a regional venue to save money on airfare. If a request comes in for a training meeting at a resort in a top-tier destination, she might funnel it to an airport hotel or a smaller city. “Do you really need a resort if you're going to have a training meeting that runs from 7 in the morning until 10 at night?” she asks.

Another cost-saving measure has been to insist that people use meeting facilities at company sites, including an area the company uses for sales training meetings. “We found that the utilization rate of these rooms was only about 30 percent,” says Stirling. Now, groups use the space for smaller meetings that used to be booked off-site.

“There is a lot more scrutiny,” adds Stirling. “Not only are venues challenged, so is attendance.” Lynn's team, along with the hosts, determine who, and how many, really need to attend.

Ridzon's department also reports up through the corporate travel department, which has several money-saving CSM policies that affect meetings, such as mandating 14-day advance air bookings and eliminating first-class travel.

Per-Night Spending Caps

Also as part of the CSM initiative, Ridzon instituted per-person, per-night caps, with different spending limits for various types of meetings. “We have eight different meeting types, and every meeting goes into one of those buckets,” she explains. From training meetings on the low end to incentive trips on the high end, each type of meeting has a maximum allowable per-person, per-night rate. While not set in stone, these guidelines put a stake in the ground. For a company that runs about 300 meetings annually, the savings are huge.

Another tool Ridzon has at her disposal is the authority to combine meetings. “We review disparate meeting requests and recommend that certain meetings be joined together because they are maybe on either end, the same audience,” she explains. “So you're saving thousands of dollars, minimally, by combining two or three or even four meetings.”

This has been done several times in the past year, most recently with a training meeting, a national sales meeting, and a marketing meeting. They were all national meetings, scheduled around the same time, with crossover attendees. Her staff picked a site in the middle of the country (Dallas) and booked a venue for a week, with meetings scheduled back-to-back. By limiting travel expenses, room nights, and venue costs, they saved thousands without any disruption to the meetings.

Looking Inward

The concept of consumption management is not new within procurement circles, but as a formalized travel and meetings policy, it's cutting edge, says Anna Flynn, vice president, Institute for Supply Management, a leading procurement industry association in Tempe, Ariz. “I've only seen a few companies where people have actually put a program together.” Earlier this year, Flynn took an in-depth look at the BMS CSM initiative in a case study published by CAPS Research (www.capsresearch.org), an arm of ISM.

The typical approach to controlling cost is to do so externally — that is, manage expenses through relationships with suppliers and negotiating. CSM takes a different tack: looking internally. “If you say you want to manage costs, maybe you need to look back inside your organization and figure out where you're driving costs in the first place,” says Flynn.

Bringing the CSM initiative to meetings and events is indicative of what is happening throughout corporate America, she says. Procurement departments are taking a closer look at meetings and events, which have been overlooked in the past. “The idea is to create more structure and discipline, from a sourcing standpoint.”

At BMS, meeting planners manage the CSM program while maintaining a close working relationship with procurement. “There was a lot more interaction when we were rolling it out, but now it runs pretty smoothly,” says Stirling. Now, they talk on a weekly basis, and Ridzon attends monthly review meetings with Stirling and his staff. She also participates with the procurement CSM team in developing quarterly reports that are sent to the chief financial officer and executive management of the business unit.

A big challenge for CSM when it comes to meetings is imposing such a program without upsetting internal clients and attendees. If the accommodations or the venue or the transportation is inconvenient or unsatisfactory and affects the program or attendees' morale, these kinds of cost-avoidance measures can backfire. “The real danger is not fully capturing all the intangible costs,” says Flynn. “You [don't want to] start cutting back on certain things that may seem like a luxury but may be essential to creating the right learning environment.”

In cases in which individuals have objected to meeting recommendations — which has happened, but on a limited basis — there is an appeals process. Any changes need to be supported by a justifiable business reason and be OK'd by senior management.

Part of the Culture

Embedding the CSM concept into company culture is critical, says Stirling. His solution has been to communicate the benefits of CSM by providing training seminars and involving employees by asking them for their money-saving ideas through an internal, online “idea bank.”

When procurement came to Ridzon with the CSM initiative, she embraced the change, but not without impressing upon them the nuances of meetings and events. “Meetings are a different type of category. You are not just purchasing a commodity, you are really purchasing a service,” she says.

She also educated them about the supplier relationship management part of the job. “We were able to communicate that sourcing meetings is something that's different from transient travel and does require expertise in the area,” she says. Ridzon taught procurement to look at each meeting individually, which requires consistent processes and procedures for placing meetings. As she puts it: “Each meeting has its own personality and needs, so you have to understand what the objectives [of each one] are.”

So far, overall, the feedback from procurement, the company's senior management, and various department heads has been positive.

“I think everybody's on the same page here,” she says. “How can someone say, ‘You're wrong, I really want to spend $50,000 more’?” From a business perspective, what we're doing makes all the sense in the world.”

CSM at Bristol-Myers Squibb

WHAT IS IT? Consumption and specification management, a procurement-driven initiative that analyzes meeting expenditures and authorizes planners to make changes such as placing meetings at less-expensive venues, combining multiple meetings, and implementing per-person meeting caps

WHEN DID IT START? 2003

SAVINGS IN THE FIRST YEAR: $6 million

SAVINGS TARGETED FOR 2005: $10 million

The Problem with ROI

Lynn Ridzon is not interested in taking responsibility for meeting ROI based on meeting content. “I wouldn't even know where to begin, and, believe me, I have a lot of experience in meetings management,” she quips.

She questions what is being put out there by the industry on ROI. “The models they're suggesting people use to measure ROI are so convoluted that nobody who manages a substantial number of meetings would ever have the time or resources to be able to implement the process,” says Ridzon, director of global meeting management, Bristol-Myers Squibb, Princeton, N.J. She's referring to the ROI Methodology, developed by Jack Phillips, founder of the ROI Institute, Birmingham, Ala., which Meeting Professionals International has thrown its support behind as a tool to measure the intrinsic value of meetings. However, MPI brass, as well as Phillips, have stated that the methodology is not for everyone.

At BMS, planners can provide input on content or suggest venues or set-ups for certain types of seminars. “But we're not in a position where we are setting the objectives of meetings. We are supporting the communication of that message through a meeting program.”

Planner responsibilities differ from company to company, so some planners might find their situation more suited to measuring ROI, says Ridzon. Nonetheless, she thinks the CSM makes more sense for most planners than ROI and is a more efficient and effective way for them to prove their value.

“It's something you can control. And it's right in your own back yard — you know this stuff. If logistics management is your primary responsibility, you are there to support the ability of the meeting host to get their meeting objectives and message across in the best possible way.”

Industry leaders champion the idea of elevating the profile of the meeting planner within corporate America. But Ridzon thinks CSM — not ROI — is the way to go. “When your company is looking at a huge spend for meetings and it's being managed appropriately and you're showing great cost savings, then you definitely will get a seat at the table,” she says.