Talk about tight lead times: Alice Woychik and her team had 10 days to organize a product launch for 3,200 attendees. Before the director of meeting solutions at Novartis could finalize plans for the event, the new drug had to be approved by the Food and Drug Administration. Once the approval came through, it had to be launched immediately.
One of her first steps was to hold a brainstorming session to develop “innovative ideas for accelerating the planning process,” to which she invited her suppliers. “Everyone — including our suppliers — developed a can-do attitude after that initial meeting,” recalls Woychik. “They basically told us, ‘We are going to make this happen with you.'”
Working with hotel and logistics vendors, the team took some big risks. They began sourcing hotels in advance, so as soon as they got the go-ahead, they could sign theimmediately. “We worked with our travel vendor to do an air analysis and book 3,200 attendees on flights based on their location,” says Woychik. “Attendees are conditioned to making their own travel arrangements, so we developed a communications plan to let them know their airfare was being booked for them.” Anyone who could not attend was asked to notify Woychik and her team within 24 hours.
The June 2007 meeting in Dallas went off so smoothly that it is still viewed at Novartis as a model for product launches — an achievement Woychik says would not have been possible without her suppliers and their willingness to jump on board to make things happen.
“I think by engaging them in that initial brainstorming session, we got their buy-in,” she says, “and everyone had a stake in the meeting. I know if we didn't have those great relationships in place, it would not have been nearly as successful.”
Suppliers as Partners
Welcome to the new era of supplier relationship management. As companies rely more and more on preferred meeting suppliers, establishing strong partnerships with these vendors, as Woychik has, is essential. That means tossing aside the traditional view of the customer-vendor relationship and treating suppliers more as business partners with a vested interest in the success of the event as well as your overall corporate goals.
In the past couple of years, SRM, a standard procurement practice, has gained traction at companies that outsource meeting logistics to preferred suppliers.
“Companies are starting to take a hard look at their core competencies and ask, ‘What is it we need to spend our time and resources on?' And many are coming to the conclusion that they do not need to be experts on meeting logistics,” says George Odom, senior director of business development at Dallas-based Advito, a consulting arm of BCD Meetings & Incentives. Instead, many companies are elevating the planner's role to that of project manager, with a focus on strategic elements of the meeting, such as content management.
For example, at Novartis, meeting professionals act as account managers, liaising between internal clients and logistics vendors to ensure that a meeting is executed according to the client's standards. The company rolled out its SRM program to its five preferred meeting logistics providers in the first quarter of 2008, and to its four preferred hotel chains this summer. The SRM model is a five-step process that ranges from familiarizing suppliers on Novartis business processes to measuring and assessing performance, and finally, optimizing the relationship. (See box, page 23.)
Communication Comes First
The two keys to a successful SRM program are steady and strong communication with vendors, and a system of performance measurement and improvement. Financial services giant ING has taken communications with preferred hotel suppliers to a whole new level. Meeting planners, who are decentralized in ING's model, use centralized meeting management processes for registering and sourcing their meetings, and under this model, the use of preferred providers is strongly encouraged. One of the ways the company helps drive business to its preferred hotel chains is by cultivating relationships between its meeting planners and the hotel's national account managers.
“We bring in the national account managers regularly for training events to help them get a better understanding of what ING is looking for and familiarize them with our policies and procedures,” says Lisa Poulton, director of conference planning operations for ING, who is based in Windsor, Conn. One of those events is ING's annual M@I (Meetings at ING) Summit — a two-day event where ING planners and top suppliers are invited to participate in educational sessions and networking events. On the first day, Poulton and Deanna Bloodgood, sourcing specialist for travel, meetings, and incentives at ING, hold a pre-meeting with a preferredand the top five to seven national sales managers from the major hotel chains with which ING does the most business.
“We go over processes and procedures, discuss any changes that have taken place in the organization, and answer their questions,” says Poulton. “We also recap our spend with them from the past year.” The meeting is an opportunity for long-term suppliers to get a refresher on the company and for new account managers to meet the ING team and ask questions about practices they may be unfamiliar with.”
“Our suppliers can do a better job of meeting our needs if they understand our expectations,” says Bloodgood. “If they are able to meet our needs, they are going to win or maintain more of our business.”
The M@I Summit has helped open the lines of communication between ING planners operating in various locations and their hotelier contacts. “The meeting planners within ING really value the relationships they have established with their national account managers,” says Poulton. “They see the national account manager as a point person and a partner — someone they can go to if they have an issue with a property.”
For future M@I Summits, Poulton is exploring the option of including different preferred-vendor categories, and she is looking into revamping the agenda to allow for national account managers to make presentations to planners during the event.
ING is also working to streamline its RFP technology platform so that when leads are generated, they go directly to the national account managers at its preferred hotel chains. The hotel rep can then act as a liaison between ING and the property where it is looking to place the meeting. “The new process will give a face to the lead and provide us with more leverage in negotiations,” says Poulton. “Our national account manager can talk to the property in question about what ING brings to the table collectively.”
As Kevin Iwamoto, global meetings commodity manager for HP, Palo Alto, Calif., [now with StarCite] says, “This is where the rubber meets the road. If you have suppliers that are familiar with your company and have been working with you for a long time, they become an extension of your company and an additional resource you can tap.”
Communicating with suppliers is an integral part of HP's supplier relationship management protocol and a key to the program's success. “The worst mistake you can make is signing a deal and walking away and hoping it manages itself. That is where you get into some pretty dangerous territory. Being fluid and having a constant dialogue is critical.”
SRM programs also require that companies establish metrics to measure vendor performance — and get supplier buy-in on these metrics. That's standard procedure at Novartis. “We have a discussion with vendors to get their feedback and see if they have things they would like to be measured on. Then we come to an agreement,” says Woychik. She identifies key performance indicators (KPIs) in each vendor's service agreement — things like quality of service, cost or economic value, innovation, and assurance of supply or capacity.
At HP, the meetings services team uses service-level agreements (SLAs) that relate to each vendor category to manage its “HP-approved” suppliers and assess performance at regular review meetings. The frequency of contact with vendors “really depends on the supplier and what service they are providing for us,” says Iwamoto, “although, I have found that most times it's better to over-communicate.”
In these reviews, Iwamoto says the team discusses the “scope-of-work” document with each supplier as well as the SLA that governs the relationship. “We look at metrics and KPIs to see how they are trending. And we look at volume to see if there is any change in patterns and why these changes might be occurring.”
But in a service-oriented industry like meetings, establishing metrics to quantify performance may make some suppliers wary. “For the vendors, there is a part of the process that they don't have control over, and that can be pretty daunting,” says Woychik, “like when they're asked to deliver a product launch for us four times faster than usual — and know they will be measured on their performance. But these are best-in-class vendors, and they are our preferred vendors for a reason.”
She is quick to note that performance shouldn't be over-engineered either. A common pitfall to avoid: Developing more KPIs than are necessary. “When we first came out with this process we thought we needed a big list of KPIs, but in reality, many aspects of performance roll up under a couple of overall indicators.”
Woychik and her team spent a lot of time communicating the performance review process to the vendors during their SRM rollout, and she advises planners to do the same. “Don't develop all the KPIs on your own.” It should be a discussion and an agreement that the meetings department and the vendor come to together, and planners should get the meeting stakeholders involved in the discussion as well.
Woychik reviews supplier performance on a quarterly basis with her core team of stakeholders and a group of end users. Vendors are at the table during these review meetings to discuss performance data, and the team meets with each vendor separately to provide feedback. “Because we manage so many meetings, we're really trying to identify and address performance trends with this step, as opposed to focusing on one-off issues that may have occurred.” She also includes survey data from meeting attendees.
While this two-way dialogue can be very beneficial in managing performance, the challenge is to ensure the feedback is constructive. “The best scenario,” says Woychik, “is if the [internal client] can provide the vendor with some feedback prior to the sit-down, so the vendor has a chance to digest that information. Sometimes they are presented with new information in that discussion that they were previously unaware of. That can be a bit awkward.”
Eyeing the Future Together
Supplier relationship management extends beyond building stronger communications and performance measures to having suppliers go to bat for their clients, says Advito's Odom. “It's not just about cost savings and risk mitigation. A supplier's expertise can also help optimize the relationship with an eye toward enhancing the program.”
“Any good supplier should be partnering with clients to drive continuous improvement into the meetings program,” agrees Kristen Dierickx, CMP, national director offor BCD Meetings & Incentives. “They are the ones living and breathing this process every day and getting the direct feedback from their meeting contact as well as the attendees themselves. The onus is really on the supplier to be taking the pulse of the SMMP and offering up solutions for improvement.”
In fact, it was through a vendor that Woychik got the idea to use a software tool that allowed users to build their own registration Web sites from a template. In the past, her team would build custom sites for each meeting. “We went from spending two weeks on building these sites, to creating and building them in a single afternoon,” says Woychik. Starting this year, the team migrated over to the new software tool for all its meetings and no longer builds home-grown sites for each event.
The biggest challenge, says Woychik, is that “we're so focused on the day-to-day aspects of planning the meeting, it's difficult sometimes to look further into the future. But we don't want to be an organization that is standing still. We want to constantly push forward to the next level and evaluate how our vendor partners can help us get there.”
At the Starting Line
Sharon Marsh knows the value of a strong supplier relationship management program: She's helped implement vendor management processes for the meeting teams at both Cisco and VeriSign, and now, as the new meetings group manager for Medtronic, Santa Rosa, Calif., she's about to do it again.
The company has a mature strategic meetings management program, “but we don't have a strong SRM process in place yet,” says Marsh, who took the role just two months ago. Her first step is to put service-level agreements in place with preferred suppliers that include key performance metrics for measuring vendors.
While the company is taking its SMMP global through its headquarters in Minneapolis, Marsh says she will be assessing the vendor management piece on a regional level, focusing first on the California branch. “We are looking at the categories where Medtronic puts the majority of its meetings spend, and we are going out to bid in these areas. We are going to let vendors know what we spend on average in a year and look for preferred vendors to start an SLA [service-level agreement] with.”
The process will allow Medtronic to hold suppliers to specific performance standards outlined in their contracts and help Marsh and her team determine if they are getting the best value from their partnerships.
It's a good approach, notes George Odom, senior director of business development at Dallas-based Advito. “SRM is not something that happens overnight. In most cases it starts out as a strategic sourcing initiative and evolves into measuring metrics and data. That can then lead to suppliers moving from a role of order-taker to one of business partner.”
“It's a journey,” he adds. “It's iterative, so the more you get into it, the better you get at it. If you find that five years from now you're measuring and managing everything the same way you are today, you didn't do it right.”
Novartis' Five-Step Srm Process
Speaking at the Fourth Annual Pharmaceutical Meeting Planners Forum in Baltimore last March, Alice Woychik, director of meeting solutions for Novartis, East Hanover, N.J., gave attendees a rundown of her company's five-step supplier relationship management process.
Step 1: Supplier Qualification. A core team consisting of Novartis stakeholders and key personnel from the meeting solutions and strategic sourcing departments develop and implement criteria for vendor assessment that is consistent across all suppliers. This step mandates that vendors use Novartis' uniform processes to ensure consistency.
Step 2: Supplier Segmentation. In this step, supplier data is typically segmented by meeting type and meeting location. For example, the supplier will need to track and report on different data for an investigator meeting than for a speaker training meeting.
Step 3: Supplier Performance Measurement: Here, key performance indicators (KPIs) are laid out in each vendor's service agreement and cover such components as quality of service, cost, innovation, compliance, and assurance of supply or capacity.
Step 4: Supplier Assessment. Suppliers are measured on whether they are meeting the previously established KPIs and metrics. Review meetings are conducted quarterly.
Step 5: Supplier Relationship Optimization. In this final step, Novartis aims to optimize supplier performance with a focus on future development. These discussions with the vendor involve analyzing what is going right and what is going wrong and determining how both parties can better work together to further the company's strategic objectives.