In a recent study by the Incentive Research Foundation, more than half the respondents (52 percent) reported that procurement professionals are actively involved in incentive planning, supplier selection, or program implementation processes at their companies. But that involvement is not necessarily well received by incentive planners and suppliers.
According to the study, “The Involvement of Procurement or Purchasing in the Incentive Travel Business,” — which was unveiled at the IRF's 15th Annual Incentive Invitational, held in May at the Atlantis resort, Paradise Island, Bahamas — 67 percent of respondents said that procurement departments have had a negative effect on their ability to plan and implement incentive programs. In addition, 75 percent of participants reported that procurement's involvement in incentives has increased at their companies over the past two years, with 67 percent expecting that involvement to continue to increase through 2010.
“[Many incentive planners] believe that procurement is trying to stifle the incentive program and squeeze every penny out of it,” says Dahlton Bennington, CMP, CMM, director of business meeting services for Spherion Corp. in Fort Lauderdale, Fla., who attended the IRF event. “In a way, that is true, but at the same time, they have a due diligence to get the best bang for the buck. And that actually helps me in the end.”
Yet, despite the sourcing and negotiating expertise that procurement offers, a disconnect exists between planners and procurement. Most detrimental to the success of their incentive programs, according to the survey respondents:
Procurement's emphasis on cost and savings comes at the expense of results (39 percent);
Procurement lacks an understanding of incentive programs and their objectives (33 percent);
Procurement's influence dampens or eliminates creativity and programs become commoditized as a result (16 percent); and
Procurement creates roadblocks and delays in the planning and execution of incentives (6 percent).
While most attendees at the IRF's Annual Invitational agreed that working with procurement professionals presents challenges, many were also focused on making the partnership work. “We have an opportunity as planners to educate procurement about our business objectives,” says Sherrie Newman president of Firstpoint Consulting LLC, a Sammamish, Wash.-based marketing and communications firm that specializes in incentive program management.
At the Fortune 500 companies she works with, Newman says she often invites heads of procurement departments to budget planning meetings and destination review meetings when planning incentives in order to get their buy-in early in the process. “In the past, I have even had someone from procurement come on a site inspection with me and witness the decision-making process first-hand,” Newman says. “It really helps them better understand the business approach we take when selecting destinations and suppliers.”
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In What Areas is Procurement/Purchasing Involved in Incentives?
What is the Impact of Procurement/Purchasing on the Ability to Plan and Implement an Incentive Program?
|Source: Incentive Research Foundation, “The Involvement of Procurement or Purchasing in the Incentive Travel Business,” April 2008|
EIBTM Global Meetings & Incentives Exhibition Barcelona, Spain
Society of Incentive & Travel Executives
January 11-14, 2009
Professional Convention Management Association