It’s a short story. In late 1998, New York Life went through a companywide "sourcing project," during which two catch phrases permeated the hallways and offices: "data capture" and "dollar spend."
With some of its meetings planned by an in-house department, some done by an incentive house, and others done by the field, New York Life could neither capture companywide meeting data nor calculate its total spending on meetings. That meant:
1. The company was missing opportunities to save big money through volume buying.
2. There was no consistency in vendor negotiation and contracting.
3. The quality of meetings was all over the map. Resolving the first problem—capturing and leveraging buying power—was the primary driver of meeting planning consolidation, says Jules del Vecchio, vice president.
In part, it meant a return to the past: Previously, the company had handled all of its incentive meetings in house. Outsourcing had crept in when New York State’s ban on international incentive travel for insurance companies was lifted in 1989. "We didn’t have the expertise to go overseas, so we worked with a boutique incentive travel firm," explains del Vecchio. Understandably, the firm became entrenched. New York Life paid a percentage of each program’s total cost—up to 15 percent.
But the company’s long-term relationship with the incentive house may be drawing to a close thanks to the meeting department’s new mandate and its new technology. (See main story.)
In addition, del Vecchio has become more savvy about outsourcing: "If I use an incentive house now, I pay them a management fee," he notes. "I make sure nothing is marked up twice." And this year that management fee was cut in half—to $75,000—thanks to the time and effort saved by New York Life’s new database. Next year the incentive house will help out on only one meeting, rather than the two it managed in 2002.
In a further move to harness its buying power, the meeting department has begun partnering with New York Life’s corporate travel department on airline negotiation. "By using both transient and group in the negotiation process and by moving more of our spend to preferred airlines, we obtain greater discounts for both transient and group," del Vecchio explains. New York Life negotiates separate contracts with the airlines and with a travel company that books the air.
Meanwhile, del Vecchio’s eight-person department now plans nine large meetings and up to 100 smaller meetings per year. The number is still increasing. "We’ve become known as the professionals," del Vecchio says, "and a lot of business is coming our way."