It all began in 2007, when technology giant IBM decided to get its arms around its global meeting spend. That’s no easy task for a company that’s the second largest in the world in terms of number of employees (433,362, according to the 2012 Fortune 500), with thousands of off-site meetings worldwide every year.
The man they chose for the job was Paul Wakelin, strategic sourcing specialist with IBM’S Global Travel Council. Based in Birmingham, England, Wakelin has overseen the rollout of the company’s SMM program from the start, beginning with deployment in the U.S. in 2008, followed by the U.K. in 2009. Over the last several years, he managed the launch in more than 30 countries in Europe, the Middle East, and Africa.Then it was time for China, a country of more than a billion people and an economy that is expected to soon surpass the U.S. as the world’s largest. IBM is a growing quickly there, with a field force of 5,000 sales/technical personnel in more than 300 cities across China.
“It’s a very dynamic market,” Wakelin says. “We’ve done product launches there with more than 10,000 attendees. Along with India, it’s where we expect to see the most growth in the coming years.” He believes IBM is the first company to strategically source its meetings in China, though Apple and Intel are now in the initial stages of sourcing. The entire process took 8 months to launch.
How It Works
IBM had brought in StarCite (now part of ACTIVE Network) in 2008 to develop its meeting portal. A year ago, the program went live in China, where it’s currently tracking spend on about 500 meetings annually. Wakelin estimates those 500 meetings in China account for about 11 percent of IBM’s total spend on meetings.
Any employee in China—adminstrative assistants as well as meeting planners—can complete a meeting request form, which is routed directly to one of two approved event agencies that source venues on behalf of IBM. The agency then uses the system to generate a request for proposal, and ultimately to select a venue from the responses.
About 80 percent of the China meetings that are managed through the portal are held in hotels; in fact, Wakelin says that except for the big product launches, there aren’t many events/meetings that use venues outside of hotels. Meetings are divided into two categories: creative events (those that require third parties outside of the hotel, such a production company), and non-creative meetings/events (no third parties, just hotel staff). Most fall into the latter category, he says.
The agency that handles IBM’s creative events is GPJ, part of the U.S.-based creative event agency George P. Johnson. The agency for meetings/events requiring just hotel staff is China Comfort Travel, a Chinese travel management company.
Unlike most other deployments, Wakelin traveled to China before the rollout and spent a week explaining the benefits of the program and how to use it.
“In this culture, it’s just imperative to make face-to-face contact. People need to look you in the eye and establish trust in person, and I think making the trip was absolutely essential to getting buy-in and compliance.”
Indeed, he was a virtual Marco Polo for a week in China, at one point taking a 12-hour overnight train between Beijing and Shanghai, where he explained the benefits of the program and how to use it not only to IBMers and the sourcing agencies, but to hotel companies as well.
“In countries like China, India, and parts of Latin America, you can’t take for granted buy-in and compliance on the supplier side,” he says. “A hotel could be part of a preferred chain but that doesn’t guarantee that it will always reply to an RFP.” This is particularly true of properties in smaller cities where RFP protocols are not well established.
Wakelin says there was also a steep learning curve with the two sourcing agencies, (which were contracted well before rollout through IBM’s procurement team in China). “The process of getting a meeting request, sending out
an RFP, collecting responses—it was all totally new to them. Overall, there was a need for a lot of hand-holding to help make the transition.”
A broader challenge had to do with cultural norms: It’s impolite to say “no” to a request in China, even in a business context, Wakelin points out, so you have to be careful how you frame your questions. Instead of asking if a project will be done by a certain date, ask for a date and time of completion. It also helps to explain things in lots of different ways, so that you can be sure nothing is misunderstood.
During one presentation with regional hotel managers, for example, Wakelin drew a picture of a rocket ship and planets, with the rocket representing the RFP program and the planets hotels. “Humor can build rapport and it helps people remember better,” Wakelin says.
As for the challenge of language, the sourcing tool in China uses English, which is “not a big problem in the big cities,” he says. For the meeting request form, a Chinese translation was added to help facilitate hotel responses, particularly in the less-developed areas. However, as the translation stipulates, all replies to the form must be in English.
“We need to be able to roll up all this global data to create reports for upper management, so having data in multiple languages would make that too difficult, too time consuming." He adds that the StarCite tool has very good functionality in converting local currencies into U.S. dollars for reports that go to management, so currency management was a non-issue.
Midnight Classes, Greenwich Meantime
Why did IBM choose a U.K. employee to manage the roll-out of its SMMP? “The time zone here is more conducive to working a global rollout,” Wakelin says, noting that he had nonetheless gotten up in the middle of the night a few times to conduct education sessions with teams in Australia and New Zealand.
Wakelin, who’s 40 years old, worked at IBM for just 18 months working in external relations before being asked if he’d like to interview for the position he currently holds. “It’s been a fantastic opportunity, even with the odd hours.”
He traveled all around the world after leaving college, and has been to every continent in the 15 years since then, but his trip to China for IBM was his first time in the country.
Looking back, what would he do differently if he had to do the China rollout again?
“Well, meetings and events are such a complex commodity, far more complex than transient travel management, so there’s always room for tweaking,” he says. “But mainly I think spending more time with global hotel chains and aligning them with our process before going live, that’s probably the main thing. There’s a lot of turnover in Asia at hotels, so it’s challenging.”
Overall, though, Wakelin says he’s very happy with the China rollout and with compliance. “The Chinese culturally are conformists, and if you take the time to develop a relationship with them, they will honor that relationship.”
Paul Wakelin's First Trip to China: A First-Person Account
"The first city I visited was Beijing, which is the capital and very traditional, with many people not speaking or understanding English outside of the main hotels. The city is densely populated, with some 400,000 cars on the roads, which you can believe with the traffic and smog.
The second city I visited was Shanghai. I took a night train there from Beijing. Sharing a small confined cabin with four Chinese guys and making conversation in broken English and sign language throughout the night was quite unforgettable. Cabin lights are never turned off, though, and that made getting to sleep even more challenging.
Shanghai is more Westernized and quite amazing. Gambling, smoking, and social drinking are now all very popular in China. Just eating food at a street vendor can be totally entertaining, watching what goes on while enjoying a large bowl of delicious noodles on the street at a cost of just eighty cents.
China is also one of the safest places I have ever been. There is a large police presence and I felt very comfortable wandering around late at night—not that I often do that sort of thing!
Anyone traveling to China for business should take a lot of business cards. I ran out in the first couple of days as I underestimated the volume of people I would be introduced to. And by the way, the etiquette of how you present your card is very important: Present your business card with two hands to your counterparts.
Finally, if you don’t take a business card with the name of your hotel printed on it in Chinese, then you can pretty much forget about finding your way back to your hotel again! I made this fatal mistake and got in and out of three taxis trying to communicate the way home. In the end, I had to Google my hotel on my phone, ring the reception, and hand the phone to the taxi driver to take directions back to the hotel. Thank goodness for smartphones!"
Active Network | StarCite: IBM's Tech Partner
To learn more about the technology behind IBM’sprogram, we caught up with Betty McNulty, general manager for ACTIVE Network’s Business Solutions Group.
Please give an overview of how the StarCite tool works at IBM.
The process starts with the centralized On-line Meeting Request Form, which collects all meeting details. IBM employees who want to hold a meeting can submit this form through the Web-based application, which is then routed directly to one of two approved event agencies that source venues on behalf of IBM in China.
When the event agency receives an e-mail notification of the request, they connect with the requester to discuss the event in greater detail. The event agency then uses the StarCite Online Marketplace to research hotels and uses the StarCite Request for Proposal template, which has been customized for IBM’s needs, and submits it through StarCite to preferred vendors with a deadline for completion of a response. The StarCite solution has been configured to highlight IBM’s preferred vendors during the sourcing process.
The selected vendors receive a notification via e-mail and can go online to view the RFP, and either accept or decline through the StarCite online tool. The event agency can quickly run a report of all responses received, engage with the client to determine competitiveness, and select and a venue.
The agency then enters the proposed and contracted spend into the budget and the system automatically calculates the savings. Through this process, IBM gains powerful data, which it can use to track spend and savings across all venues.
What were the technology, cultural and/or business challenges unique to China in designing and implementing the tech tools to support the IBM program?
A big plus from the beginning was that the StarCite solution was global in scope and supported numerous languages, and multiple currencies, including the currency of the People’s Republic of China.
The main challenge came from the newness of the Chinese hotel market in general, and awareness of managing group business online. Most of the major business/group hotels in China were built in the past five years, so they weren’t as familiar with online RFP management. The average hotel salesperson in the U.S. checks for their RFPs multiple times during the day. In China, that's not always the case and it might take longer.
What would your company do differently, based on the experience of rolling out the China program?
We continue to learn from every global deployment and market. We see the key to the success of the China deployment due to the fact that Paul traveled to China to meet face-to-face with the IBM stakeholder, the hoteliers, and the event agencies.
The more we can learn and understand about a region’s hotel partners, business objectives, and goals, the better we can tailor our solutions to meet both buyers and suppliers. One of the benefits of the StarCite solution is that it can be configured to a customer’s business practices.
What markets/services do you see growing the most rapidly for the company in the next five years?
We anticipate seeing increased activity in areas such as Asia, India, Latin America, the Middle East, and some Eastern European countries.