Systems such as EvedPay enable both suppliers and buyers to eliminate event spend costs.
Spend management attempts to cut costs at the beginning of the source-to-settle process without considering the effects of saving further down the line.
Meetings and events have a lot of small transactions, which can cost more to process than the money being exchanged.This reality creates a sense of urgency to lower costs.
Many systems try to shift costs to the other guy, either the buyer or supplier, but the costs end up getting bounced back. Great solutions are able to look at the entire process and are able to minimizecosts from both buyer and supplier.
Cost savings is the ultimate goal of any spend management solution, but cost savings can come in a variety of places within the source to settle process within a category. So most people think of the sourcing part of the process as driving a lot of the savings, and that’s true; in other words, using good bidding practices to source a venue or an AV supplier, getting several bids, thus making it a competitive event, as well as making your specs biddable and understandable by the suppliers definitely drives a lot of savings.
But a lot of savings in meetings and events also come farther down the line in the source-to-settle process. The more a spend category has high transactional save costs, the more it can generate savings in the rest of the process as well. So meetings and events have lots of small transactions between lots of vendors, and the actual cost of processing that transaction, whether it’s the purchase order on the buyer side, or the invoice on the supplier side, or the payment in the remittance on both sides, those transactions are often as much to handle as the dollar amount of the transaction itself! So a great spend management solution doesn’t look just at one area, it looks at that entire process and thinks about how can we take costs out of that entire process for both the buyer and the supplier? a lot of systems try to end up shifting costs between the buyer and the supplier. So they’ll tell a great story to the buyer about how much they’re going to save, but they managed to do that by shifting the costs on to the supplier. However, this is not a real solution because everybody knows that the supplier is going to figure out some way to pass those costs back onto the buyer or they’re going to go out of business. The great solutions, such as Eved, look at the entire process and think about it from both party’s perspectives, and pull those costs out rather than shifting them from one place to another.
For example: the p-card or the meeting card is a really useful tool for some types of transactions, but it does have this cost shifting element to it, which is: it’s quite attractive to the buyer, but it can be very unattractive to the supplier. Whereas the EvedPay system balances those two needs to be attractive to both parties.
Talia Mashiach | CEO, Founder and Product Architect at Eved:
There’s over $500 billion dollars that are spent on meetings and events by large corporations, and there’s little to no visibility for these corporations to know what this money is being spent on. To not have that visibility, to not know what you’re truly spending and to not have the granularity, that’s just a huge problem.
Jeanne Trogan | Executive Director of Global Events at Dell:
We were losing track of money and spend, it was falling through the cracks. Quite frankly, the biggest consequence of that is that we weren’t running our annual budgets very well. Secondly, our event managers were spending way too much time on manual processes and working across multiple tools.
Talia:
What Eved really does is the actual ordering, invoicing and payment process which happens on our platform. We are creating event commerce as a category, the automation of buying and selling of meetings and events.
I saw this opportunity to be able to automate the workflow within the planning process so that therefore you create the efficiencies, you also get the visibility into the data and you create compliance around a process.
Jeanne:
Having visibility to where we’re spending and with whom we’re spending has allowed us to consolidate those investments with certain vendors. Which in turn gives us volume discounts, which in terms gives us bang for our buck. That’s incredibly important in an era where just about every company is expected to do more with less, and because of Eved, we’re actually able to do that.
Talia:
Dell really partnered with us to let us come in and understand what their problems were, so that we could really figure out how to solve them. We wound up with a product that is solving a problem not just for Dell, but for all these other customers as well.
J.B. Pritzker | Managing Partner at Pritzker Group Venture Capital:
Entrepreneurs need someone to take a chance on them and Dell was willing to do that. Their reason to partner with Eved is the same reason we choose to invest in Eved and that’s Talia’s qualities and the fact that Eved has built technology that’s enormously meaningful to large enterprises.
Jeanne:
Specifically in the case of Eved, it really worked out that a woman owned business had the best idea and solution, and both Dell and Eved are winning because of that partnership.
My name is Bob Solomon and I’m a Board Member of Eved. I’ve spent the last 6 years consulting to B2B software platforms and networks. Prior to that I spent 10 years building and managing the Ariba Network, which helps connect suppliers and buyers for major enterprises around the world.
So Bob: How can procurement, finance, and the business, work together to solve problems inherent in a spend category while also achieving their individual goals?
This is a great question because procurement, finance and the business have three entirely separate goals for any given spend category.
Finance wants to make sure that transactions are:
Legitimate
Recorded properly
Allocated to the right cost centers/GL codes
Procurement is primarily concerned with:
Finding the right suppliers
Contracting with them
Ensuring that the business is using those suppliers, and paying the right prices
The business, or planner, is primarily concerned with:
Running greats events
Building a solution that meets those three divergent needs has been a real problem for a long time. In terms of the history of supply chain management solutions, the first solutions were all oriented to accounting. There was no Internet, so you didn’t have to worry about interacting with the supplier other than via phone or fax. Therefore, the ERP lead the way and these were solutions for finance. In the mid 90s with the advent of the Internet and procure to pay solutions, you had new solutions that were built largely for procurement and then integrated to the ERP.
The first generation of procurement solutions did a good job of helping the procurement department identify, negotiate, lock down contracts and transactions with suppliers. However, they weren’t really built with the user in mind. The latest evolution has been to solutions such as Eved that try to meet the needs of procurement, finance and the business.
So in category after category whether its travel, temp labor or in this case meetings and events, we’ve seen this third generation of solution that has many of the aspects of the first two generations. However, this new generation adds an interface that makes it easier for the business to use, and adapts to the particular needs of the category like meetings and events.
Following are seven spend analysis reports you need to successfully analyze and act on your meeting and event spend. Whether you’re in corporate procurement and experienced with procurement but may not be as well versed in the nuances of meeting and event spend, or you work for a smaller destination management company and aren’t yet as familiar with spend analysis, this blog is for you!
Spend by Category
This report will provide total spend by category, such as Decor, Food and Beverage, Transportation, etc. It should allow you to drill down to the lowest level available, meaning that you can view your spend at the lowest item transaction level, and not just overall by supplier, or a total from a Purchase Order.
Why is this important? You may want to compare it to budgets, forecasts, or contracts to ensure that you aren’t overspending, or to ensure that you’re capturing all of your spend. If you budgeted $125,000 on decor, but the report states that you spent $350,000, you know you have a problem. This report should provide historical data that can act as benchmarking data, as well as trending data. You should also track which categories contribute the largest percentage of your spend. And a spend by category report with accurate, up-to-date numbers will also give you that much more buying and negotiating power with your suppliers.
Spend by Supplier
This report will provide total spend by supplier, such as each individual DMC, hotel, transportation company, etc. and will depend on the accuracy of the data. Have all suppliers been grouped and normalized, meaning you’ve fixed all of the various spellings of your suppliers? How many different ways have you spelled Hilton/Hillton/Hilten? Have all parent/child relationships been linked? In other words, do you have all the Hilton subsidiaries linked and grouped together so that you’re getting an accurate total of all your spend with that supplier?
Why is this important? This report will automatically identify your top suppliers by spend and the percentage they contribute to your overall spend. Are you spending significantly more with one hotel chain over another? Is there a contract opportunity with this hotel chain? Are you adhering to your existing contract terms with this hotel? What are the contract, discount and payment terms for those suppliers? Does it make sense to consider a relationship with a DMC consortium?
Spend by Month
This report will provide total spend by month.
Why is this important? This may not be important to event managers, and of course it will fluctuate seasonally, but in terms of costs, budgets, and forecasts, this is an important report for procurement and finance.
Spend by Location
This report will provide total spend by a location, or for your specific corporate structure could be teams, products, offices, regions or countries.
Why is this important? This report will identify which location, team, product, region, etc. contributes the most to your total meeting and event spend. Where are you hosting events? Are certain locations more or less expensive for hosting events? This report will support an analysis of costs and revenue and identify any outlying issues or red flags.
Maverick Spend
This report will provide spend from non-preferred or un-approved suppliers, or depending on the organization, it could also be spend outside of the eProcurement system, outside of an approved catalog or marketplace, or items not included in a contract.
Why is this important? Any spend that is designated as maverick spend will cost the company significantly. Spend with a non-preferred supplier may be less, but a rebate opportunity was missed, or the processing costs are higher. Spend outside of the eProcurement system will result in additional processing and resource costs. Spend outside of an approved catalog, or not included in a contract, will cost more than items that have been negotiated with your suppliers.
Pareto Analysis
This report will provide the 20% of suppliers that make up 80% of your spend.
Why is this important? Some companies only manage the 20% of suppliers that make up 80% of their spend, since this is the easiest to manage – a small number of suppliers that make up a large percentage of your spend. The remaining 20% of your spend is referred to as tail-spend management. The cost and resources needed to manage this bottom 20% often doesn’t offset the savings realized.
Opportunity Analysis
This report will provide an analysis of the savings opportunities available. It may include supplier contracts that are about to expire – which could lead to better contract terms than previously negotiated. It may include categories or items tied to a large number of suppliers – which presents the opportunity to decrease the number of suppliers. Other opportunities may include vendor rating reports, allowing you to analyze the risk associated with certain suppliers and their alternatives.
Why is this important? Providing a report that is specific to this information allows you to easily make savings and cost decisions that will affect your bottom line.
Too many companies in the meeting and event industry still rely on outdated technology to run the business under the mistaken belief that “if it ain’t broke, don’t fix it.” Microsoft Word launched in 1995, while its companion Outlook arrived on the scene in 1997. That means that if your company is using Word for proposal, purchase order and invoice generation, and primarily sending these documents to clients via Outlook or (dare I even mention?) fax, then your current internal business process looks no different than that of an events company from almost 20 years ago.
It’s past time for the industry to embrace cloud computing and more robust technology platforms, but if you still need a nudge into the future, here’s why your business needs more than Microsoft Office to survive and thrive in today’s world:
Centralization of Meeting and Event Program Data
Team collaboration is vital in today’s “I need that 5 seconds ago” business climate – no need to remember to CC or BCC, don’t waste time asking and re-asking basic informational questions, just go and grab the data from the cloud.
See how past programs have been successful or unsuccessful for other employees without having to wait for their response.
New employees have easy access to company info instead of trying to catch up.
Out of office and emergency coverage problems are over – have to step in for a colleague who had to miss work due to a family emergency on the day of a key client call? No worries – all the correspondence and program info is in your centralized technology solution.
Reconciliation is easy when everyone is agreeing to the same format, version and type.
Easy Executive Management
24/7 access to data and employee activity – see exactly the same version of the proposal that was sent to the client, always pull the most up to date purchase order, pull financial reports at any time, in any time frame, with data you know is real.
No more requesting documents from employees and waiting on them – grab what you need, when you need it.
Keep employees accountable and get information beyond self reporting – are they using non-preferred/approved suppliers? how are they interacting with key clients? what is their rate of awarded business? Reduce time spent worrying on these key questions by having your business interactions at your fingertips.
Back Up is Automatic
Employees come and go. Losing them may mean losing their inbox.
Emails get deleted and conversations can be lost – instead all data in the cloud stays in the cloud, always available with the click of a button.
Eliminate Cumbersome Inbox Searching
No digging in your inbox for that email from a key client – it’s in the system and tied to the specific program you’ve been working with them on.
No possibility of information getting hidden in a spam folder or accidentally being overlooked – use your dashboards to keep an eye on high priority activity.
Cloud Computing is On The Go, Too!
Manage on the go just as easily as you would your email.
Clients and suppliers have electronically stored information on the web, giving them a point of access at all times to program information.
You can still quickly share and send documents to team members.
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