My colleague, Teran Andes, US Practice Leader, Procurement and Operations Advisory, Health Care Life Sciences at KPMG, wrote a compelling article on the significant cost savings and benefits of implementing a spend management solution for the meeting and event category.
View full post here.
“It’s a dirty little secret of meeting and events planning business, but M&E organizations are driven by throwing the “best event ever”. That being said, it is highly likely that at the end of the day planners will not have a full and detailed grasp of how much was spent and what, at a very granular level, is needed for the next event.
It may seem surprising that meeting and events planners may not realize what they are spending such an enormous sum of money on. The challenge they face is that meeting plans change so much from plan to execution and the cost of change is buried in venue and hotel invoices with virtually no level of detail. The priority of meeting and events planners is to pull off the “best event ever” without participants being made aware of the mechanics behind it.
Meeting and events spend, has a lot of moving parts and levels of visibility. There is spend such as AV, transportation, catering and lodging, plus cost of emergency items. Event planners are focused on maximizing the attendee experience at the expense of the annual meetings and events budget. As procurement professionals – we can’t help event planners source the best portfolio of products and services, because it is very challenging to understand, at a detailed level, what was bought and whether the pricing, markups and rebates were appropriate.
Without visibility into this spend, Procurement finds it difficult to properly partner with their peers in Meeting and Events to help them deliver the “best event ever” while maximizing and extending their overall annual budget.
These issues can be addressed through enhanced processes designed to capture the meeting spend up front, manage the change process throughout, communicate easily with suppliers, and streamline the process from budget set-up to final payment and settlement.”
See the full list of benefits that a spend management solution can have on the meeting and event category.
Each year, finance and procurement professionals are met with the same challenges and pressures — save money, reduce risk and improve efficiencies. Your meeting and event category may just be the diamond in the rough that can help you achieve significant wins in each of these areas.
Large corporations spend millions of dollars on events each year, but why? Live events are an important marketing channel and a major revenue source. They range from internal meetings to large external conferences and promotions. For as large of a category as events is, it operates shockingly inefficiently. The procuring of services is largely done offline using Excel sheets, with little to no consistency across planning teams or even within teams. The inefficiencies trickle downstream to invoicing, reconciliation and payment, contributing to lack of detailed spend visibility. With a lack of visibility, a lack of cost savings opportunities is inevitable. After all, you can’t leverage spend that you can’t “see.”
But why is this category so challenging to manage? There are three main elements:
· A unique supplier base. A large number of suppliers are required for any size event, many of them one-off instances and potentially located internationally. The high quantity and sporadic vendor usage increases compliance risk — how confident can you be that every supplier is approved? If your payment method is a credit card, that only further increases exposure.
· The dynamic nature of the industry makes it a hard fit for traditional ERP systems. The event category exposes the shortcomings of traditional ERP systems. Traditional ERP systems were built around SKUs, which are not intended for service industries.
· Supplier payment processing. There are a lot of data sources in events — including p-cards, Excel, various supplier systems, project management systems and niche meetings management systems — that prevent companies from seeing collectively where dollars are being spent. Read full post on Spend Matters.
Spend Matters, Eli Lilly & Company and Eved teamed up to discuss how the event category is currently manage. Using technology, Lilly was able to achieve visibility through event category transformation. Check out the full webinar.
This LinkedIn article was forwarded to me and I got to thinking about how this information related specifically to the meeting and events industry.
Goodyear Tire & Rubber says the cost of writing a check is as much as five times that of an electronic payment, but the company still pays more than half its invoices with checks because it’s the only form of payment easily accessible to all of its business partners.
One of the things we struggle with at Eved when working with new clients is changing behavior. When Talia Mashiach formed Eved, her mission was to make processes more efficient for event planners, procurement, and the suppliers that they work with. And now, even with the availability of online payments through Eved, clearly providing efficiencies throughout the supply chain, many are resistant to implementing these new processes. Not because it won’t save them money, but because it requires a change in mindset and behavior.
Each check costs U.S. business between $4 and $20 based on the price of the check and shipping, plus the time employees spend writing, mailing, collecting and reconciling the check.
How many checks do you write for your business? How many checks do you receive? Multiply that by even $4 per check, let alone $20 per check, and the cost of paper checks to your organization is clear.
Are you still relying on paper checks? If so, why?
image credit: Why Can’t We Get Rid of Checks?
(Posted by JOY MCCAFFREY on Mar 14, 2014)