Richard Wooten controls spending in the neighborhood of $400 million as the director of corporate travel for Lockheed Martin Corp., but there was one area that always struck him as out of line–the $100 million of costs related to meetings that Lockheed organized for such constituency groups as shareholders, its board of directors and employees. Last year, he decided it was time to drill down, so Wooten approached U.S. Bank about participating in a Visa meeting card program.
Of course, a portion of the spending for Lockheed meetings was already being put on cards of one sort or another; the bulk, however, was still coming in the form of paper purchase orders or invoices for such items and services as hotel rooms and group lunches. But the Visa meeting card program allowed Wooten and his meeting planners to segregate and automate the entire spend for all meetings. It also let them extract specific charges and allocate them to various departments or budget lines.
After a year with the meeting card program, Wooten has unmasked categories in which Lockheed has been spending too much–such as audiovisual and catering–and he is implementing strategies to rein them in. "We had a pretty good idea that some [spending] was exorbitant, and when you look at the data, it verifies it," he says.
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In many ways, meeting card programs are merely refinements of the kind of automated accounting made possible by corporate cards used in procurement and for travel and entertainment–but converts like Wooten will tell you, they are pretty handy refinements. Introduced in 2000 by American Express Co., meeting card programs were created to capture a slice of the $30 billion meeting industry and as a logical extension of the increased specificity and ability to segregate various types of spending that were increasingly being asked of corporate card programs. "Meetings are seen as the last area of spend that is uncontrolled, in terms of being unmonitored by
financial planners," says Phillipa Wilson, director of corporate card marketing at American Express.
Admittedly, the big benefits offered by meeting cards–online reporting tools, paperwork reduction and the ability to make payments on site without having to wait for approval from headquarters–are the same as those offered by more conventional corporate card programs. But segregation of spending data by event and type can only really be obtained with an individual program. The segregation provides meeting planners with invaluable information, which they can use to negotiate better rates from suppliers, just as corporate travel directors have been doing for several years in travel and entertainment expenses. "If I spend $1 million with Hyatt or $2 million with Marriott, I can go to those hotel chains and say to them: 'Look, how much we've spent! We want to work with you next year on a master agreement. Where can you give us concessions upfront on all of our meetings?'" explains Michele Snock, Americas manager of global meetings at Cisco Systems Inc., which spends $50 million a year on meetings. Today, three years after signing up with American Express, Cisco typically saves between 10% and 15% on its annual meeting costs through this negotiation.
Given that meeting card programs are no more expensive than most card programs, the one obstacle to adoption tends to be a company's bureaucracy. Instead of a variety of authorizations and signoffs, the card provides the internal controls and ground rules for meeting planners, and not everyone is that comfortable giving up the reins–even if it ends up costing less.
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