Gelco SmartTalks – bringing you industry trends and topics

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Here is a brief summary of recent SmartTalks programs. To listen to full-length presentations, click here.

Best Practices in T&E Expense Management: Visibility and Control of Meeting Spend – October 2005

Ernest Guerra, Director of Global Travel Services for American Standard Inc., shared American Standard's strategy for achieving visibility and gaining control of meetings management, an area of significant spend for the company.

Meetings are an important part of American Standard's business culture. Company employees participate in over 300 meetings annually. Nevertheless, prior to automating meetings management, meetings expenses consisted largely of unmanaged spend. This is a common trend across the country—it is estimated that annual unmanaged meetings spend amounts to $50 billion. Automating meetings management has provided American Standard with exceptional visibility and control, resulting in savings of more than $320,947 from their small meetings hotels program implemented two years ago and $1,218,423 in overall program cost avoidance over the last three years.

Cost avoidance was one of American Standard's principal objectives when the company decided to bring meetings management in line with overall T&E expense management. To take advantage of free or discounted services from hotels, A/V equipment vendors and other meetings suppliers, the company needed to know precisely what and where it was spending its meetings dollars. Implementing Gelco's automated expense management solution had given the company complete insight into T&E spend and Guerra was eager to take advantage of the same benefit for meetings expenses. Integrating meetings management with T&E expense management has enabled American Standard to standardize costs, streamline processes, and create effective company-wide meetings management policies.

Guerra recommends that companies considering a move to automate meetings management expenses begin with support from top level management. Involving stakeholders at every level from company executives to meetings planners is fundamental for successful implementation of the program. It is equally important to be realistic about the time frame for implementation. It can take from several months to several years to fully implement the program. An effective communications strategy is essential both to inform employees about the implementation process, as well as to explain new policies and guidelines.

American Standard now benchmarks meetings management practices and closely monitors its spend and trends. Bringing meetings management in line with overall T&E expense management process has a measurable effect on the bottom line.

Vendor Negotiations: Know What You Want and Ask for It
November 2006

Cindy Shumate, Director of Travel Services for The Estée Lauder Companies, described strategies for win-win negotiations with vendors.

Total domestic and international travel spend for The Estée Lauder Companies amounts to more than $100 million annually. Insight into travel spend data enables the company to negotiate from a position of strength and flexibility—since implementing Gelco's automated T&E expense management solution, Estée Lauder has reduced travel agency transaction fees by 60%, reduced average daily hotel rates by 4% (the industry trend was toward increases of 5-7%), and reduced the average airline ticket by 16% for domestic travel and 13% for international travel. Shumate considers a senior level company-wide mandate—employees must book travel through the company's preferred travel agency or they will not be reimbursed—to be a significant related achievement.

Shumate advises companies wishing to improve vendor negotiations to:

• rely on accurate data (quarterly reports from vendors, travel agency reports, corporate charge reports, and on-line expense reporting documents – often the most comprehensive data set)
• analyze data strategically (where are the top dollars spent, who spends them and how)
• review vendor categories (air, hotel, car services, car rental, travel agency)
• refine negotiating methods (reveal your supporting data upfront; know your "walk away" point before you start; know what you need; be bold and ask for what you want, but know what you can give up; stick to the facts; don't negotiate to the breaking point, unless you have to; and above all, be fair)
• partner with purchasing and stay involved in the process; communicate and monitor policies to help travelers comply and to help them benefit from the best deals (and don't forget to ask for feedback); and report results to senior level management.

Negotiations with a new vendor represent the beginning of a relationship; working to achieve everyone's key interests will bring the best results. Shumate's experience has proven that negotiating in a positive and friendly manner, embracing the process, and changing strategies when different outcomes are needed result in success.

The key to improving vendor negotiations is having the right information up front. When companies track and evaluate preferred vendor compliance and spend performance, they are equipped with the data they need to implement strong policies and negotiate volume discounts and great rates.

Also, check out the January 2006 SmartTalks on Global Travel Management: Where to Begin