MiceMaster is a web-based corporate procurement system that is custom built to allow corporates to enforce transparency of supplier quotes and regulate DCP rates, venue costs and other supplier expenses relative to MICE (meeting, incentive, conference and events) business. The MiceMaster system allows planners, authorisers, procurement people and finance personnel to quickly identify where true value lies in multiple venue quotes, in real-time. MiceMaster also enforces procurement strategies to save companies substantial monies, while rewarding quality, professional suppliers with increased business.
Simultaneously, the MiceMaster system will quickly expose PCO’s and other suppliers who are contracted to corporates at an agreed percentage, but may be hiding additional margins in management fees, commissions and overrides. Users who practice maverick spending, who are directing business in ‘favourable directions’, will also immediately be flagged by the system.
MiceMaster conservatively aims to save corporates 12,75% of MICE spend in year one, over 20% in year two and depending upon how aggressive the corporates’ procurement department and travel managers are, 28% in year three.
These are aggressive targets but as ‘Andrew Millar’ – developer of the system- says MICE, as the fastest growing travel sector, is plagued with rogue PCO’s, non-compliance, excessive mark-ups, inexperienced event planners, vague quotes and little MIS. The transparency that MiceMaster delivers will achieve these targets.
How long has it taken to build?
‘Millar’ recalls one of his partners over two years ago remarking ‘We have a simple solution that should only take a few months to build’. Over two years later the business still has an extensive development list being tackled by their webmaster ‘Irene Venter’ whom states that 90% of these new developments have been actual requests from Chief Procurement Officers in large corporates looking for additional functionality (such as the ability to reverse auction a conference RFP). ‘This is not a prototype – we have walked a long road with several large organisations while at the same time consulting with large hotel groups to develop MiceMaster. Much of the functionality has been developed by working closely with numerous corporate travel arrangers, PCO’s, PA’s, procurement heads and financial directors’, says Venter.
Why did you see this gap in the MICE space and explain why you think this area is under-serviced?
As opposed to other corporate travel sectors (such as airline, accommodation and car rental) corporates, travel management companies and self-booking tools (SBT’s) implement and enforce strict travel policies to control costs. Suppliers and TMC costs have long been subject to much scrutiny with complex procurement strategies, regular supplier negotiations and ever-advancing technologies and tools all of which are designed to drive cost savings in the above mentioned travel sectors while the MICE sector has been left to literally run amok. The enormous MICE spend generated by large corporates from all sectors is left almost completely uncontrolled.
‘We see large businesses with hundreds of suppliers who have very little idea where their millions of Rands are being spent, by whom and for what services’, says Millar.
Furthermore MiceMaster reports that the sector’s procurement processes are entirely flawed- whether secretaries, PA’s or travel arrangers are initiating an external conference or event directly with a venue, or contracting via any number of PCO’s, the process is totally exposed to abuse and rogue expenditure.
MiceMaster views the following as a few of the reasons why this sector is under-serviced:
Inexperienced secretaries, PA’s and internal event planners managing MICE business RFP’s tend to create vague email briefs with very little detail, omitting numerous costs at the start of the planning process.
Non-descript, inaccurate venue-direct and PCO quotes being received in multiple formats, rarely containing detail and the true costs of the event or conference with many categories such as catering being lumped into a single total. This makes it impossible to see what services and facilities are truly being offered.
Few expense- and contractual sign-off policies with junior secretaries signing hotel and PCO contracts with no understanding of the financial ramifications should an event be cancelled and without the authorisation to actually sign-off the agreement in the first place.
No budgets set pre-conference as historical data is not available, hence there is no benchmark to compare to as costs escalate.
Special favours extended to organisers at all levels by venues and PCO’s alike with many suppliers being friends, relatives or close relations.
No post-conference reconciliation process, numerous unexplained supplier costs and very little in the way of MIS for procurement and finance departments to control and analyse spend.
‘There are a couple of other systems available that are supposed to help manage business events but we see these more as glorified hotel directories pushing vague briefs and redirecting grey, non-descript quotes’, says Millar. ‘MiceMaster is not a delegate management system. It is a complete MICE procurement system that addresses many of the challenges companies face in wanting to contain business event costs’.
Give me a sense of how much ‘rogue’ spend there is out there, in this space?
‘We know rogue MICE spend issues are rife throughout the industry having consulted with numerous parties including SAACI, CIPS, Asata, corporates and PCO’s’, claims ‘Millar’.
‘This rogue MICE spend not only adversely affects corporate spend, it also undermines many reputable, professional suppliers actually offering good value (be it a PCO or venue) as contracts regularly are awarded because of favouritism’, says Millar. ‘The result o this is that suppliers, who are frequently less than qualified and are hiding excessive mark-ups, are being awarded millions of Rands of business’.
‘We had a live quote scenario recently where four PCO’s all contracted to the firm at a 10% management fee, quoted on the identical very tight MiceMaster brief and the one PCO was 39% more expensive than the lowest quote for the same venue, same services and same facilities. That is what MiceMaster does well: it forces transparency and allows users to easily compare apples with apples’. MiceMaster agrees that it is not always about the lowest quote and quality of services and expertise are critical, they claim their system helps redirect business to these quality suppliers, not just drive down rates and lower costs.
‘We encountered a large TMC who had purposefully dropped their commissions to zero percent and who still could not win the business’, further proof of the sector’s uncontrolled buying habits.
What has been the initial response from the market?
MiceMaster claim that they finished Phase 1 development in September 2015 but have been actively engaging companies for almost a year to adopt the system. ‘We currently have seven high profile, large corporates who are in various stages from interest to implementation. Some have used the system for live conferences, others are still presenting the solution to management’, says Millar. ‘It is a long sales cycle and we are very cogniscent that this can be seen as a disruptive business model which needs to be deployed carefully’.
They report that they have had push-back from some suppliers, not unexpectedly either, but others have welcomed the system as it potentially has the ability to bring them more business. ‘This cannot be a cart before the horse scenario, we cannot over-promise and under-deliver which has been the case with so many travel technology systems in the past. If we on-board the suppliers too early and we do not deliver conference RFP’s, the hotels, venues, PCO’s and other suppliers will not be enamoured. We know we have the only system in the market both locally and globally. ‘Recently a senior procurement head in a large financial management firm stated that he had been looking for a system like ours for five years’, claims Millar. MiceMaster are currently engaging with various parties including GDS’s to accelerate local and regional market share and to deploy the system .
What are your overall thoughts on what role technology can play in the business travel space, in terms of providing solutions?
Having sold numerous self-booking tools and other web-based platforms into corporates for years it is clear how technology adds a huge amount of value to the coporates, TMC’s and suppliers alike.
‘Coming to market with MiceMaster seems surreal in that there is nobody else playing in this space’, says Millar. â€œNobody likes being ripped off and with MICE the playing field is far from level. The procurement of MICE is a unique process – unlike buying air or accommodation services or even office supplies for which even the big ERP’s offer a workable solution.
MiceMaster know they are not going to be too popular in some travel industry circles but if the one constant in life is change, this system could well be a game changer for the MICE sector.