Micemaster corporate risk
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Reducing Corporate Risk with MiceMaster

In many corporates the authorisation of MICE orders and venue contracts are completely out of control- employees are signing hotel contracts to secure room inventory with little or no understanding of the legal ramifications. Management cancel conferences with no understanding that a 100% cancellation fee is now due to the hotel. ‘Hundreds of thousands of Rands are paid out for services not rendered’ says MiceMaster. The system combats this by pushing the quote essentials through to the authorised personnel who are able to make an educated decision before an order is issued. This allows authorisers to question why a non-preferred PCO is being used or why a more expensive quote for the same venue is being procured.

 

At our system demonstration, MiceMaster revealed a live quote where three preferred partner PCO’s had quoted on the same properties with exactly the same detailed brief. The variable between the highest and lowest quote was 39% and these were PCO’s with contractual mark-ups agreed with the client!

 

Adding further compliance to corporate policy, the ERP or procurement/order numbers and codes can be inputted as orders are issued aiding reconciliations. ‘Complete ERP integration is high on our future development plans’ says MiceMaster.

 

MiceMaster users eat conference organising for breakfast

As opposed to dying of email and administrative overload, a MiceMaster corporate user, even if inexperienced, becomes a formidable, fast, detailed, efficient and valuable commodity in any business. In minutes a complex, detailed brief is constructed from scratch using the system’s user-friendly 10-step prompt interface. If any of the event details change: dates, number of delegates, city etc. as they so often do, the user does not waste time starting the re-brief process. He/she is able to open/edit and resend the updated brief to the same or new venues and PCO’s. The user can request quotes from venues directly, PCO’s or both.

 

When the detailed brief arrives at the venue for quoting, the recipient simply accesses MiceMaster via a unique hyperlink and completes the structured quote template that auto-calculates costs driving transparency and detail in the quote structure. If a venue wants to hide AV costs behind a sub-total and not be specific, it will easily be picked up by the organiser. If the venue’s room rate has been marked-up by a PCO in order to hide margin that contractually they are not entitled to, MiceMaster will help the corporate planner identify where the double-dipping is taking place.

 

The user also selects a date field by which they require the quotes to be submitted so that venues know how and when to react. As the quotes are received, MiceMaster alerts the users who are able to easily compare apples with apples because MiceMaster supplies identical quote formats in the system. When sufficient quotes have been received, users will trigger the authorisation process that will lead to an order which is also placed via the system.

 

As MiceMaster says this is not a glorified hotel directory that triggers an email to a venue to quote, of which there are several globally, this is a complete procurement tool designed to save monies and give business to suppliers who deserve the business.

 

Building Budgets and Pricing Intelligence

As MiceMaster goes about the process of sourcing quotes and issuing orders, it is continuously building a library of critical reports. The system auto-calculates what they call a ‘CFD’ or Cost per Delegate on every conference. This benchmarks what companies should be paying for standard conferencing models i.e. a one night, one day, facilities, food, drink and conference. This data will trigger ‘spend abuse notifications’, shutting down rogue expenditure further.

 

Average CFD rates are continuously tracked and over time a company can easily build a picture as to where value lies and where abuse is taking place. All this MIS consolidates to create a barrage of data that will assist in achieving procurement negotiation goals.

 

Corporate Cost Savings

MiceMaster functionality offers companies numerous opportunities to save on MICE costs. Managing maverick behaviour and rogue suppliers is near-on impossible without a system and the grid below indicates the various ways in which MiceMaster claim they can create saving opportunities. It makes sense in so far as if you tighten-up the preferred partner strategy and authorisation process and then show transparency in supplier quotes, you are a long way ahead. Just making secretaries, PAs and travel arrangers far more efficient results in substantial savings (note: these are MiceMaster’s estimations of savings).

 

MiceMaster says the PCO vs PCO image below is a true reflection of the contracted PCO’s competing with the same detailed brief on the same property. Identifying 40% savings must appeal to many a Chief Procurement Officer.

 

MiceMaster Future Development

Plans are in place to further develop the system to indicate to suppliers which aspects of their quotes are competitive and which are not. ‘We had a scenario recently where the PCO quote was astronomically high; unbeknown to the company it was the flight component the PCO had sourced that was precluding them from receiving the order’ says MiceMaster. The plan is to identify where pricing issues lie and allow the supplier to have another crack at the quote. Currently the supplier can easily override their previous quote but the functionality will be refined.

MiceMaster reports that a client has also requested ‘Reverse Auction’ functionality which, while commonplace in other procurement areas, has certainly never been available in the MICE space so that venues can bid on conference business.

MiceMaster there is a rat in the mice kitchen
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The financial challenges of MICE business


…There’s a RAT in the MICE kitchen

 

A three day conference, twenty two delegates and Professional Conference Organiser (PCO) management fees of R357, 000!  A rogue PCO being awarded millions in net-commissions a year with a staff quota of five, still asking for additional margin from the corporate. A five star property found to be quoting vastly reduced DCP rates for an executive conference- when challenged it was identified that cheese sandwiches would not suffice- they announced that perhaps their executive DCP rate of R560 would be more appropriate. The problem: recently logged real-cases in the realm of MICE. How? Excessive commissions, mark-ups, management fees and overrides: all too common in the current world of MICE. Corrupted with rogue expenditure, so called preferred arrangements and constant weekend site inspections™, conference business today is ultimately steered by acquaintances and suppliers or close relationships™, which is seldom reported.

To be frank: the current realm of MICE, be it the corporate dealing with the venue or via professional conference organisers, is an uncontrolled nest of rogue procurement habits. MICE, however unregulated, is the most profitable, fastest growing sector of corporate travel business; ironically in an economy where one would think expenditure control was a priority for businesses.

So where does MICE procurement go wrong? The process is flawed. When a secretary, PA or an in-house travel arranger is tasked with organising a conference the original briefing hardly amounts to much more than a dozen email bullet points, inherently giving the suppliers carte blanche. Suppliers then intentionally submit vague quotes, omitting to give detail, which would result in the lowest possible Rand total for the conference. Once the client is contractually hooked, the  grey areas are revealed which entail additional services and charges, that were never specified in the first place.  These extras suddenly bombard the corporate, and is eventually blindly signed off by a supervisor when the frantic corporate organiser needs immediate signage on just another expenditure. The additional costs are never recorded and suddenly neither procurement nor finance know where the millions of Rands which were never originally allocated to the conference went. This flawed practice is fuelled by the corporate’s solitary Travel Management Company (TMC) policies as well as their Self-Booking Tools (SBT) which are pre-programmed with their procurement strategy. The corporate’s MICE approach is more often than not left up to an anonymous’ junior corporate employee to choose which hotel/venue or PCO gets the corporate’s business with no volume-based discount strategy over flights, hotels and car rentals in the corporate travel realm. Again, the supplier merely throws in an arbitrary low quote in order to be awarded the conference.

There are a number of operators who offer products to facilitate the vague MICE enquiry process. They offer fairly comprehensive hotel and venue listings to whom one can write a brief. They also facilitate, free of charge, the delivery and retrieval of said conference quotes. But can they provide such a service to corporates or afford to do so for free? No. These operators mark up the services en route to the corporate and therein lies their slice of cheese. Realistically such venue directories and facilitators do nothing to control the rogue behavioural patterns of South Africa’s MICE industry.

Enter MiceMaster, with the pay-off line: Who Moved My Conference. The first procurement tool designed to rein in costs and save corporates millions of Rands. Designed in conjunction with corporates, hotel groups and PCO’s, the system is unique in its holistic approach. Deployed into the corporate environment, MiceMaster firstly helps companies identify their procurement strategy in order to streamline the process efficiently. The corporate’s preferred suppliers are loaded onto the system, ensuring that anyone using the system to procure conferences is in no way confused as to whom they should be using as part of the corporate’s greater strategy. This is done in terms of primary, secondary and tertiary suppliers from hotel groups, venues, PCO’s, catering and Audio Visual companies, TMC’s, transfer companies and other service providers. The system then guides the corporate user as it assists them to build an accurate brief that suppliers find refreshingly detailed, saving them time and effort in communicating with the organiser to determine their needs via telephone or email.

MiceMaster, as per an airline booking system, runs the user through a sequence of platforms helping them to identify their needs; culminating in an overview or final comprehensive brief which is then ready to be distributed to the company’s preferred suppliers.

MiceMaster can conservatively save corporates over 10% of spend in year one with escalating savings as the procurement strategy takes effect. That is a big chunk of change that any procurement department would like to deliver to the board.

If you are a CEO, MD, Board Member, Shareholder, Chief Procurement Officer or Business Owner and with substantial expenditure on MICE, you need MiceMaster. With MiceMaster, venues and PCO’s who would previously never get the opportunity to quote and pitch to large corporate businesses also get a shot, transparently opening up the market and corporate to new and valued financial prospects. MiceMaster is also for the people at the coal face who slog away organising conference after conference, drowning in emails, phone calls and admin. MiceMaster speeds up processes, reduces admin, increases efficiencies, helps them buy better and become indispensable as a MiceMaster user overnight.