MiceMaster
,

Disrupting the MICE industry

Anyone who has watched the television show Dragons Den™ where would-be entrepreneurs pitch their ideas to a panel of successful business people would have seen that not many new business concepts hold water. At the same time, if one looks at information available on venture capital for new businesses, the appeal for investors seems to be what they commonly refer to as disruptive business models i.e. Uber or Airbnb that challenge traditional business models.

The MiceMaster business concept offers an elegant solution, if not the only solution, to the age-old issue of how to control the hundreds of millions of Rands that corporates spend on external meetings, incentives, corporates and events and can at the same time be described as a disruptive business model. While corporates will save a lot of money by implementing the system, suppliers of MICE services are going to find it very hard to hide anything that is not a fair mark-up, a contractual commission, margin or management fee.

Running on the MICE wheel

MICE is currently the fastest growing travel sector in South Africa. For many companies monies spent on MICE business remains a vague unknown amount procured via laborious, manual processes with very little sign of sound procurement strategies. When asked about volume of spend, many companies enter into a high-end vs low-end debate because MICE spend reporting is (more often than not) non-existent and companies cannot commit to a total spend. Furthermore, a large corporate may try and reduce the number of preferred PCO’s but parallel to this hundreds of suppliers still exist with staff continually adding more to their shot-gun procurement strategy.

Bad briefs equate to massive overspending

Booking a conference is frequently left to the secretary, PA or internal travel organiser to choose whether he/she will use a particular PCO or contact a hotel directly in order to source quotes. At this stage the process is already flawed as favouritism, such as free week-end stays, are commonplace. Because the email or verbal brief is often vague, it gives the venue or PCO license to quote on the minimum amount of services in order to keep the quote totals as low as possible improving their conversion odds. Venues and PCO’s leave essential services like parking, on-site management and specific catering needs off the quote totals in order to keep the total amount as low as possible. For example: sub-totals are bundled as catering™ but there is no detail such as extra costs billed for Halaal or additional drinks that fall outside of the DCP rates.

Paradoxically, if a venue or PCO responsibly includes all the extras they are compromised as the event organiser cannot compare apples with apples within the myriad of quote formats received. Missing items perpetuate confusion and it becomes impossible to see where true value of the quote lies. MiceMaster told us of a 5 star hotel who was discounting their DCP (daily conference rates) to win business but if you wanted anything more than a ham sandwich for lunch, then you should have requested the Executive DCP rate if you wanted a hot meal!

The result of this is that the event organiser issues the order based upon a misleading quote total and then the long list of additional charges start to appear that annihilate budgets requiring multiple authorisation of unforeseen costs. Even long after the event has taken place corporates are unable to reconcile costs.

MiceMaster builds and manages MICE procurement strategies

While corporate air, hotel and car spend is locked down tight with complex travel policies and self-booking tools, suppliers are frequently forced into volume-based negotiations to drive down rates and increase override deals as part of the on-going procurement strategy. MiceMaster manages MICE procurement strategies to achieve the same:

Procurement departments are given access to the MiceMaster procurement module and in conjunction with MiceMaster are able to pre-program the system to not only favour preferred partner suppliers, but also to consolidate MICE spend where volume-based discount negotiations and BBBEE procurement are to be had.

At the click of a mouse procurement is able to manage preferred buying through the system, add a supplier or immediately shut down a rogue supplier that is found to be either over-charging or delivering inferior services. The following supplier categories are pre-programmed and selected according to preference:

– Hotel groups

– PCO™s

– Catering companies

– Audio visual companies

– Travel management companies

– Transfer companies

Thereafter procurement departments, normally in association with finance departments, select the financial reports they wish to receive month-end. As users go about procuring conferences via the system, MiceMaster continually talks™ to the procurement department personnel, alerting them of quote requests, rogue behaviour and orders.

Furthermore, MiceMaster reports that many financial departments have no idea to what extent their cash-flow would be altered if all staff charged with sourcing MICE quotes issued orders simultaneously as there are no controls. MiceMaster solves this problem as at any given time, procurement can see what quotes are in the system and what orders have been placed. Most importantly, the system forces the user to explain why a particular venue was issued the order which makes for interesting reading says MiceMaster, The Marketing Director told me to book the 5 star property.

Adding fuel to the fire, people charged with sourcing quotes are often too busy or are late in sourcing quotes, compromising compliance further by only sourcing one quote. MiceMaster can reveal the user activities by date i.e. if Sandy only requested the quote a week before the event or only contacted one venue ¦ why?

At any conference, just because the venue has been given the contract to host the event does not mean that expenditure is under control, 3rd party costs continue to pressurise budgets such as entertainment, décor, guest speakers or team building. MiceMaster records these costs and allocates them to the quotation management modules so at a glance, procurement and finance departments can see additional costs being added. There is still a lot of additional functionality we are building into the latest version of the system that will enhance compliance even further says MiceMaster.

MiceMaster there is a rat in the mice kitchen
, ,

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.