Innovation & Design

Toyota Program: Slash Meeting Costs


As companies move to trim off-site costs, Toyota uses StarCite event-planning software to manage more than 400 annual face-to-face gatherings

Toyota Motor (TM) is often idolized for its super-efficient logistics and manufacturing operations. But after less than an hour on the job as Toyota's meeting services manager in 2006, Louann Cashill discovered that the carmaker could be as wasteful as Detroit's Big Three when it came to planning off-site events. "It was like walking into an office that still used typewriters," she jokes.

Toyota holds more than 400 meetings and conferences each year in the U.S., with an average of 3,500 employees on the road every month. Not long ago each round of travel began with hard-to-read, handwritten registration forms pouring forth from a fax machine to be manually typed into a computer. Hotels had to be selected, contacted, negotiated with, booked, and sent attendee information. Three full-time employees were needed to handle the workload.

Cashill had just researched event-planning software for her previous employer, Amgen (AMGN), where she ended up using a program called StarCite. She quickly enlisted Toyota in the same service. Today, all Cashill has to do is enter basic information about a meeting into a StarCite template, along with a list of employees who'll be attending. StarCite automatically sends online registration forms to attendees, books their reservations, and sends the information, along with payment, to the hotels.

Since switching over, Toyota has cut meetings expenses by 23% and its event-planning staff to one. The company has also saved nearly $1 million by using another StarCite feature that enables it to bank canceled bookings—like a store credit—and fill the space later when another Toyota group needs to meet.

Meetings cost 3% of company revenues

With a few clicks of the mouse, Cashill can also generate detailed financial information on something as large as a year's total meeting budget or as small as how much a particular employee spent at a conference. "Technology is the foundation of putting together a meeting program," Cashill says. "Until you can collect, capture, store, and organize the spending, you don't know where you sit."

StarCite's creator, a Philadelphia company also known as StarCite, charges a fee of 0.5% to 1% of what its corporate clients spend on meetings for which they use the software.

The cost-cutting tool has become even more timely as Toyota and other StarCite clients look for savings to offset sales declines. According to Boston-based research firm Aberdeen Group, employers fork out 3% of revenue on meetings. One option, of course, is to hold fewer face-to-face get-togethers; indeed, conference attendance is broadly down. But even though videoconferencing is becoming cheaper and better, many companies have concluded that employees still need to gather in person with buyers, sellers, partners, and one another.

Vendors say StarCite's automation has helped them, too. Michael Beardsley, vice-president of global sales for Paris-based Accor Hospitality, a $11.2 billion-a-year hotel operator, says that StarCite's client database provides a "prospecting list," that helps his sales representatives know what would-be customers need for upcoming meetings, which in turn enables them to prepare better bids.

Business is booming for StarCite, the company. Since it began in 1999, StarCite has grown to serve 450 corporate clients, including heavyweights such as Oracle (ORCL), Pfizer (PFE), and Xerox (XRX), which says StarCite has saved it 40% on meeting costs. The software has now helped arrange gatherings for more than 10 million people. Last year, the 300-employee company pulled in $50.5 million in revenue, up from $44.9 million the year before.

vendors compete in online marketplace

There's room to grow. In the U.S. alone, PhoCusWright, a travel-market analysis company in Sherman, Conn., says companies spend $175 billion annually on meetings, including air, car, hotel, and ground transportation. StarCite extrapolates this figure to an estimated $240 billion market worldwide. And Aberdeen Group reports that 70% of companies lack a central meeting-planning process.

Cashill, a 20-year veteran in meeting planning, says she chose StarCite mainly because it knew how to help large companies install and use its software, and how to develop a meetings strategy across an entire company. Its data also enable her to negotiate better rates and contracts with hotels. For instance, on StarCite's online marketplace for companies and hoteliers, some 93,000 vendors have signed on to offer services. Cashill says she can post Toyota's needs for upcoming events and hoteliers often underprice one another to compete for the business.

StarCite isn't the only company in this niche. Toronto-based Arcaneo provides similar meetings-management software, but with a different approach. The privately held company started in 2002 and already has a staff of 40 and companies such as Nike (NKE), Citibank (C), and AstraZeneca (AZN) as clients. Arcaneo Chief Executive Dale Beckles says StarCite's consultancy-like services aren't for everyone. Beckles says his clients prefer to plan meetings in-house, using Arcaneo's Metron software as one of many tools. "Our corporate clients want more control," he says. "They are more evolved."

Executives at StarCite and Arcaneo agree that corporations desperately need their services. Each say that when new clients sign up, few have much idea as to what their companies have been spending on meetings. Beckles recounts how one new client guessed its annual meeting outlays totaled $500 million. It turned out to be closer to $1 billion.

StarCite CEO Gregory Dukat says that 99% of the time clients severely underestimate their meeting costs: "If senior executives aren't thinking about this issue and can't quantify what they spend, they have a problem—and it's a big problem."


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