1.     What meeting spend management software should I use? 

This is the most common and most complex question, so I’ll spend some time answering it.

Not too long ago, the biggest buzz in the meetings industry wasn’t spend management software, but online registration software.  Application Service Providers (ASP’s) sprang up everywhere trying to be the company to capture the market, to charge a per attendee fee or no fee at all so as to attract millions of users to their site for future gain.  Everyone it seemed wanted to get in on what was perceived as the lucrative ASP model of licensing (essentially “renting”) registration software to millions of users via the web.  Eventually this turned into what so many Internet models turn into and that is a commodity with a small group of companies providing a low cost web based service to millions. 

Our industry then turned to browser available meetings management software again with ASP’s vying to become number one in that space. That was more difficult as meetings management is a much more complex proposition than online registration, harder to commoditize.  No one has come out the clear winner in that space.

Now the buzz is understandably, given this economy, all about meeting spend management software, which is yet another increase in complexity, far beyond online registration.  While online registration and certainly meetings management can be complex for sure, spend management adds in the complexity of financial accountability, accounting standards, the need to coordinate with other well established financial software tools in place at public companies that may be controlled by government regulation and oversight, a far cry from online registration.   And the level of intricacy in this software space is still evolving.  Yet nonetheless meeting spend management software is the buzz everyone is talking about with software makers and meeting companies scrambling to create the next off the shelf or ASP product that will become the template leader, as popular as PowerPoint, to the meetings spend management industry.

 

But the difficulty in trying to create this holy grail of spend management software is the template approach.  While every ASP and off-the-shelf provider touts their ability to customize their software to the needs of each situation, they begin with the premise that tailoring a pre-created product as opposed to creating a custom product is the ideal route to take, or even possible.   The difficulty with the concept of customizing spend management software rather than creating software anew, is the enormous complexity that exists within each corporation due to their other existing financial software.

Any good-sized company has a complex web of enterprise software products they use in-house from SAP to Oracle, which manage the finances and systems of their corporation.  For spend management software to be useful and even more basically to simply be valid, it needs to pull and push data into and from those systems.  Off the shelf software that’s customized to try to make it work in every situation simply cannot do a very credible job, or some would say, work at all.  Spend management software to properly interface with complex corporate software already in place must be created from scratch.  Internal software at corporations are simply too complex and unique to do it any other way.

But instead of creating software from scratch the more common approach has been to purchase off the shelf software or license ASP web based existing spend management software products and attempt to modify them to make it work. Because this modification is referred to as customization, and that term is so close to custom, the marketplace can get easily be lead down the wrong road. This is not unlike the custom home market, which often uses the term custom to mean one can purchase a home and be able to change the shutters or other easily modifiable variables. That’s customization, not custom.  A true custom home is a product designed specifically for the needs of an individual situation.

When customization is chosen over custom in spend management software, the procurement department of a corporation is often left with software that is deficient; that “can’t do this” but “can do that.”  Or they are left with software that relies on double entry systems where employees have to, using spreadsheets, hand correlate reports from various pieces of software, a situation that would not pass any accounting standards.  Ultimately this leads to the decision to find new web based or off the shelf software, customize that and the cycle begins again with software ultimately dubbed deficient.

The way to break this cycle is to create custom software from the ground up.  To some that sounds like a daunting task, only available to mega companies and in any case, enormously expensive even for them.  The actuality couldn’t be farther from the truth.

Due to a whole range of changes in the software industry relating to “rapid application advancement” (simply put, creating software more quickly), custom software is an extremely doable task, not only for mega companies but also even for small companies.  Filemaker Pro, Salesforce.com, Adobe® Flex™, Web/PHP and other software creation platforms now make designing software a simpler, less expensive and easier process for engineers.

And there’s another realization beginning to emerge.  When a company uses web based software or desktop software that they don’t own, that is analogous to renting, there’s a continual never-ending licensing cost.  That’s how software-licensing companies make money.  But when one has software created specifically for their company, they own it.  It’s theirs.  It literally gets put in the asset column of their balance sheet rather than the expense column of their profit and loss statement.

The morale of the story is this:  Years ago, the tools did not exist to create customized software. But just like everything in our world, customization is now so much more possible because of the digital age.  I can go to the mall and get hundreds of customized consumer products that were impossible to produce except at large factories just a decade ago. The same is now true in the 

B-to-B software business.

As this industry becomes more sophisticated, CFOs and CEOs will demand more and more accountability and alignment with standard accounting procedures when it comes to showing savings and ROI in the meetings spend management procurement category.  Simply having vendors fill in undefined and unverifiable data is not going to pass accounting muster.  This means that spend management software must be created to the same standards as all accounting software, interface with internal enterprise software savings and have data which is verifiable by audit.

My philosophy (and my company’s) is that meetings should make you more than they cost, otherwise they shouldn’t be held.  But the first step in proving ROI is to prove “I”, in other words one’s investment, the cost of the meeting.  This is not as easy as it might seem.  Costs are not always borne in one place and there are overhead and internal costs, which need to be amortized across all projects.  Cost reports must meet standard accounting principles otherwise they will eventually get kicked out of a CFO’s analysis, especially for a public company.  So the first step in proving “R” is to validate “I” and that can only be done with customized spend management software that meets all accounting standards.  Then the return quotient can be calculated; the subject of a future blog and a niche industry in its own right.

Clearly, this must be the client, not the vendor.  The company wishing to acquire the spend data must control the spend data.  To do otherwise is a conflict of interest.  All too often, the norm is that the vendor supplying the very services that are essentially being audited by this spend management software controls the inputting of the spend data.  This breaks all accounting principles. The only way for this to occur properly is for data to be pulled and pushed in and out of the company’s financial software that pays out money to the vendors.  This must happen automatically or it will not live up to standard accounting principles.  Savings data, as opposed to spend data, needs to be entered often by the vendors as they are the ones who know that data as they are the ones creating that savings. But that data too, must be verifiable and created in such a way as to pass all accounting audit standards.  Savings data must be entered against standardized and pre-defined benchmarks, which remain the same from year to year to judge savings year over year.   Spend management software will eventually evolve and be no different than any other financial software in a corporation, so robust as to be able to be included in the financial statements of public corporations.  But this will take time to standardize as the meetings industry develops more sophisticated spend management software.

Over the years I’ve seen the industry change, from a lack of interest in spend management software to a mandate that spend management programs be instituted.  But even with a mandate I notice many loopholes. Often spend management programs will be limited to a department, a division or national operations only.  Rarely do I see a system that is truly worldwide, mandated and tied directly into a P.O. system. In other words, for a spend management system to truly work, money should only be able to come out of the corporation if the money goes through the spend management system.   For this to work, the spend management software must be fully integrated with the existing enterprise software whether it be Oracle, SAP or the like.  

See point 1 above and it becomes clear that custom software, not customized software is the only practical way to get that to happen. Oracle, SAP and other software are extremely sophisticated and intricate.  To interface with it, custom software must be designed.  Only then can data be pushed and pulled from and to those enterprise systems.  Design a system like that at your corporation and your CEO will then be able to mandate it across an entire international organization because it will be integrated into the processes of your corporation.   At the touch of a button, you’ll then be able to know exactly what was spent, as it couldn’t have been spent without being captured by your spend management program.  It will only be then that you will truly know what you’ve spent at your company, not only for meetings, but if expanded, for any and every expenditure.  This is the procurement holy grail that I hope to personally ignite.

6.     How do I gain compliance within my corporation to utilize the spend management system?

By following the points laid out in number 5 above and integrating spend management worldwide into your corporation.  Compliance will then be a non-issue as it will be the only way employees will be able to acquire funds to spend.

Not only can it, but it should as the two issues are inextricably intertwined.  If the terms of a contract are not known or being followed, spend is not being managed, rebates may not be occurring, discounts may not be happening, etc.  Again, though, custom software, not customized software is necessary as the situation at each company will be far too individual to be accommodated by software, which is merely tweaked as opposed to created for you.

No. Meetings may have unique needs, but so do all procurement categories. A spend management system should be created for all spend in a corporation. But again, custom software is necessary, as each category will have unique needs at each company. The aggregate of all categories therefore is that much more unique and complex.

An untold amount of money can be saved when a true custom spend management software system is in place, which lives up to accounting rigor and audit.  Too often soft savings is reported instead of true hard savings.  With an auditable custom software system in place, created specifically for your company, millions upon millions can be saved routinely.  The industry has not seen anything close to the savings possible as most savings “proven” currently are not provable and are merely soft savings that would not hold up to any accounting inquiry.

We firmly believe it begins with the commitment to design custom software, created specifically for your company as opposed to customized software. That’s why we designed The MBM Consortium as both a custom software company and a meeting planning corporation.  MBM Productions Int’l provides the practical knowledge of meeting planning to strategically design a meeting spend management system and Soliant Consulting, an MBM Consortium Member, has the coding prowess to bring meeting spend management software to reality and integrate it into your company’s enterprise software systems.  Whether a company calls on MBM or not, that’s a personal choice.  But we firmly believe that regardless, CUSTOM software is a mandate to move our industry from meeting spend management software programs that sound like they’re saving money to meeting spend management programs that actually save money, proven by auditable accounting inquiry.