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Managing Payments to Optimize Successful Management

of Sponsored Public Events

 

STUDENT PAPER

By Pierre Levaslot

SKEMA Business School

Lille, France

 



ABSTRACT

Organizing an event is an extremely complex task: in 2017, “Event coordinator” was ranked 5th most stressful job by Forbes, just after “Police officer” [13]. Payment management is particularly crucial to the success or failure of individual events, event management businesses and their clients. This study aims at providing guidelines about how to handle payments between an event owner and an event management company, in the context of a sponsored public event. Several contracts have been analyzed with a multi-attribute decision making method to determine the most relevant solutions. Three solutions stand out as good compromises between financial security, performance incentive and user-friendliness: Cost plus incentive-fee, Cost plus award-fee and Flexible fixed-price methods. The paper suggests considering the specificities of the three suggested contracts before selecting one according to the specific context of the event.

Key words: Event management, Event organizer, Project Management, Payment, Incentive, Award, Fixed-price, Liquidated damages, Sponsored events, Public events

INTRODUCTION

The Events Industry is a massive and growing business: it was worth £42.3 billion in the UK in 2015 and is expected to rise by 8% [1]. Yet, organizing a large event can be a difficult and complex task. Events are unique and temporary endeavors usually thrown in a specific context involving a multitude of factors. With an average budget of £65,943 per event in the UK in 2015, the stakes are too high to endure amateurism [1]. Therefore, event organizing companies are often hired to provide the experience and expertise necessary. This can be a perfect solution provided that the event management contract is adequately detailed and protects both parties. Carefully handling payments is particularly crucial because the client can be investing an important amount of money and the organizer is incurring significant expenses. This need is reinforced by the risky and uncertain environment of the public event business: one must deal with sales, affluence, logistics, venue booking, safety, government regulations, etc. When the contract is not properly set, the failure or mismanagement of one party can have a disastrous impact on the other party and lead to important economic losses. This is why event businesses must understand that estimating and agreeing on the budget is not sufficient, one must also consider how payments will take place and which legal protection can be implemented.

This paper aims at providing guidelines to manage payments effectively in an event management contract and more particularly in the context of a free public event supported by sponsors. It uses multi-attribute analysis to benchmark an agreement for a 5k Run/Walk event and several contract templates that have proved themselves over time in the construction industry. It considers the ways to ensure financial flexibility, safety and motivation. It shows that specific payments methods can be set up to ensure that both parties have enough financial security while offering financial leeway and performance incentives.

To summarize this paper has been created to answer the following questions regarding payments in sponsored public event management contracts:

  • How to ensure financial security for both parties?
  • How to foster performance and project success?
  • How to keep the financial agreement user-friendly?

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director [email protected].

How to cite this paper:
Levaslot, P. (2018). Managing Payments to Optimize Successful Management of Sponsored Public Events, PM World Journal, Volume VII, Issue 5, May 2018. https://pmworldjournal.net/wp-content/uploads/2018/05/pmwj70-May2018-Levaslot-managing-payments-to-optimize-event-success-student-paper.pdf



About the Author


Pierre Levaslot

Lille, France

 


Pierre Levaslot
is a final year double-degree student at Ecole Centrale de Lille and SKEMA Business School. He is expecting to get a MSc degree in Generalist Engineering from Ecole Centrale de Lille and a MSc degree in Project and Programme Management & Business Development from SKEMA Business School. He has experience working as Logistics Technician Intern, Sales Adviser, Web development Officer and Software Engineering Officer. He also has experience as Project Manager as he led a team of 4 SKEMA students in a project to organize a conference with a Chinese Project Management practitioner and professor in October 2017. Pierre can be contacted at [email protected].