Why Travel Disses Procurement…

… And What To Do About It.

As promised in “Travel Procurement’s Fighting Words”, here are my thoughts on why procurement has a bad rap in the travel management community, and what each side should do to get along better.  First, the Why, then the What To Do. (Beware –  this is a long post, so you might need a fresh cup of coffee to get through it, and it ends with a teaser for an upcoming post.  Now back to the original program)

Why the bad rap on procurement? It usually comes down to either fear or a bad experience on the part of the travel manager. Let’s start with the bad experience, since this is the hardest one to overcome. Continue reading

Sabre’s GetThere Starts Consultancy

News of a new travel consultancy made the rounds today.   Travel consultants come and go, about as often as travel managers lose their jobs.  What makes this announcement noteworthy is that the consultancy is launched by GetThere, and is headed by Duane Futch and GeThere’s EMEA Director  Jason Geall.

GetThere is a leading provider of self-booking tools, and is owned by Sabre, a major player in the travel technology industry.  Futch was Wal-Mart’s head of travel management, where he won the prestigious  Travel Manager of the Year award from Business Travel News.  Between Sabre’s money, GetThere’s customer base and Futch’s street credibility, this consultancy has some good ingredients.

What’s not yet clear is Continue reading

The Israeli Army Knife of Self-Booking Tools

You know those Swiss Army knives?  The ones that have 3 different knife blades, two screwdrivers, pliers, a fork, spoon and tweezers, all in one casing?  Well, I found the Israeli equivalent in the self-booking tool category.  Atriis is the tool’s name.  In addition to online self-booking, it includes: Continue reading

Travel Procurement’s Fighting Words

Anybody out there looking to pick a fight about the role of procurement in the travel category?  I found this post on TheBeat.travel, an active forum for topics related to the business of travel.

Holly Hegeman, who closely tracks the airline industry on her well-respected site Plane Business, made this comment:

Oh and the procurement method of purchasing travel? If your company is still doing it — you need a new CFO.(Her full post is here)

My response is copied below, and yes, I defended procurement’s role and capabilities.  But the more important question is this: Why does procurement get a bad rap when it comes near the travel category?

I’ll gather my thoughts next week.  (Update: See them here) Meanwhile, what are yours? Continue reading

Travel Data 101 (part 3): Data Reporting

(I originally posted this article on Supply Excellence)

Good data is one of the two must-haves in any successful travel sourcing project.  (The other is effective people, but that’s another story). The question here is how do you go from acquiring your travel data and scrubbing it, to getting good data reporting?  The answer is that it depends a lot on your data reporting tool (click here for a list of the better-known travel data reporting firms).  Here’s what you need to look for:

  • Consolidation: You want to store your travel agency booking data with your corporate credit card and expense reporting data.  Your data tool should be able to acquire data from just about any travel agency’s back-office program, any corporate credit card file and any expense reporting tool.  The more automated these handoffs, the lower the cost for you.
  • Normalization:  Your data tool should transform data from Continue reading

Tyco’s Travel X-Factors: C-Support, Communication

As readers know, Tyco International won Purchasing Magazine’s Medal of Professional Excellence last week.  I spoke with Rose Speckmann, Tyco’s Director of Global Travel, to learn more about her success factors.

The situation was that Tyco’s travel spend shrank by about 65% due to divestitures.  Tyco’s CPO, Shelley Stewart, challenged his supply chain organization to deliver savings despite the loss of buying power.

Rose initiated a three-pronged approach.  One focused on reviewing the contracts with all major travel suppliers; another focused on demand management and usage of video conferencing. (See more details here from Purchasing.com’s article.)

The third prong was all about compliance and communication.  Early on, Rose’s boss, VP of Supply Chain Management Jaime Bohnke, used a monthly President’s Roundtable to Continue reading

Travel Data 101 (part 2): Data Scrubbing

(I originally posted this article on SupplyExcellence as part of a series on using data in travel procurement)

Let’s assume that you’ve collected all your travel data – now what?  Just like with your other categories, you now have to scrub the data before it’s ready for your sourcing project. These two generic rules shouldn’t surprise you:

  • Discard abnormal values.  Your sourcing data is the basis for representing your future purchase patterns. Throw out the $35,000 plane tickets, the $300 per day car rentals, and the $1,800 per night hotel stays. While these may be fine audit items, they don’t belong in your sourcing data.
  • Embrace the 80/20 rule.  Travel data sets have very long tails…lots and lots of very small purchases in obscure places.  These purchases are of no value to your negotiations, so trim the small stuff from your spend files.  It makes the analysis much easier and the negotiations more relevant.

Here’s what you need to know about scrubbing Airline, Hotel and Rental Car data: Continue reading

Tyco Wins Procurement Honors

Tyco International ($20 B revenues; TYC) yesterday earned Purchasing Magazine‘s highest honor, the Medal of Professional ExcellencePaul Teague, Editor in Chief, covers the path to excellence taken by Tyco’s procurement team in this in-depth and insightful article.  It’s must reading for any procurement executive.

Did the travel category get mentioned?  Absolutely! Susan Avery gives this in-depth account of how travel’s big challenges were met with textbook collaboration and strong senior management support.  Rose Speckmann, Tyco’s director of global travel, led a sprawling multi-national effort to integrate and improve Tyco’s travel supplier contracts in all sub-categories. In addition to global sourcing, Rose led efforts to increase the use of video conferencing and improve traveler security.

This is a classic success story achieved in a turbulent corporate environment.  Congratulations to Rose and her team for achieving success and helping Tyco win the Medal!

Travel Data 101 (part 1): Best Sources of Travel Data

(I originally posted this article on SupplyExcellence as part of a series on using data in travel procurement)

Sourcing the travel category is the same as most other procurement categories – you need to start with good spend data.  The trick with travel data is knowing where to get it and how to use it.  Let’s start by dividing the travel category into its major food groups: airlines (or just “air”), hotels and rental car.  These sub-categories each have different places to get useful sourcing data. For the impatient reader:

  • For airline spend – get it from your firm’s travel management company (TMC, a.k.a. travel agency)
  • For hotel spend – use a combination of your firm’s TMC booking data and your corporate card data
  • For rental car spend – get it from  your contracted rental car supplier Continue reading

Views on Travel Procurement in Asia

Here’s an interview with Brett Henry, VP of Marketing for Abacus.  Abacus is the major GDS in most parts of Asia, so it has an excellent feel for trends in travel spending, both corporate and leisure.  Brett covers the state of travel procurement in Asia, his views on the pace of the rebound in travel spending, and emerging patterns of travel program management in Asia by Fortune 500 firms.   The interview is not dated, but seems to be from 2009.