… 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.
The procurement function started taking over the travel category in a notable way back in the late ’90s. Strategic sourcing was the “must-do” business fad, and the travel category was often the poster child for these major cost-saving efforts.
It was a learning process, for sure. Yes, some sourcing consultants and their procurement clients mangled travel RFP processes in the quest for unrealistically high savings. Some relationships were ruined, and some savings were illusory. The travel community quickly labeled these occasional failures under the heading of “Disaster – Handled by Procurement”. And like the story about the CEO getting bumped from a preferred airline, these stories seem to never fade away.
Today, if travel managers have not personally had a bad experience with their procurement colleagues, they probably either know of others who have, or they’ve heard the ghost stories told at travel industry campfires. To be fair, many, many procurement-led sourcing efforts have produced a lot of significant savings and protected the value of their travel programs and travel budgets. But nevertheless, those scary stories continue to echo in the travel community.
The second cause of the bad rap is fear. If you’re a travel manager, and you’re told you’ll now report into procurement, you may well be afraid that the relationships that you’ve carefully built – and all those “you owe me” chips you’ve acquired, are about to evaporate in the hot sun of a “lowest price wins” mentality best suited for buying pencils and paper clips.
You may also be afraid that you’ll lose the sexiest part of the travel manager’s job – playing the starring role in “Let’s Make a Deal”. I may be wrong, but I think most every travel manager really likes their negotiating responsibilities, and the power, perceived or real, that comes with this role.
You might also be afraid that those bulldozing, price-focused procurement fanatics will leave you with a set of low-price – and no surprise! – unreliable travel suppliers, and that your travelers will be hunting down your home phone number to personally and vocally share their latest travel nightmares with you.
Finally, you may be afraid of getting dead-ended, career-wise, in the procurement department. Especially if you came up through the travel industry, like so many travel managers have. Don’t procurement people make their families fill out purchase orders for groceries? Eeeewwww… who wants to be like that, right?
Well, the classic response to fear is fight or flight. You might jump out of this frying pan, but more likely you decide to stay – and fight. Travel managers fight procurement’s encroachment by setting up these lines of defense:
- “You can’t source travel like you can office supplies”
- “You’re focusing way too much on price and savings”
- “You don’t understand the importance of relationships in this business”
- “You’ll put travelers through hell, and they’ll go to work for our competitors”
Once these defensive lines are drawn, travel managers look for, and often find, confirming evidence. Yes, procurement processes do focus a lot on price (especially in tough economic times), and yes, procurement pros don’t always know much about the spend category they’re tackling. They rely on a process and subject matter experts to make sure they focus on the right elements.
And so the negative stereotyping of procurement continues, fed by frequent skirmishes between travel industry veterans protecting their turf and procurement pros needing to tackle a really important spend category.
So what’s the solution?
First, each side needs to start with a healthy dose of open communication. I’d have the travel managers lay out their beliefs about what’s important in the travel category. Talk through the issues of what “good quality” means, and how a traveler – and a buyer – should be able to recognize it. Tackle the importance of relationships, and the trust factor that goes into so many successful supplier-buyer partnerships.
Move on to describing whatever fears the travel managers have about getting caught up in a procurement-led sourcing effort. Ask the tough question: “How will you evaluate quality, and at what price does lower quality make no sense?”
Hopefully, the answer from your procurement colleague will reassure you. Even something like “What do you mean, how will I evaluate quality? We’ll do this as a team, and I definitely need your expertise on that” should be a welcome response.
Learn What Really Works
But why stop there? Go one step further and seek out a couple of success stories where procurement did a great job in sourcing a category. The good news is that it doesn’t have to be a travel category. Remember, procurement people love to apply proven procurement processes to most any category they need to source. What you, the travel manager, should look for is a case where the procurement team worked well with the category expert.
Create a Cliff Notes version of how this team tackled their category, and what they’d do next time to make it even more successful. Here’s the catch: do it together with your new best procurement friend, the one that you’ll be working with. I guarantee that you’ll learn a lot about the procurement mentality and the key steps these folks take to find value.
If you can’t find a success story within your own firm, go outside. More specifically, find a travel sourcing success story by networking with your colleagues (I know these success stories exist!). Be sure to bring your procurement buddy along for the ride. Figure out what would – or at least might – work back in your firm.
You’ll be surprised at how quickly you can get aligned on the process of sourcing the travel category. But there is one more vital trick to getting travel and procurement managers to work well together.
Stay tuned, valued reader, for the next post “Deciding How to Decide“.