Yesterday I led a full-day workshop on travel procurement at NBTA’s annual conference. We had a terrific group of about fifty folks participate. About two-thirds came from travel backgrounds, and about a third came from the procurement side. Lots of good interaction throughout the day.
Here are the slides that I used during the workshop.
Travel Procurement Workshop 2010 Part 1: Covers why CEOs like procurement, how strategic sourcing teams are organized, what makes the travel category challenging, the vital role of travel policy, figuring out a supplier’s maximum rational discount, why travel policies are rarely extreme, and how to recognize a good deal. I’ll expand on this last topic (related posts here and here) in a future post. (This slide deck is PowerPoint 2007, 56 slides, 8MB)
Travel Procurement Workshop 2010 Part 2 covers 1) Modern airline sourcing – the use of Fair Market Share (FMS), why fare mix is so important, calculating the net effective rate, the use of scenario modeling and the negotiating implications; and 2) Modern hotel sourcing – beginning with the hotel cluster concept, the need for a strategy study to shape your bid list, calculating the total cost of stay, and how to identify which chains best fit your hotel program. (This deck is PowerPoint 2007, 36 slides, 7MB)
After lunch we broke into teams to work through a mock sourcing exercise. We used the Risk/Reward framework described earlier in the workshop, and focused on the elements of Quality of Product/Service; Policy Management; Relationship Value; and Strategic Value. I’ll write more about this framework later.
I also used an Excel file to lay out how these elements can be weighted and evaluated, and then combined with the savings (reward) to display the sourcing options in a dead-simple chart. The WordPress blog platform doesn’t allow me to place an Excel file here, so if you’d like a copy of that file, let me know and I’ll e-mail it to you.
I’m speaking later today on video conferencing, and tomorrow on hotel sourcing. I’ll post on those sessions, with the files, as soon as I can.
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