Pain-less TMC RFP Process

Anyone who’s worked on a TMC RFP knows what a royal pain in the butt these projects are.  Lots of reasons for this – it’s an infrequently sourced category, there are no standard data elements, questions or pricing schedules, and there is no easy way to score bids.

Don Swartz, principal of Corporate Travel Buyer Resources, figured there had to be a better way.  As a former TMC guy and active consultant on TMC bids, he had a ringside seat to these and other problems.

Don’s solution? Streamline and standardize.  Impose reasonable limits on buyers and sellers. Make things easier and faster. Stay focused on the goal: Help buyers make good choices from several well-crafted offers.

The result? A notable reduction in cycle time in each of the four major components of a sourcing project. And as buyers everywhere will appreciate, a corresponding reduction in the cost of managing the TMC RFP project.

BidCentral's Cycle Time Comparisons v2Buyers can solicit a maximum of six bidders.  The tool, BidCentral,  allows buyers to upload their travel data for bidder review and discovery.  Buyers solicit pricing for each of the current services they now use from the incumbent TMC, as well as for proposed upgraded and new services.

The buyer separates her questions into logical categories, which allow bidders to assign them to different people to develop the answers.  Q&A is done online. Scoring is done using a 0-3 point scale.  Any item receiving a zero (unacceptable) score gets discussed between bidder and buyer.  All bidders with a minimum acceptable score get to present live to the buying team.

There’s a lot to like about this process.  It’s designed by an expert in TMC RFPs, it uses technology to do a lot of the heavy lifting, and it requires buyers and suppliers to agree on reasonable limits in order to produce a much less painful process for all involved.

Hat tip to The Beat’s May 16th article for first covering this development. It’s a winner.

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7 Responses to Pain-less TMC RFP Process

  1. Hi Scott. it was kind of you to revive and embellish on the article that was in The Beat. PTC has run our RFP’s using an online tool for the last 3 years. I don’t see how a different tool can speed up the process unless you give the TMC’s less time to respond. The less time you give them, the more canned their replies. The real time investment is in the down-selecting and negotiating which will vary by client. 14 days to turn an RFP is frankly insulting to the major TMCs. 10 days prep time for an RFP makes me wonder what technology is being used; it sounds slow. Frankly we could launch an RFP in 48 hours and demand responses from the TMC’s in 10 days. That would get us in the Guinness Book of Records, but no TMC of any size would respect or respond to the RFP that gives them unreasonable timelines. They should be given 30 for a domestic RFP and 45 for a complex global one.
    best regards,
    Andy Menkes

  2. Scott Gillespie says:

    Andy,
    TMC RFPs strike me as the most complex of all the travel sub-categories. It’s no surprise that these RFPs take a long, long time – especially if the client has a complex travel program.

    But let’s not assume that there aren’t ways to streamline the process that benefits both the buyer and bidders. The Hotel RFP is a good (by no means great) example of this. It uses standardized questions, which allow bidders to create standardized responses…clearly a big efficiency for both parties, yes?

    I suspect that by doing more work on the front end to create a clear view of the buyer’s program and service needs, and by making it easier to respond to the stock questions, and streamlining the pricing component, the TMCs can respond quite a bit faster. Seems a natural path to improving the process for everyone.

    Let’s hear from others on this.

  3. donaldswartz says:

    Andy, you may qualify for the Guinness Book of Records but it won’t be for TMC bids. Like yourself, I’m an industry veteran with prior TMC and buyer experience on this topic. Yes, specific timelines will vary from program or bid, which requires a highly customizable and scalable process. My solution at CTBR offers both. As Scott stated, TMC bids are complex. The industry’s historical best practices for administering a TMC bid have rarely delivered a positive ROI for the buyer or bidder, when you factor the low cost of the TMC as a vendor category. This is why I built the bid solution on a 360 degree modeling platform. This innovative approach is continuously validated by the wonderful feedback we receive from buyers and bidders, especially when asked to compare it with other solutions in the market. Glad to hear you also offer an online solution because it will offer the buyer a choice. Look forward to competing with you in the market. Donald Swartz – CTBR

  4. Barry Kenley says:

    I think that the entire travel management industry needs an RFP re-boot.

    We had recently participated in a different form of travel services RFP from a Canadian University which was most refreshing. They had followed a University of Arizona procurement model, where basically they assume that all responding TMC’s can provide the basic travel management services. They had asked 2 questions and limited the responses to 6 pages – the first asked “Of the risks you can control in the TM world, how will you mitigate these for us” and the second was “Of the risks that you DO NOT control in the TM world, how will you mitigate these for us?”

    The did not have any references to GDS systems used, types of reporting, OBT tools recommended, or other standard elements that ALL TMC’s have a derivative of and all probably work in some capacity that is pretty much the same between all TMC’s. In this manner, there was no opportunity to provide “marketing materials or generic responses – which never should be done anyway – and they wanted to gauge the TMC’s response and creativity in the ongoing management of their business. There was also a pricing page, and a follow-up session interviewing the Account Manager, General Manager and Tech/Implementation manager – no sales associates.

    While this style was definitely different and may not work for everyone, it did showcase the point that much of what TMC’s focus on is really standard and at the end of the day who really cares what GDS system is used? That specific question should be banned from any future TM RFP’s.

    The more latitude for creativity allowed to respond to RFP’s the better the quality and customization of the responses will be.

    • Scott Gillespie says:

      Barry,
      You’ve come across a really interesting technique! For the record, it looks like this method was developed at Arizona State University, and was originally geared toward evaluating complex construction projects.

      This technique/method/school of thought is known as “Best Value Procurement”.

      Here’s a really brief summary: http://pbsrg.com/best-value-model/
      Here’s the research group at ASU that is promoting it: http://pbsrg.com/
      Here’s a set of videos explaining the concept: http://pbsrg.com/education/videos/

      My quick take is that it does, as Barry explains, drastically cut down the RFP questions by focusing on how the supplier will reduce risk. The supplier that best answers that question is then invited to work with the buyer on a pre-award basis to further develop those risk mitigation plans.

      During this pre-award partnership the buyer gets a great understanding of the supplier’s capabilities, people, culture, etc. At the end of the detailed risk mitigation phase the buyer formalizes the contract, or presumably turns to another supplier.

      I can see this approach working for the TMC category. It’s a complicated category, the transition has a fair amount of risk, and the bidding is infrequent. A lot like a construction project, eh?

  5. Barry Kenley says:

    Correct. It was the “best value” approach.

    Now it does have both positive and negative elements and one key factor is that the “sales” associate who may have spent years cultivating the relationship with the travel manager, or CFO or procurement department has basically been marginalized for this process, as only the TMC account specific team who will have day-to-day client contact is to be evaluated. Therefore it behooves the salesperson who is responding to the RFP document to strategize and collaborate with the “team” so that expectations on deliverables are agreed to and will be met for the prospect

    However, with a few tweaks here and there, the format is definitely an improvement over the standard format RFP questions and really promotes creativity and originality in proving why you are the best TMC for the opportunity.

    I am a huge believer that all RFP responses need to be 100% customized to each prospect’s needs and specific requirements – Universities have different travel challenges than Oil & Gas companies which are also different from Sports teams, so a 1-size-fits all approach is no longer valid. TMC’s that just provide generic info or basically “show up and throw up” at presentations need to be cut off the respondent list and let the companies who really deliver value move forward for further evaluation.

    I did appreciate responding to this type of RFP process and believe we had built a very solid response tailored to the specifics of what this institution was looking for – without once referring to the standard “show me your reason code reports” question.

  6. Don Swartz’s idea of Bid Central is an excellent idea for the all concerned. Many RFP’s sent to me by various sized corporations show a lack of knowledge and are usually copied from a past RFP of another Company of the wrong size. This will be a good tool for the good of all, if the corporations sign on to it? As far as time lines. If an RFP has a 10 day remit requirement that sounds like they have already made their selection of a TMC and I would not offer a bid. I suggest 30 day-45 days.

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