Implementing a rigorous selection procedure is the only way to find the right TMC, says Catherine Chetwynd
Choosing a Travel Management Company: An agency which manages business travel for a company. to fit the needs and culture of a business is no easy task and it should start with defining a travel policy. A clear policy helps the travel department engage with other elements of the organisation such as HR and finance, and ensures the objectives of the policy align with those of the business.
“It also gives insight into how others see travel: HR might be looking at attraction and retention of employees while finance may be looking at payment solutions,” says Jon Bolger, director of Travel Equilibrium Consultancy.
There is no one-size-fits-all travel policy, of course. If global consistency of fees and service is paramount, a call centre may be the answer. Alternatively, if travellers are at the centre of policy because they are stakeholders in the business, are highly paid or are expected to produce a lot of revenue, a company has to look after them (and be seen to do so).
Whatever the policy, procurement and chief financial officers play a large part in the process and it is important to get the executive board on side. If you involve them, then they can see how the right Travel Management Company: An agency which manages business travel for a company. can help them to achieve their objectives.
A US software company went out to tender at the end of 2016. “We created a multifunctional team, including stakeholders from business units, such as procurement, finance, senior executives’ PAs and frequent travellers,” says global category manager, meetings & events, Jef Robinson.
“We discussed requirements with a TMC and an RFP [request for proposal] was based on that. Buy-in from the business was considered critical, as was support throughout the process.”
Following an informal review of many contenders, it approached four TMCs, including the incumbent. The business was looking for a Travel Management Company: An agency which manages business travel for a company. to cover its global footprint and provide a similar experience to all travellers without the need to integrate with too many partner companies. Reputation and culture were also salient factors.
“We wanted a culture that aligned with ours (very customer focused), a robust VIP service for senior execs and PAs who spend significant time either booking travel or travelling, and integration with existing systems such as our corporate card programme, traveller security and Travel & expenses but can also be used to mean Travel & entertainment (especially in the US) technology. It came down to maximising efficiencies at the best possible value,” Robinson says.
The Request for proposal
Talk to potential suppliers both before and after the Request for proposal, which allows them to question you about your travel policy and objectives and lets you find out more about them. Limit the number of people from a Travel Management Company: An agency which manages business travel for a company. who come to the presentation and ask that those who do also include employees who are likely to work on the account so you can get a better feel for whether you can work with them, rather than senior executives who might never be seen again. Then visit their offices.
“With their proposal, you have read it; with their presentation, you have heard it, and with a visit, you have seen it,” says Ian Flint, director of travel and expense consultancy Inform Logistics.
Ask for references from your peers and existing or former clients of potential suppliers to ensure that reality matches promises. This is particularly important where an organisation is looking for sector expertise from its Travel Management Company: An agency which manages business travel for a company., such as financial, oil and gas or NGOs.
For a company that has offices worldwide and needs feet on the ground in many locations, it is important that the Travel Management Company: An agency which manages business travel for a company. has a global reach. Two options are that all business could go into one location and be fulfilled there, or booking could be made centrally and fulfilled locally.
“We had two big wins recently on our Follow the Sun service, a dedicated operation in three locations, which trips from one location to the other as the day progresses,” says HRG’s global sales director James Stevenson. “The client gets one number and a team that has access to all their information. It takes away the need for a 24-hour service.”
Splitting business between two TMCs that have strengths in the US and the rest of the world, for example, is a third option. Central collection of data is essential, with an agreement that one incumbent will feed that into the system of the other. Capability is critical in this scenario.
“Generally, a company wants to be matched to a TMC that is most suited to its volume of bookings,” says Adrian Parkes, CEO of GTMC, which represents TMCs. “But it also depends on whether it needs a specialist because it is in a sector such as marine, offshore or sports. It’s important to understand where you fit and the level of engagement you want from them.”
Size comes in the form of a combination of ownership or partnerships, but central control is essential. “Ownership in key markets is important, but you also need to look at the way in which a partner network is managed,” states HRG’s Stevenson.
“How long has the travel company been running a partner network? What is the average length of time partners have been with the network? That will give an indication of how experienced they are in giving global data.”
Other deciding factors are how practised partners are in working to global service level agreements (SLAs) and managing multinational clients, how partners are measured and how they judge success.
A partner may have stronger supplier relationships in its home market, but a potential pitfall with a partnership structure is that a global account can be relatively small in a local market, with the attendant risk that it will be treated as such.
Stevenson says: “If you are spending US$100,000 in one market, you want to receive the same level of service you get in a market where you spend US$10 million.” Consistency of service and clear, straightforward lines of communication are a prerequisite.
Ensure your TMC’s culture is compatible with yours. “You want as close a cultural fit in values as you possibly can; it is a people-to-people business and the right level of engagement of employees and travellers with the Travel Management Company: An agency which manages business travel for a company. you are bringing into the business is important,” says Parkes.
The US software company mentioned earlier worked on this basis. “The global presence with majority-owned local offices ticked many boxes, but it was the culture and technology that went a long way to driving a decision,” says Robinson.
In some companies cultural fit may cover corporate social responsibility issues, including environment, equality, community activity and more. Many organisations put such questions into an Request for proposal as a box-ticking exercise, but an Inform Logistics client is a major player in the environmental business and its Request for proposal includes issues such as carbon calculations and offsetting. “They cannot be seen not to be choosing that,” says Flint.
A Travel and Transport Statesman client used a sustainability programme for planting trees to give something back and improve the environment just to improve compliance.
“That is a really good way of making people do the right thing; the effects of the policy were very positive and had a positive impact on employees’ morale as well,” says joint managing director Mervyn Williamson. “Nowadays, these programmes can be of real benefit to travellers and an attractive part of a package, an important part of recruiting and retaining staff.”
Occasionally, the right Travel Management Company: An agency which manages business travel for a company. could put the wrong people on the account and the flexibility on the part of all parties to change that is crucial. “Once, I started working with a company and it became clear the team I had was not suited to the culture of the business, so I changed the team,” says chief operating officer of Wings Travel, Paul East.
Controlling expenditure and getting value are not mutually exclusive, but cutting transaction fees to the bare bones is not productive. A major proportion of a TMC’s outlay is staff: if you ask them to reduce costs they will, but the peanuts and monkeys analogy applies and that will be detrimental to the programme.
In fact, corporate cost-cutting has led to an airline-style unbundling in TMCs’ charging models and what used to be included free or as a matter of goodwill now comes at a price. “It is very important for clients to know what is included in account management. Some TMCs include everything, others make additional charges for all elements of the service, which may be unknown to clients at the time of contract,” says Statesman’s Williamson. “Beware.”
Procurement may be delighted that the cost is reduced, but if out-of-hours service, for example, used to be included and is now priced separately, on paper, it may look as though the overall price is lower. But there is a fallout because a buying team that is constantly travelling has inherited fees their cost centre has not budgeted for. But what comes around, goes around.
“Customers are starting to say, if we want these things included, what will the new cost be?” says ATPI’s Knights. “We don’t want any surprises.”
It is also important to involve your Travel Management Company: An agency which manages business travel for a company. in any changes within the company, so that it can understand the motivation for the change and change with you. Flexibility and agility are paramount.
Inform Logistics’ Flint warns: “Having a travel service is not a panacea for any problems a company had previously. Partnering with the right Travel Management Company: An agency which manages business travel for a company. will ensure the programme runs smoothly and all the objectives are achieved. A Travel Management Company: An agency which manages business travel for a company. is a catalyst to high levels of service and savings. It is not the main form of savings.”
The M in Travel Management Company: An agency which manages business travel for a company. is vital – management. “Working together is very important,” says Wings’ East. “We try to have a business plan with clients: what do you want to achieve in 2018? At review meetings, we work towards that; it gives a framework to relationships.”
A Travel Management Company: An agency which manages business travel for a company. should be able to manage an organisation’s suppliers, such as air and hotels, negotiate value-added deals, and consolidate meetings and events spend with transient accommodation for better rates. Also it should take a strategic approach to a travel programme to ensure value and duty-of-care, which should include considering behavioural change, such as moving meetings from peak to shoulder times. This, in turn, is less stressful for travellers, less expensive and makes the business more attractive to suppliers.
Expense management is also a widespread option from TMCs, whether they provide bespoke technology, such as HRG and Statesman, or through arrangements with third-party suppliers, such as American Express and SAP Concur.
Your Travel Management Company: An agency which manages business travel for a company. should be part of your team and share your goals. It should confirm what you know and tell you what you don’t, reflect your culture and travel policy, exercise duty-of-care and support your travellers. But any Travel Management Company: An agency which manages business travel for a company. is only as good as its brief and if you are unhappy with the way your travel policy is going, it is worth questioning not only your agent but also your organisation.