The U.K. and Ireland's Institute of Travel Management outlined plans for restructuring at its annual general meeting and conference on April 2. The association proposes to put in place by year-end equal voting rights for buyer and supplier members, although the chairman will continue to be a buyer, and buyers will retain majority representation on the board of directors.
ITM will also broaden the definition of what constitutes a buyer to include more individuals who manage an organization's travel on an outsourced basis. Two potential examples quoted by ITM chairman Tom Stone are the U.K. travel managers for PricewaterhouseCoopers and Glaxo SmithKline, both of whom are employees of the travel management company BTI UK.
ITM is reacting to accelerating changes in its membership, with an increasing number of traditional travel managers losing their jobs either to general procurement personnel within their own organization or outsourced travel management providers outside it
(BTN, March 15). Ironically, travel manager membership of ITM rose 19 percent between 2001 and 2003 but, Stone said, the institute has to change to survive.
"We are reliant on suppliers not only for finance but for resource and time," he said. "Our buyer members are working longer hours and because they are increasingly non-specialized purchasing people, their employers are becoming reluctant to let them put the time into ITM. We need to democratize, which means opening up to suppliers more and giving them voting rights. Doing nothing is not an option. We want the membership to understand that we can have a discussion about what the change will be, but what is not up for discussion is change itself."
ITM is embarking on a consultation period on its proposed changes and will take a vote on a final draft at an extraordinary general meeting in October. The restructure will take effect in January 2005, three months earlier than originally anticipated.
The widening options for who manages an organization's travel program were underscored at a heated debate on outsourcing at the ITM conference. Center of attention was Corin McGrath, head of travel services at Xchanging Procurement Services. Xchanging handles indirect procurement, including travel, on an outsourced basis for defense contractor BAE Systems among others. Xchanging does not receive a fee from BAE. Instead, it takes a share of the savings it makes. Xchanging handles £35 million (nearly US$64 million) in air spend per year.
McGrath was unapologetic in stating the main reason companies turn to outsourced procurers. "Organizations are not going to outsource to improve their customer service levels a notch," he said. "The purpose is to save money. That's the long and the short of it."
Travel managers on the same panel suggested that outsourced procurement companies could never truly have the interests of all clients at heart and that they would find it hard to engage with the culture of an organization. McGrath acknowledged that cultural sensitivity was his company's greatest challenge but he warned travel managers that change was likely to be made over their heads. "The decision to outsource is not related just to travel," he said. "BAE outsourced virtually all of its indirect spend to us and the decision was made at board level."