Healthcare and information services provider McKesson has
reaped rewards in the past year from making creative use of dynamic messaging
and other efforts to drive compliance, enhance reporting and wield data during
McKesson's recent focus on demand management gave the travel
program the opportunity to flex its muscles through policy and automation, with
the support of its travel management company, Travelocity Business, and its
GetThere online booking tool, said procurement travel manager Yoichi Miyazaki.
"The best savings is to talk people out of travel, and
the best way we can do that through an online booking tool is through dynamic
messaging," Miyazaki said. "That's something we have worked on for a
little over a year. When hotel choices are listed, we have a message that says,
'Please do not stay there,' when it is a hotel that is outside our list of
preferred hotels. In one city alone, it increased the bookings of preferred
hotels by as much as 10 percent."
Another example of dynamic messaging, Miyazaki noted,
involves booking in advance, a practice from which he said the company finds
valuable savings. For those who are booking within seven days of departure, he
said, there is a message that asks, "Why are you not booking in advance?"
The messaging prompts a dropdown menu of reason codes that are reportable and
alert managers, he said.
Miyazaki said McKesson has had a seven-day advance purchase
requirement for three years, and that the dynamic messaging made it more
visible in the past year.
McKesson, which has a growing sustainability program, also
is using dynamic messaging to promote green practices. "Not traveling is
the best green option," said Miyazaki, who also said the company, a launch
customer for Cisco's TelePresence, uses the high-definition videoconferencing
technology in four major locations and one dozen smaller ones across North
In addition to applying directional dynamic messaging for
air and car rental suppliers, Miyazaki said McKesson two years ago began
exploring the idea of creating online supplier merchandizing. Since then, he
has seen that placing banner ads for specific preferred vendors on the search
screen has helped drive marketshare, particularly for a new preferred car
rental supplier. Miyazaki credited merchandizing on the site for driving use of
that supplier "from zero to 50 percent within three months."
He also put it to use in driving compliance to McKesson's
preferred airlines. "Because of the coverage that our travelers need, we
need a lot of carrier contracts," Miyazaki said, "but 70 percent of
our spend is with preferred carriers. The banner is a really important tool to
manage that. There has been a double-digit increase to 78 percent in the use of
preferred carriers in recent years."
He said that he also has made great use of the data the
online tool provides. "In this past round of airline negotiations,"
he said, "I was able to determine each carrier's net effective discount,
which was a great thing to have."
To raise compliance, Miyazaki has held monthly webcasts to
educate employees and get their buy-in for corporate procurement goals,
initiatives and policies.
McKesson spent $43 million in U.S. booked air volume in 2009
and has 32,000 employees. While it has a global travel policy in place, its
individual business units can and in some cases do have stricter policies.
"Each business unit has a compliance champion with their own goals,"
Miyazaki said, "and we work with them to make sure that they get the
reporting they need to address it."
McKesson has a policy of using lowest logical nonrefundable
fares, with which 93 percent of its tickets are in compliance. About 92 percent
of its tickets are booked online, of which 95 percent are handled without
manual intervention through fulfillment.
Miyazaki said another benefit of the tool has been a rise in
the reuse of nonrefundable tickets. Today, he said, "71 percent of all nonrefundables
are reused. Before we started using the Travelocity/GetThere tool for that, we
were doing 50 percent or so." While happy with the progress, he saw room
for improvement. "I think we can do better," he said.
While using nonrefundables provides overall savings of about
10 percent of McKesson's air spending, including any penalties for change fees,
Miyazaki said that for tickets booked online, use of nonrefundables provides a
savings of 28 percent versus refundables. "We have taken this information
internally to promote great use of online nonrefundables," he said.
Miyazaki said that McKesson recently focused on automating
non-profile travelers, and 100 percent of recruitment prospects are going
through Travelocity Business. He said this created internal savings because for
those without changes, "no one has to touch them anymore."
At the beginning of last year, McKesson also consolidated
its two sizable divisions in Canada with Travelocity Business, which from day
one showed 95 percent compliance. Miyazaki said the move produced
"transaction fee savings of 70 percent and the consolidated buyer power
resulted in 3 percent more in discounts for local carriers."
This story was originally published in the July 12, 2010,
edition of Business Travel News.