CWT To Try Outsourcing Mid-, Back-Office Tech To Amadeus

Carlson Wagonlit Travel this week said it signed a memorandum of understanding with Amadeus to explore the outsourcing of some mid-office and back-office technologies.

CWT president of suppliers, products and technology Andrew Winterton told EuroBTN the deal would achieve material cost benefits to CWT and release internal resources to focus on customer-facing development but not impact customer-facing processes.

Winterton said the new relationship with Amadeus is focused on the "commoditized servicing aspects of our transactions," including functions like mid-office, quality control and back-office functions, such as invoicing, financial reconciliation and ARC reporting, but added, "It is not envisaged in any way that the user interfaces and business processes that our customers go through would be impacted by this initiative."

In addition to CWT's plans to leverage Amadeus' processing scale to create an "operating environment that is scalable and can support that volume of transactions in a more cost-effective way than we can do ourselves," Winterton said CWT is exploring opportunities with Amadeus to be more nimble in addressing changing requirements in the industry.

"There is a lot of work that we do that adds value to our customers because it needs to be done, but it's work that everyone has to do in the market," Winterton said. "For example, at the end of last year there were a number of changes in VAT issues within Europe, and we had to spend quite a significant sum of money enhancing our systems." Amadeus could make such enhancements for various industry players at "a community cost base," he added.

Winterton said Amadeus and CWT already are at work on the due diligence phase of exploring the terms of the deal so they can move the relationship forward. "It is anticipated that we will bring this to some degree of conclusion very quickly and we anticipate it will be a positive conclusion," Winterton said.

CWT expects the cost savings and value potential to be "material," though Winterton was reluctant to put a number on that. "We have an idea of how much value this will create for CWT," Winterton said. "At this stage, that is written on a white board, but is not in a contract."

This week's MOU announcement with Amadeus follows a newly inked long-term global distribution deal with the GDS firm and travel IT supplier, "reinforcing both companies' longstanding relationship," the companies said in a statement.

Amadeus executive vice president of commercial Philippe Chérèque in a statement this week said, "CWT's exploration of outsourcing reflects their commitment to focus on what matters most to their clients, namely productivity and smart travel management solutions. It also shows the increasingly important role Amadeus has as a technology provider to the travel industry. We look forward to the possibility of working with CWT on this initiative."