Encouraged by the initial success of its data-driven approach to identify and influence travel spend in 23 countries, MeadWestvaco is repackaging its travel management program with a more unified approach, requesting global bids for a travel management company, travel and entertainment card, car rental company and airline consulting firm.
While the company has had a "very mature program in place in the United States," where BCD Travel is the designated agency, it didn't have a firm grasp on the category in the rest of the world until recently, according to Marie Caiazzo Clarke, global travel services manager.
"There had just been set up prior to my arrival 18 months ago a relationship with Radius Travel Management in 14 European countries where we had a presence," Clarke said. "Other than that, everything was operating relatively decentralized. We didn't have visibility into a lot of spend" or, in some instances, know what other areas of the globe were doing with regard to travel management.
"At a minimum, we have collected data from all the different travel management programs that are now regional programs," Clarke said. All TMCs around the globe now funnel data into one data management tool provided by BCD Travel. MWV also collects post-travel data from American Express cards and dozens of financial systems. Procurement is pulling travel-specific data from each of the financial systems and "dumping them into one business warehouse to give us information from all over the world on expenses. That's one area where we have great information."
[PROFILE_1]A 30-year travel veteran who has worked in travel agencies and for a meeting technology company, Clarke identifies which data elements to pull into a data warehouse to analyze.
Merging Of Cultures
MeadWestvaco during the past decade has melded two distinct cultures: Dayton, Ohio-based Mead Corp.'s and Stamford, Conn.-based Westvaco's. The companies merged in January 2002, by 2006 chose Richmond, Va., for its combined global headquarters and this year moved into its new headquarters building.
In recent years, MeadWestvaco also redesigned its supply chain management initiatives into a center-led operation, focusing on six elements, as described by execs: "measure what's important; common goals drive common behavior; common processes support collaboration; own all information; invest in training; and focus on the prize."
In travel, the company merged two policies. "One company was more process oriented, the other more paternalistic or based on the premise that employees would just do the right thing," Clarke said. A single policy emerged in the United States, but the company has gradually revamped policies elsewhere. "It's still not global, but it's happening. We just wrote our European Union policy, a China policy and we're rewriting our Brazil policy," she said. "By next January, it will end up being one policy with addendums for regions."
In major locations around the globe, Clarke identified lead travel administrators with whom to communicate policy initiatives and advance objectives. "We bring them together on the phone at least once a quarter. The communication piece is invaluable," she added. Some travel leaders reside in procurement, but "some are executives admins; others are office managers. It depends on the culture of the office," Clarke said. "We looked at the largest-spend countries and made sure we developed appropriate relationships to implement initiatives, such as an online booking tool." In Europe, the company implemented an online booking tool in four countries last year.
[PULL_1]In Brazil, where the company enjoys an online booking rate of 86 percent, Clarke said, she looks for success factors that can be applied elsewhere. Business is booming in both Brazil and China, she noted.
While mature, the U.S. program needed some fine-tuning. Online adoption was just 9 percent in 2008. "Last year, we ended at 41 percent," said Clarke, who boosted adoption through "word of mouth, training, repetitive communications of the benefits and some incentives that were just fun competition between business units." Clarke also reached out to admins for assistance in booking travel online.
"I did an analysis of what MeadWestvaco paid per city pair for traditional transactions versus online. There was a $127 average savings between traditional and online, and that had nothing do with agency transaction fees. This is all visual guilt." Clarke said the company doesn't mandate usage, but she noted that "if we were, here's what we're looking at" on savings.
Clarke also documented substantial savings from a hotel request for proposals process she conducted with 208 properties through the BidStork hotel RFP tool, now branded as Sabre Hotel RFP. Although time consuming, Clarke said the learning was worthwhile and savings "fantastic" from various rounds of online negotiating.
Exploring Options Globally
Despite the successes to advance its travel management programs, procurement pushed for a global bid process for a new travel management company, travel and entertainment card and car rental programs and "it's all out for bid right now," Clarke said. A variety of reasons, among them "visibility, security and, obviously, cost savings," prompted the bid processes.
Company executives wanted greater TMC support for a newly established operating center in Geneva, as well as enhanced visibility to all spend data. The company asked bidding agencies for both global and regional bids. Since "80 percent of our spend is out of the United States," Clarke said, "we may end up keeping regional travel management companies.
"I know that the true success of the program is appropriate account management, the front-end agent team, and the ability to implement and communicate internally. Those are the three success factors. Forget about the reports, online booking and tools--[travel management companies] all offer the same" things, Clarke said.
"We are a manufacturing company. Our travelers need good support" from a TMC, whether it is booking international trips or ensuring the issuance of visas. "With limited resources internally, we'll make our decision based on the strength of account management and the quality of agents."
The company also opted to bid its T&E payment card business on a global basis. Employees use a variety of individually billed, direct billed and lodge cards today. One of the reasons for the global RFP, Clarke said, is to identify the exact numbers of corporate cardholders and travelers. She estimates the total to be about 6,000 cardholders. She also would like to find a payment solution for the burgeoning China market.
Another project on the table is soliciting bids for a consultant for a "deep dive on airline contracts. I'm trying to get creative and think I may be pioneering a global point-of-sale airline contract. I want a no-smoke-and-mirrors airline analysis."
Revamping Expense
Changes also are planned for expense reporting. In the United States, MeadWestvaco has been using an IBM expense system that it has branded MeadWestvaco Travel Vision. It also recently outsourced the back-end processes--the help desk and receipt auditing--to a third-party firm. However, executives decided to extend use of its SAP enterprise resource planning solution to expense management and soon will begin the planning for that transition. "We are starting the design for the U.S. piece of the transition in November. The company plans to roll out the new SAP-based solution, housed in the SAP human resources module, first in the United States and "then use it as a template through Europe," where MWV has already deployed SAP HR.
"It sounds a little splintered, but our company is moving in one direction under the tagline of 'one MWV,' and that's what we're moving toward in travel, too."