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As corporations evolve their travel management programs, many buyers must choose the most effective structure to manage the categoryon a worldwide basis. Procurement executives with four multinational companies outlined for participants at an Association of Corporate Travel Executives meeting here this month how they organize programs ranging between $20 million and $1 billion in annual travel and entertainment expenditures.
Accenturebegan consolidating travel and events globally in 2001, beginning with travel agencies, online booking tools and global metrics. It has continued to evolve the program to leverage spending, focus on the traveler experience, optimize cost levers and implement demand management. However, the strategic goals have remained consistent for the past decade, according to Mary Bastrentaz, Accenture senior director of global travel and events. The goals are to "drive for cost efficiency, optimize use of technology, track performance, influence behavior, provide a positive traveler experience," and expand collaboration and best practice sharing.
Accenture currently uses a dual-agency approach around the globe, with Carlson Wagonlit Travel serving it in 34 markets--about 80 percent of its business--and American Express Business Travel handling the remainder in 14 markets. Online adoption for 21 markets is at 80 percent. Around the globe, the company uses one card, American Express, for its $1 billion of spend, of which air comprises $622 million and hotel represents $314 million. However, Bastrentaz said she is currently leading a travel agency and technology transformation to move to one agency and technology platform around the globe. While Bastrentaz is responsible for contractual relationships with suppliers, she relies on "influence and collaboration" with team members in 13 geographies around the globe to identify the best solutions for each region. Monthly, the regional leads of travel and meetings hold a conference cal on which "I share the strategy and vision; they are the ones responsible for executing to that strategy," Bastrentaz said.
Last year, Bastrentaz "successfully focused on consolidating Accenture's $200 million in meetings spend, leveraging the success in travel management to further drive down meeting costs and standardize polices," Georgetown University McDonough School of Business professor and deputy dean Ricardo Ernst said in introducing her.
Accenture's approach to travel management allows the travel team to share best practices, gain the trust and confidence of local leadership and a "better understanding of local market needs." The structure, Bastrentaz noted, is "more expensive," and decisions can take longer. "But the decisions are a lot more solid," she added.
After it acquired Trane last year, Ingersoll Rand"senior management really looked at the best of both worlds and decided the best way forward for the company," said Pascal Struyve, Ingersoll Rand Enterprise Services global director of travel, fleet and meeting services. "Luckily for me in the area of travel and meeting services, the Trane model was chosen as the way forward. Based on that Trane model of consolidation--making sure we had a standardized approach--we are now in the process of implementing this to all regions."
When its vision is fully implemented, Ingersoll Rand will use BCD Travel in 46 countries and a Citigroup card program in 44 countries, according to Struyve. The company currently spends about $60 million on air travel, has 464 preferred hotel properties globally and spends 2.11 percent of its sales revenues on travel. The global team is based in China, Europe, India and the United States.
The model began to emerge in 2001 as American Standard Companiesexpanded its program outside the United States with WorldTravel BTI as its global agency. By 2006, the company had consolidated in EMEA with a centralized service center model and implemented standardized travel processes globally. That company became Trane, now part of Ingersoll Rand.
"A true global program would have simply the same processes and methodology everywhere; I am not a believer that that works," Struyve said. Instead, his team tries to "consolidate on a global level, create a global framework" and make sure that local employees have "room to operate based on their local habits, needs and culture." For example, policy and reporting may be the same framework, but how pretrip approval is handled in a region would be left to the region, he explained.
"I have never had so much attention about travel in an organization. It would have been a dream before to roll out a fully global program in a new company that hadn't heard of consolidation in, say, a year or year and a half," Struyve said. Previously, "I had to beg almost for months and months before a senior vice president or president could spend 10 minutes with me. Now, they're calling me to ask if I have 10 minutes for them. It's a very strange world, but I'm very happy about it."
Meanwhile, Parexel Internationala year ago implemented a global approach to travel management, according to Cynthia Crooks-Garcia, vice president of worldwide procurement and travel. Supported by four procurement executives based in Asia, Germany, the United Kingdom and United States, Crooks-Garcia last May deployed a global travel policy and a year earlier launched a global corporate card as the first steps to gain insight on travel spending at the fast-growing company with operations in more than 60 countries. The UATP card is now used in nine countries across the Americas, Asia-Pacific and Europe, and a payment tool administrator is in place as deployment continues around the globe. Parexel reported 2008 travel volume of nearly $17 million in the United States and C$1 million (US$888,000) more in Canada.
The four travel procurement specialists and Crooks-Garcia are focused on consolidating payment forms and agencies, as well as on launching an online booking tool, first in the United States, Canada and United Kingdom, then in Continental Europe, Asia-Pacific, Latin America and South Africa. Along the way, Crooks-Garcia said the strategy is to consolidate small meetings and eventually the company's large meetings.
"Right now, we have a very, very fractured program. We've brought it down to 70 travel agencies--that's a lot because we're only operating in 66 countries," Crooks-Garcia said. To bring the program together, Parexel decided to use the payment tool as the foundation to "understand where our money is going. We're currently doing an RFP for travel agencies in the U.S. and U.K. and then will expand that through Western Europe, Eastern Europe and Asia-Pacific."
Growing by acquisition during the past two and a half years, Crooks-Garcia said the company "is very focused on where do we do things the best, and how do we do them?" Consequently, "a lot of our policy work is coming out of Asia-Pac," project management in Berlin and imagination and strategy in Waltham, Mass.
Eighteen months ago, Microsoftrestructured its travel and auto procurement as a global category--the only one within the company--that reports into headquarters instead of geographic regions. More than 15 people based in regions around the globe report to senior procurement director Mark Evans to help manage the program. The structural switch was made, Evans said, because "we thought we could better leverage" the spend and "escalate" relationships.
Microsoft uses American Express in 53 countries and the American Express card in 63 countries for its air spend of about $400 million and hotel spending of about $200 million. After deploying an Amex card in 1982, an agency relationship in 1994, online booking in the United States in 1996, Microsoft began consolidating travel in Europe, the Middle East, Africa and Asia in 2004 and reorganized as a global travel team in 2007. This year's major effort is a global agency request for proposal, Evans said.
Supplier leverage for responsiveness and financials, best practice sharing and resource flexibility and support are among the advantages of the global structure, Evans said. But the configuration also presents challenges: remote leadership, morale with a virtual team and inclusion in regional procurement office activities despite the global reporting structure.
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