TQ3 Travel Solutions has launched a subsidiary called TQ3 Mobility Solutions that extends beyond the traditional remit of travel management to car fleet, insurance, relocation and mobile telecommunications. Arnaud Ameline, vice president of the Paris-based division, said there are already 20 clients onboard, most seeking management of just one of these expenses. However, he believes that by 2005 companies will see "the big picture" and will be seeking consolidated management and purchasing of all expenses relating to employees when they are away from the office.
According to TQ3, the Fortune 2000 companies spend an average €200 million per year on mobility services, yet their consolidation of this area is so poor that they can save 15 percent to 35 percent if they launched a determined strategy to bring all this expenditure together. Tentative evidence that the market is moving toward Ameline's line of thinking comes from BTN's own 2003 Travel Manager Salary & Attitude Survey
(BTN, Aug. 11). It revealed that the percentage of travel buyers whose job includes corporate fleet and leasing responsibilities leaped from 20 percent last year to 32 percent this time around. Managing mobile phone contracts jumped from 17 percent to 29 percent.
Expanding from travel to a wider conception of mobility represents an opportunity not only for such business travel agencies as TQ3 but also for travel managers keen to demonstrate strategic, consultative and entrepreneurial skills to their corporate masters. Certainly that is the belief of Nadine Dewart, EMEA travel manager for BMC Software and also EMEA chair of the Association of Corporate Travel Executives. BMC is one of the first clients of TQ3 Mobility.
"A recent study by ACTE about the changing role of travel managers showed how important it is to be open to ideas and sell them internally," Dewart said. "This is a good way to enlarge your function. It is a good idea for travel managers to start to dig around subjects like mobile phones, fleet and insurance, particularly in situations where these have not yet been analyzed or followed in the company. It is worth checking whether anyone has control over them."
Geoff Allwright, EMEA travel manager for Intel, also believes mobility is the coming sector. "It's a flyer," he said. "Intel has all these groups talking to each other, though not under the same management."
BMC is at an early stage of its relationship with TQ3 Mobility, which Dewart is hiring to manage its employee car fleet on an outsourced basis. BMC operates a small fleet in all of its European markets but has hitherto managed it on an ad-hoc basis locally. After commissioning TQ3 Mobility to audit its operation in the Netherlands and Italy and identify savings, Dewart is considering a financial offer to outsource administration and organization of BMC's entire European fleet. Since Dewart believes there is no single car fleet provider good enough to meet its needs in all markets, TQ3 Mobility would have the task of managing the contracts with several different suppliers and acting as the single point of contact.
Dewart is confident there are substantial savings to be made and that it makes sense to outsource to a third party that has the requisite expertise, especially at a time when it is difficult to put new employees on the payroll. "There are a lot of hidden costs in fleet management and, if you are not professional about it, many mistakes can be made," she said.
TQ3 Mobility has launched initially in Europe, focusing on fleet, business jets and relocation. It plans to expand to the United States and a wider range of expense categories in 2004, with a target of breaking even by the fourth quarter.
"Large sums of money are spent on mobility with hundreds of suppliers, with the reporting coming from all over the place," according to TQ3 Mobility's Ameline. "Little is being done to manage it, yet the number of people spending more than one day out of the office per week is increasing, and the cost of looking after them is also increasing."
Ameline argued that travel management companies had not widened their offering to a full mobility program before because clients had not switched to that way of thinking. There are a few pioneering exceptions—such as Siemens—that have appointed vice presidents for mobility. The main reasons mobility has remained unmanaged are that it falls between several different internal functions, including human resources, IT and finance, and because some of the mobility items, such as insurance and telecommunications, have become significant expenses only recently.
"In the old days, each department used to manage its own IT needs, but now there is a chief information officer who has brought it all together and outsourced much of it," Ameline said. "Right now, there is a need for a mobility function within companies and it too will move toward being outsourced."
Ameline acknowledged that any attempt to define a mobility function within a company will lead to conflict over which department handles what, and telecoms could be a key battleground. It is certainly one category where there is often scope to bring purchasing disciplines to bear. "We would like to consult on defining and applying mobile phone policies, which tend to be very poor," he said.
TQ3 Mobility claims it is the first provider of integrated mobile services and that its main rivals will be in the individual expense sectors, such as fleet and insurance brokers. However, other travel agencies certainly have had a stab at some of the categories, even if they have never marketed them as a coherent whole.
TQ3 president and CEO Marc Hildebrand served a lengthy apprenticeship with Hogg Robinson, owner of much of the Business Travel International network. Hogg started life as an insurance business and still markets itself as a corporate services company. Among the activities it has been involved in are employee benefits, fleet management, accident management and relocation. Hogg corporate and marketing director Christopher Fry said BTI also gives ad-hoc consultancy on mobile telecommunications.
American Express also has done some work in telecommunications, mainly by encouraging clients to track and control employees' mobile phone expenditures by putting it through their corporate cards.