Procurement.traveleditors convened a roundtable of industry experts to discuss the evolving role of corporate travel managers and buyers. Participants included Concur executive vice president of worldwide marketing Mike Hilton, Atlas Travel International vice president of corporate business development Cindy Sauter and Acquis Consulting Group managing partner Randy Kane. All three participated in The Beat Live's Keynote Vote. Using the research collected and presented in this report as a starting point, these executives discussed meetings management, industry certifications, the role of social media in managed travel programs and key lessons for tomorrow's buyers. Procurement.travel's Jay Campbell and Mary Ann McNulty moderated the roundtable in September 2010 during The Beat Liveconference in Chicago. Excerpts follow.
McNulty: What changes are you seeing in terms of procurement being the department with which you deal?
Hilton: Now it's a fact. Procurement is where travel exists. I don't think it's a trend anymore. Certainly, with our customers, it has changed the nature of people who manage travel. They've moved away from things like customer service for their employees and travelers. A lot of the softer benefits have gone by the wayside as a result, and it's become a much more bottom-line-focused function, for better or for worse. What's interesting now and becoming a new trend is the traveler becoming more of a stakeholder. Technology is enabling that. Travelers have a lot more choice and more control. The new trend is people having to get back into things that used to be important, thinking a lot more from the traveler's point of view and providing solutions that matter to the traveler. People aren't entirely sure how to go about it. It's coming around full circle.
Kane: I agree there are definitely some things that are procurement-focused that just don't work in travel. Looking at every single thing as a number and taking people's frequent flyer miles to bank and use for company business just does not make sense, but procurement could tend to have that focus. Better organizations are learning to better manage it as a service.
Hilton: The new "aha" for buyers is that traveler satisfaction actually drives savings, and it's what makes the travel category.[PULL_1]
Campbell: What do you think this means to executives in the C-suite?
Hilton: They have segmented their approach. They want procurement, and travel underneath it, to quantify savings to achieve the best things that they possibly can to improve the bottom line, to look to pull cost drivers out wherever they can. But there's a growing focus on applying mechanisms within new opportunities and new strategies, and ways to create different versions of their companies, be it in green or social media or all the things that you are asking in your survey. Companies are getting wind that it's good to do things to save money, thereby improving the bottom line, but we need to find better ways to interact with our customers. We need to find better ways to ensure that we are better corporate citizens in terms of being green. And we need to find better ways to make our employees like life better, because they are working harder, sometimes for less money now.
Campbell: Are you seeing travel buyers who are responsible for social media?
Hilton: Social media is certainly on the minds of travel managers today. It is a part of a bigger issue, a move to a much more traveler-centric frame of mind in corporate travel. A lot has changed in the past two or three years. There is still a decent degree of fear and lack of understanding of how it can actually be an asset and a tool to help them. There is also a lot of need for education, overcoming the fear factor and finding points of proof that there's actually benefit here.
Campbell: Cindy, who typically are your contacts at midmarket companies, and do they have any orientation to this travel social media stuff?
Sauter: If we knew, the process would be a lot shorter. A lot of procurement people and human resources, for the most part; they are first-time travel buyers. We often hear, "I am here because they tell me this is a part of my job now. I haven't the vaguest idea of what I am doing, and I don't travel. So lay it on me."
Kane: This is a remarkable industry. I checked into my hotel on Foursquare and within 25 minutes of doing that, someone from the hotel's Twitter profile thanked me and asked me if there was anything they could do to help. That's the kind of company that you want to deal with. There is somebody within a company with significant corporate responsibility, somebody reporting to either the chief marketing officer- or the chief operating officer-type level, who understands that this is a budget that is needed to drive their companies forward, and very, very quickly. It's not just a travel manager's responsibility or the head of procurement or global sourcing. They play a role in it.
Sauter: When you talk about marketing, we started on Facebook and we have Yammer internally and we tweet and do all those things. We can get the information out there, but we don't know if people want to read an advertorial from their travel management company on the Facebook page. What we do know is that people want to know what is going on as quickly as possible. So we are looking at some kind of an interface that will allow our travelers to talk to each other and we kind of stay out of it.
Kane: It's not just, Jay and I get along really well; Jay thinks I have a good take on technology, and I think he has a good take on content within the industry. He thinks that I have a good opinion on airlines. If I have a bad experience on United Airlines, he is going to start to think that same thing if we converse through Twitter and other things. Not to mention new sources, it's faster than anything else in the world. Period. The plane lands in the Hudson River--it was on Twitter before a news station called NY1 that is dedicated to nothing other than news in New York City. Twenty minutes--that's eons. So companies, certainly in the travel management perspective today, not only need to get a hold of that but push that up so there's corporate responsibility for social media.
Sauter: The bottom line is that the traveler is going to do what the traveler wants to do, period. And they are the ones who are going to decide what they think is the best way to get their travel procured for themselves. We talk a lot about the fact that we want to move from telling them what they have to do to enabling them to do the right thing and putting the tools in their hands. It is going to make it easy to do the right thing and yeah, we want you to use this online booking tool, but in exchange we are going to connect it with your smartphone and your expense report--it's going to take you two seconds to do your expense report and you're not going to have to carry receipts anymore. We are saying we are actually going to make life happier for you, and we are not about punishing you for doing the wrong thing.[PULL_2]
McNulty: What other skill sets seem to make a difference for buyers?
Kane: I was genuinely surprised by the lack of certification in the survey because the procurement-oriented certifications are critical. Over time, that's a must-have. If you want to be a travel buyer, you need to have some degree of accreditation. It tells me that there is probably still a lot of transformation left to go. If you cannot speak that language and don't have a sufficient level of expertise going in, it will be challenging to be successful over time. Travel, more than most things in the world, is a very complex chain. There are a lot of players involved and being knowledgeable in the industry means having the good sense to deconstruct and understand what drives price and what ultimately drives savings and value. More awareness is going to serve buyers over time.
Sauter: People don't have the certifications because they don't have the time right now. They've got 25 hats, and they are taking classes in all kinds of different areas--especially in companies that don't have dedicated travel departments.
Kane: Strangely enough, I don't actually think it's about the certification. A really good ancillary question to that is, "How much ongoing education do you get every year to keep current and expand your thinking to become more versed in how things are going to change?" There are a lot of people in the procurement industry that have a bunch of letters after their name who I certainly wouldn't want doing procurement at my company. Applying principles today that you got a certificate on in procurement 15 years ago is irrelevant. There are some data principles, but the data has changed a tremendous amount and the industry has changed a tremendous amount. There are things that airlines care about today that they didn't care about 15 years ago, and hotels and rental car companies and any other category in procurement.
McNulty: Half the buyers surveyed said they were responsible for their organizations' meetings management programs. We asked them to identify their organizations' meetings spend, and a significant portion could not. Are you seeing increased pressure on buyers to try to manage this?
Kane: The survey confirms what my assumptions have been--it has been identified as a spend category that has opportunity, but it hasn't been wrestled to the ground yet. The fundamental problem is meetings spend historically has been so massively distributed. It's just a hard thing to consolidate; that's why buyers never cared about it up until a few years ago. You have a lot of complex things that interweave. It can be internal budget control and politics--sales forces want to own their events without the travel managers involved. Everybody wants to see it as a huge opportunity--maybe one of the biggest left--but we're still very much in the middle of it. It's going to be a long time before you see meetings management truly centralized and managed effectively. It has less to do with technology or the opportunity being there, and more about history, decentralization and internal control issues.
Sauter: I'd have to agree. It is something that we need, as an industry, to learn more about because we, as an industry, have been focused on air, car and hotel. It's a lot more than that now.[PULL_3]
Campbell: What is the one thing that buyers should educate themselves about?
Kane: I still don't think it's the travel managers' responsibility for social media in a company, but they should be aware of the interactions with the companies that I travel with, that I rent cars from and the hotels I stay in. There should be an integrated strategy of what I tweeted about or posted on Facebook, and on which blogs I am commenting. I'm not talking about a Big Brother approach; the world of social media is very open. I wouldn't be posting something if I didn't want other people to read it. The premise of the travel manager being able to understand how his travelers are dealing with their day-to-day use of this procured service is really important. He's going to be able to take that and six months later, or a year later, when it's time to renegotiate a contract, actually say, "Your pricing is great, but you treat our employees like crap. By the way, the 15 free upgrades are not going to cut it this time. I want to understand how you are going to care about what our employees think." If I had to pick one thing that the travel manager needed to get better at, it's really understanding the gap that exists between their reporting responsibility to procurement and the CFO and their responsibility to the traveler.
Hilton: The tools a buyer can have now to manage spend are significantly greater than they were five years ago. The power of the data that you can have at your fingertips is one of the single greatest things a buyer can do to continue to add value, to differentiate themselves, to make a difference in their role. The power of data and the ability to actually analyze your travel spend is huge. It's been one of the big changes that has occurred, and if you don't fully understand that as a buyer, that's a huge opportunity.
~Compiled by Lauren Darson and David Jonas