2009 Large Market Benchmarking Report: Co. Seeks Total T&E Compliance

Thomas Barrett, director of strategic sourcing for Ingersoll Rand—which continues to integrate his previous company, Trane, following last year's acquisition—this month spoke with Business Travel News senior editor Jay Boehmer about supplier receptivity, compliance and the budget planning process.

BTN: A lot of companies are in the budget planning process. How will things look next year?

Thomas Barrett: Many of us go through the budget planning cycle, but I don't think I've ever heard any company say, "We're expecting a great year, increase your travel budget by 10 percent." Budgets are going to continue to be tightly constrained and probably under even more rigor than in the past. That's not to say it hasn't been rigorous in the past. Through all the planning and all the meetings, there's a lot more of that rigor going on, but we've always valued productivity and aimed to meet our customer requirements.

BTN: According to our large market research, about 45 percent of respondents said that airlines have been more receptive to negotiating pricing agreements. What have you found in your discussions?

Barrett: For organizations that can demonstrate data, demonstrate commitment, demonstrate management support, the airlines are being as attentive to our requirements as they can. That being said, I still think it requires us to deliver a value proposition across all sectors.

We have a global, consolidated program, so we have got to be mindful of the market dynamics in every single location. In some cases, with the requirements in our foreign cities, we have to be mindful about what the dynamics are—schedule, prices and so forth. It's easy to do the long-haul, but it's the local markets, the technology that brings it all together, the faring rules, the ticketing and the level of sophistication that are different—that get more complicated.

I feel we demonstrated what we were doing and brought them all into the fold about how we were globalizing our program. We've demonstrated ourselves to be able to report consistently, show and deliver the low-cost opportunity and value proposition to all of our travelers. We have been rewarded with good dialogue. The fact is that our analytics show that we are performing and they are being receptive and responsive.

BTN: It seems that hotels have been even more receptive to pricing discussions this year.

Barrett: As we bring both of these companies together, there will be a rationalization process. We've had an RFP and brought in all of the hotel vendors, and we are working to rationalize that, because there are a lot of locations. We've seen good receptivity and I think it remains a buyer's market, even as we move into 2010. But, like with air, it's going to be how well you manage the program. If you're just everything to everybody, you may not get the same receptivity.

BTN: Are you finding more opportunities to achieve savings through policy rather than the negotiating table?

Barrett: We continue to communicate broadly across all areas, whether it's the online channel where someone sees a pop-up message or online portal messages or direct e-mails from senior leadership. We still talk about compliance and using the preferred credit card and making sure you're using the preferred vendors through all the data mining that we do. It's still very important for us to do those things. Because if everyone complies with these actions, you will find that the savings is all there.

BTN: Where else are you focusing on compliance?

Barrett: We're really focusing on watching the entire T&E process. You focus so much on the air, and the hotel and car rental, and we get huge compliance in these areas, but we're starting to look at every other area that is charged on T&E. We're looking at credit card delinquencies and all those numbers. We're spooling up more reports from the expense-reporting tool. We're a very compliance-driven company and these technologies allow us to report more, and we get more requests for information.

BTN: Where is that request for information coming from?

Barrett: The CFOs of our business sectors. We've begun to broaden and refine reports so you can see a lot more data. We're trying to make them more actionable. Management loves seeing those reports, but they want them faster. It's hard to keep the agency as the sole police entity. There has to be overall P&L accountability for each manager. The biggest challenge we see is the airline reporting cycle: It's so lethargic that by the time ARC closes and it comes to the travel agency, there's such a lag.

BTN: One policy action that seems to have grown in popularity is pre-trip authorization. Have you put in a place a pre-trip approval process?

Barrett: If you withhold ticketing until the time of approval, then the fare perishes. We've established what we call passive pre-trip approval, which means the manager will get a notification, and they have time to call the agency and cancel that trip, but I don't want to stop that booking before then.

BTN: Are you leveraging your meetings and transient travel spending?

Barrett: We are. We're going with a new tool for our meetings department, but we also have integrated those small meetings into pre-packaged opportunities for our local businesses. We have a small meetings desk. Managing meetings is the last frontier in many areas. In a world where more managers are becoming self-sufficient, this is an area where they're not. That's why we have tried to provide more tools.