Dean Forbes
Corporate booking and expense management technology provider KDS in February hired 31-year-old, ex-Oracle vice president Dean Forbes as executive vice president for worldwide sales and marketing. Forbes had led international sales and commercial activity at project portfolio management software provider Primavera before Oracle bought the company in 2008. Forbes told Management.travelhe has learned that corporate travel management is more complex than he thought when he was a very frequent traveler, while "at the same time, there's so much opportunity for increased efficiency and further optimization." Describing how Primavera spent about 11 percent of revenue on travel, Forbes said, "I could easily have halved that if I cared about it for more than 10 minutes. And we sold that company, so I think there was more money to be made in that acquisition process if we would have written another million dollars up to [earnings] instead of spending it on business-class travel." Forbes also described how KDS is experimenting with a new approach to client relationships, in which the company charges for consultative services based partly on travel spending reductions, rather than only on traditional software fees.
How have you adjusted your preconceived notions about corporate travel management?
One of the best things we can do at KDS is to further simplify what we deliver. I don't necessarily mean that from a product standpoint, I mean that from a messaging standpoint, because what we really sell is just return on investment, so when I look back and say I could have halved my spend at Primavera, I never talked to anyone who was interested in halving my spend. I talked to people who were interested in selling me a self-booking tool or more travel management services or reward points. But no one said to me, "You're spending 11 percent; how about we help you make that 6 percent." That's an avenue we'd like to pursue at KDS so we can improve the way we partner with our customers and ensure they're successful--to make sure [they know] we are clearly committed to them saving money through working with us. I underestimated that before I came to KDS. I was trying to figure out how to make this an interesting software play, and now I'm trying to make it, with Yves [Weisselberger, KDS CEO] and the rest of the management team's help, an interesting partner.
There has been a lot of discussion about return on investment, and one of the harder parts of that is how you assess the revenue potential of a given trip. What are your insights on that?
As far as ROI is concerned, we have this total travel and cost of trip capability where our customers , if they so choose, through the configuration can attribute every step an employee takes back to a customer, prospect or project. So for our customers, they can always look back and say, "I booked 100 flights, 80 were to our top 20 largest prospects, of which we won 16, and the revenue output was four times the cost of the travel. Seems like good business." The ability to always mark back the travel and all the costs to a prospect, customer or project is the first and biggest step toward helping customers say, "Here's what I'm getting in return." So that's step one, but the strategic answer is, when we engage our customers and they're spending $10 million a year on travel, we want to partner with them--and we're trialing this with a few customers right now and it's going incredibly well: We're saying, "You're spending 10, we're going to make that six and you're going to travel as much if not more than you did for 10. How about that?" Customers have fallen over themselves to go into the process we have defined to make that happen. In one case, they're trying to drive down their carbon footprint as well.
Does this kind of cut compromise the quality of travel in terms of class of service?
No, the only place we do it is when it should never have happened. One of the customers we're looking at right now, we found so many times that people who weren't eligible for business-class travel booked in business class. So, yes, there will be huge savings by preventing that.
This is more of a consultative type of role that you might expect from an independent consultant or travel management company. Is it a particular initiative that you brought forward?
It's new since I arrived, but I'm the driver insofar as I think the opportunity here at KDS is to help customers optimize travel and expense. But the process I described--the team came up with that. We went though a number of iterations, trialed it at two customers and the response couldn't have been better. It is far more consultative, I agree. It doesn't compete with the TMC because, more often than not, we need their help to deliver the level of savings we're pitching. It engages the customer in a different way than they're used to from either a TMC or booking tool provider.
Is there an added cost?
The pricing is based on a percentage of the savings. It's difficult because the money we get is a percentage of savings, but it is still linked to a number of transactions that will take place. For the sake of making it clear, percentage of savings would be the right way to position it. The only reason they want an online booking tool is to have a more cost-effective way of booking and to ensure policy compliance. So if we sell them an online booking tool and they don't achieve those things, we failed. We may have got some transaction revenue in the process, but we failed ourselves and the customer. That's why I think this new approach has been so well received. There is no lose for them. The only gamble is that if they engaged us in a more traditional fashion, it might have cost them a little less overall, but if they take this option it costs a little more but they're buying a comfort level that they'll save millions.