MasterCard Worldwide has enhanced a benchmarking tool lets companies assess their travel programs by comparing them to the best practices of similarly sized companies. MasterCard plans to announce the enhancement this week at the National Business Travel Association 2006 International Convention and Expo in Chicago.
The tool, known as the Purchase Optimizer, first was launched in October, but was limited only to purchasing card programs in its application. Its success was a key factor in its expansion into travel applications, said Marcie Verdin, vice president of the large-market segment for commercial payment solutions at MasterCard.
"It was well-received," Verdin said. "We had demand to support companies of all sizes on it, as well as add travel and fleet."
The survey takes place on a co-branded Web site of both MasterCard and the relevant card issuer and provides actionable information to midsize and large companies. It's designed to take about 30 minutes and generate a program-specific report that not only benchmarks the current status of a travel program, but also estimates financial opportunities and gives recommendations and resources for improving the program. Benchmarks, which measure against companies with similar attributes, are built from assessing hundreds of programs across multiple industries.
Research used in the tool comes from Boston-based Aberdeen Group, as well as MasterCard and other research sources. It's designed to be self-populating, so as more companies use it, the data resources available for benchmarking will grow over time.
"Once there's sort of a critical mass of people who've gone through the tool, we'll be able to benchmark specifically within the respondent base," said Lalig Musserian, director of research and sales operations for Aberdeen Group. "We can create sub-benchmarks, and say what the broader research says and what our respondent base says." Aberdeen Group eventually will publish the findings of its research earlier this year related to the Purchase Optimizer, Musserian said.
Companies begin by providing profile information, including annual revenue, number of employees and percentage of revenue that comprises their travel and entertainment budget. They also can enter the issuer and provider for all cards that they use, including those not supplied by MasterCard.
Companies can select what goals they have for their program, whether they want to reach best-in-class levels or simply improve their current program on a smaller scale. Issuers are able to put in their own recommendations and offer their solutions or toolkits to companies, a feature that Musserian said appealed to clients' needs based on Aberdeen Group's research. "People wanted to inquire with banking partners and card issuers for solutions," she said.
Mining the information also will benefit MasterCard, Verdin said. "It creates an environment where MasterCard is known for providing the best information," she said. "The tool works for us, because we can publish more research on what companies are doing and thinking about."
The Purchase Optimizer showed its usefulness recently at the National Association of Purchasing Card Professionals conference in April, Verdin said. Members collectively took the test and cumulatively showed a lot of need for improvement, including issues with enterprise resource planning system integration.
"I was surprised, still, by how far the programs were from being best in class," Verdin said.
The Purchase Optimizer comes after MasterCard's late June name change from MasterCard International to MasterCard Worldwide. While the Purchase Optimizer upgrade is not directly tied to that change, Verdin said it fits in with the direction MasterCard has been heading on the corporate card side.
"MasterCard has been an innovator. There are benchmarking tools that have been out there, but not to this level," Verdin said. We're trying to be best-in-class on information delivery, and this completely fits into that."
Corporate card programs generally are a very mature part of the business travel market, so card companies increasingly are looking at innovative ways to increase marketshare. American Express, for example, has offered co-branded airline cards and enhancements to its reporting tool to the less-mature midmarket
(BTN, April 3).As seen with the Purchase Optimizer, MasterCard increasingly is focusing on data services.
"The tie is to our whole applied-intelligence focus," Verdin said. "You can't be at the heart of commerce unless you're growing beyond payment."