Upon returning one year ago to the buying side of travel management, MathWorks corporate travel manager Priscilla Campbell was challenged with reconstructing MathWorks' global travel policy and hotel program. The goal was to uncover additional savings opportunities during economic turmoil and to optimize the program in preparation for the rebounding business travel levels expected next year.
The travel policy at MathWorks--a technical computing software developer based in Natick, Mass., with customers in more than 100 countries--relied on the employees to "do the right thing," but the approach left too much up to interpretation, according to Campbell. With the challenge of keeping flat a $13 million travel budget, she realized that much needed to be altered.
"We had a lot of guidelines in place, but the language was very soft," said Campbell, who previously served as the hotel senior practice leader at American Express Advisory Services. "That had a lot to do with our culture, where employees are entrusted to make the best decision for this company. The big guiding principle here was to spend money as if it were your own."
Campbell suggested that policy language be revised to state that travelers should at the very least book with preferred suppliers, which ultimately would facilitate future supplier negotiations.
"For a lot of [the new employees], this is their first job and they need more guidance, and for some of our more seasoned travelers, who have traveled all over the world, the definition of how to spend money is very different from a young, new person," Campbell said.
Fortunately, senior executives agreed that stronger policy restrictions were a priority. In the new policy, travelers are expected to stay Saturday nights when traveling overseas, are given a meal per diem and are expected to stay either at preferred hotel properties or--if a preferred is not available--midscale properties.
Although MathWorks "had not gone so far as to put [hotel rate] caps in place," travelers were given "some kind of benchmark to shoot for," Campbell said.
Campbell also seeks to be more proactive by developing better pretrip guidelines within the travel policy, she said. By including pretrip authorizations, managers become more aware of travelers' expenses and therefore can help contain costs. "We need to know that the managers are taking accountability for authorizing travel," said Campbell. "If that trip doesn't have enough return on the investment, then it needs to be deferred or [cancelled] altogether."
Expanding The Hotel Program
In addition to the travel policy, Campbell created a new hotel program. MathWorks previously had contracted rates only with properties that are close to headquarters, despite operating 13 office locations worldwide. Campbell developed a global request for proposals to secure negotiated rates with more properties. The process included bids with new hotel suppliers.
Like many others, the MathWorks hotel program was not immune to faltering market conditions and had to be renegotiated once published rates began to fall below corporate rates, Campbell said.
"It was pretty discouraging because we just went through this sourcing effort and got a whole new directory in place with many more preferred hotels only for a few months later to find that we were able to get a better rate," she explained.
When Campbell went back to the drawing board, she found that suppliers were willing to come back and offer better rates, "but it still needs to be monitored," she added.
"[Suppliers] are working with us to not only provide us with rates that are in line with what the market is today, but they are thinking creatively," she said.
For example, hotels have offered discounted Thursday through Sunday pricing below the company's negotiated rates; reduced rates on stays longer than five days; provided free transportation to meeting locations; and offered other special promotions in addition to the reduced rates.
Moving forward, Campbell hopes to establish a better rapport with preferred hotels, and she said more concise data will prove to suppliers that contract terms are being met. The rollout of a preferred corporate card by year-end should help in that effort by driving more bookings to the MathWorks Concur Cliqbook online booking tool and travel management company Travizon. Campbell estimated that MathWorks currently captures data on about 50 percent of bookings.
"At this point in time [lacking data] is really a handicap for us," said Campbell. "It's hard to operate blind without that data. You take that for granted. Not to have it has been a real challenge."
Preparing For 2010 And Beyond
As of September 2009, MathWorks' spend is down 40 percent compared with the same time last year, surpassing its original goal of keeping spend flat. Much of this is attributed to cutting the bulk of internal travel--Campbell acknowledged that this year's success coincides with the economic environment--and the company in 2010 expects to increase spending back to pre-2009 levels.
"If the economy hadn't gone down ... we wouldn't have had the opportunity to really take a hard look at changing our practices and procedures," said Campbell. "It is a significant cut, but we also recognized that it's not sustainable because we have to get our business back on track again, and travel is a big part of that.
"Once 2010 rolls around, the amount of our travel increases, but in a more controlled and strategic way," she continued. "Our travel will be smarter and more productive."
For next year, Campbell intends to extend the recently renegotiated hotel contracts. "I am reluctant to say that I am confident we can get our rates reduced, but now is the time to explore that opportunity," she said. "We have to keep up with what is happening in the marketplace because as the hotels are facing the 2010 season, it will be interesting to see what they do with rates."