Tasked for years with squeezing every drop of savings from a travel program, some travel procurement professionals now say they increasingly are being called upon by C-level executives to focus more on the service they provide to travelers—and those executives also are showing greater understanding that better service and better savings are not always mutually exclusive.
During an April education session at an Association of Corporate Travel Executives conference in Miami, AstraZeneca global commercial leader of travel services Kerrie Henshaw-Cox said that during her three years at the company, she's seen a shift in the spectrum from savings to service. That has been coupled with a deeper understanding of why associates travel and how policy affects their ability to achieve those purposes.
"When I first joined, there was a focus and intention on savings delivery and reporting that," she said. "Now, we're really focusing on service, and that's coming from our CEO, whose message is to make AZ a great place to work."
Siemens Corp. director of mobility services Steven Schoen, speaking on the same panel, said he is receiving a similar charge, which is in part a function of the improving economy. His management now is focusing more on goals related to attracting and retaining talent, a task that becomes more competitive as the economy recovers, he said.
As such, he started a program last year called "Shake It Up," related to making travel management more traveler-centric, he said.
"Everything up until then had been top-down, and our goal was wanting the travelers to drive the program," Schoen said. "It's finding that right balance between service and savings. Management wants to see those savings, but they don't want their phones to be ringing about service issues."
That shift has brought a little more flexibility for travelers venturing outside of policy when there is a valid reason to do so. Henshaw-Cox said her organization has begun questioning whether the compliance reporting that it currently does even is right for the organization.
A traveler in Sydney, for example, recently declined a lowest logical airfare because of the timing of an Australian bank holiday, with the cheaper flight requiring him to spend more time away from his family. The manager approved the exception, Henshaw-Cox said. "That's a shift toward a service. The manager is saying, 'We want you to feel cared for and be effective when you travel.' "
Parexel International director of procurement and travel Benjamin Park said his company also usually approves such exceptions using common sense.
"Travelers can go a little outside the policy, which is not a bad thing, but we are able to report on this, and managers will see the report," he said. "They have the freedom, and if it's wrong, future behavior will be changed."
Park and Henshaw-Cox agreed that flexibility should not extend to an open-booking policy in which travelers are granted leeway to book however they like so long as they stay within appropriate budget parameters. Park said it was too big a risk, while Henshaw-Cox said her company "was not in the right place culturally to shift to that, although it does raise the question of travel-centricity."
A Broader Savings View
The buyers agreed that providing flexibility on such savings strategies as lowest logical airfare was not anathema to savings overall. Like Schoen, Park said his company faces strong competition in attracting and retaining talent, so an overly strict policy focusing solely on savings could cost the company as a whole more than it saves in travel dollars.
Parexel International currently is looking at what key performance indicators and metrics it could put in place to measure travel savings versus the potential impact of losing employees and having to hire new ones, Park said.
"If there are a little higher travel costs in comparison to higher human resources costs—on-boarding, loss of productivity—we're looking into any measurements internally to prove we might be better off investing a lot more into the people, without wasting money but keeping them a little more happy," he said. "We don't have the answer yet, but we're brainstorming around this topic."
WellPoint director of travel and events Cindy Heston said those considerations apply in procurement regardless of macroeconomic conditions.
"If you manage what you're procuring in an intelligent manner, you want to be more of a service provider, understanding the underpinnings of what is needed, why and what the value is," she said. "If you save 10 percent but it costs 25 percent more in internal resources, you've lost that trust with your internal client. It's still money; it's just somewhere else in the supply chain."
At times, it will not fall to procurement to make decisions regarding service. Even so, procurement professionals should be armed with data to assist with those decisions. Schoen, for example, said that after a decision to increase the list of business-class-eligible travelers, he presented executives with a report on how much the move would cost.
"They said, 'That's great data, and we'll adjust our budgets accordingly, but we have to do this in a competitive environment,' " he said. "We keep giving them the data, and they'll make decisions based upon what's happening in the space."
Of course, policies that meet travelers' expectations of service do not always require the most expensive option, he added. The company's hotel program includes limited-service properties, which are a direct response to travelers' desires.
"When we talk to travelers, even though everyone would love to stay in a five-star luxury resort, when we dig down, we see they want a clean, safe, well-located room with connectivity," Schoen said. "And that's what we provide to them."
This report originally appeared in the August 2014 edition of Travel Procurement.