Agent Retention, Service Drive Barclays Bank's TMC Bid

London—Barclays Bank has consolidated from 16 travel management companies to one, following an invitation to two short-listed TMCs to propose detailed business plans as the basis of their potential contract. Among the details were offers of incentives to front-line agents both to stay on the Barclays account and to meet service level agreements.

Barclays, a large global travel buyer, spends about 60 percent of its annual travel budget in the United Kingdom and another 30 percent in the United States, principally New York and San Francisco. The bank went out to bid in July 2003 with a request for proposals drawn up in collaboration with U.K.-based consultant Ian Flint.

After analyzing the responses and carrying out site visits, Barclays drew up a list of two global travel management companies that previously had provided it with service.

Barclays asked both candidates to draw up a detailed, three-year business plan that would become the basis of the contract for whichever of the two proved victorious.

Among the issues included in the plan were a service-level agreement, specification for providing management information and online booking. It also detailed how much each travel management company committed to save Barclays, with savings to be benchmarked against the bank's negotiated airfares and hotel rates. A further incentive was built in to produce savings on transaction costs.

"We wanted to tie the candidates down to hard facts and deliverables," said Barclays Bank head of group travel Toby Withnell. "It was also the basis of their presentation to our travel advisory committee, which needed to see a readily understood structure of things like SLAs and what reports would be produced. The agents were very surprised to be asked for that level of detail at that stage of the process, but the feedback afterwards was very positive."

Ultimately, Business Travel International won the Barclays contract. Although figures only now are being finalized, Withnell said projections for year one look to have corresponded closely to the true figures for the savings plan and service level agreement.

The one part of the business plan that is set to substantially vary is implementation of a self-booking tool. Originally, Barclays intended to introduce BTI's own booking tool in year two. The bank now is having second thoughts and has decided to assess all opportunities on the market.

Barclays made its final selection of BTI in September 2003 and started the switchover from 15 other TMCs in December. Within one month, major locations such as New York, Singapore and those businesses in London not already handled by BTI had moved across. BTI now handles more than 95 percent of Barclays' travel expenditure, extending across 17 countries. Africa and Australia, the main territories still awaiting consolidation, are set to be complete by the end of this year.

Withnell said the rapidity of the consolidation can be attributed in large part to successful retention of implant staff from other incumbent TMCs. European employment legislation dictates employees working on dedicated accounts must be offered the opportunity to switch to the travel management company that takes it over. This can prove a double-edged sword, but for Withnell it not only accorded entirely with his wishes, he rewarded agents for staying.

"It was worthwhile for the stability this brought us," he said. "A lot of travel management still has to do with relationships and if the travel bookers are happy, it makes a big difference. A couple of those who moved across had been with us for years and were highly respected. Service issues are far more important than some people think."

The SLA between Barclays and BTI also financially recognizes frontline TMC staff. Performance is reviewed on a quarterly basis and if reservations consultants reach an agreed minimum standard, then all are rewarded with bonuses.

Many of the factors on which they are assessed are familiar, such as answering the telephone within a set number of rings, accuracy of documents, timely production of tickets and compliance in booking preferred suppliers.

More unusually, agents also have to answer a five-question quiz on Barclays' travel policy.

"It has helped performance because staff realize they are being constantly monitored," said Withnell. "The basic SLA is the same across regions. BTI jumps very quickly if there are problems because it knows they could impact the whole global agreement."

Withnell joined Barclays in 2002, after two years of managing European travel for Merrill Lynch. Previously, he was with BTI, working for its U.K. operation. Withnell joined Barclays to spearhead the globalization of its travel program, which meant consolidation not only across regions but also across business divisions, or "clusters," as they are internally known.

Soon after arrival at Barclays, he formed the travel advisory committee, consisting of senior management from each cluster, and it accepted his recommendation to consolidate to a single global travel management company.

Although Barclays has been consolidating with BTI for less than a year, Withnell said the benefits already have proven significant, especially in terms of streamlined management information reporting.

This has been useful for two reasons: The first is security and safety, a leading issue at the bank. Withnell now can pull up a consolidated real-time report of where travelers are in the event of a terrorist emergency or a problem like the severe acute respiratory syndrome outbreak of 2003. The other advantage is supplier leverage, such as the ability to consolidate expenditure of travelers based both in the United Kingdom and the rest of the world.

"We are in a much stronger position for something like our London hotel program," Withnell said. "Before, we may have had the data from the United Kingdom and New York but not from the rest of Europe or the Far East. We have almost doubled our recorded volume at some properties."

Improved data also has paid dividends on Barclays' deal with British Airways, its principal preferred airline. The bank has brought more countries into the deal, so that it now extends to travelers flying into the United Kingdom, as well as out of it. At the same time, the more complete picture has enabled Withnell to negotiate a series of smaller deals with other airlines on a limited number of routes.

Withnell has worked toward improved supplier relations through the streamlining of travel policy, something that was introduced before the travel management company consolidation. Working with the travel advisory committee, Withnell introduced a group-wide policy. It offers a minimum requirement onto which the business clusters can build demands that are more suited to their particular needs.

However, the group policy has introduced some requirements across the board. One is that all travel needs pre-trip authorization. "All businesses have found this good for controlling spend," said Withnell. Authorization is made by e-mail, which is not only efficient, but highly effective if the brakes have to be applied to spending. Last year, the bank shrank the list of senior managers who could authorize a trip request.

"The number of trips instantly dropped 20 percent," Withnell said. "It is a very good way of controlling expenditure."