Datalex Enters Buyer Desktop Monitoring Tool Market

The revitalized field of contract performance measurement is getting more crowded and perhaps more automated with the entrance late last month of Dublin-based Datalex Inc., which said its Cognizer Web-based analysis tool can help maximize air, car and hotel contracts by taking data from virtually any source.

While travel management companies provide monthly reports that buyers use to measure their bookings, such traditional reporting is the tortoise in a race with suppliers—particularly airlines—that have made giant strides in using data to track corporate accounts. Some carriers are using daily global distribution system reports and products from the likes of Albuquerque, N.M.-based The Prism Group to more strictly enforce corporate contracts.

As airlines have armed themselves with the tools to weed out poorly performing clients, some corporate travel buyers have responded by purchasing analytical tools and services that go beyond the standard agency reports.

Similar to Prism and Solon, Ohio-based Travel Analytics, Datalex is not owned by an agency. Most megas offer performance monitoring tools. American Express has not said its product, known as Deal Power, is available to other agencies. While they serve mainly clients of their parent companies for now, WorldTravel BTI's Travel Procurement Solutions and Rosenbluth International's Eclipse Advisors were set up as subsidiaries partly in an effort to market to competing agencies. TQ3 Travel Solutions partners with Travel Analytics, and Carlson Wagonlit Travel monitors performance through its Symphonie suite. Datalex is a provider of Internet booking engines to such travel suppliers as Amtrak and Delta.

While the competitive picture continues to shape up, buyers are finding that each vendor has a unique style that blends differently the mix of technology and purchasing know-how. Those seeking to take performance measurement to this next level need to weigh the cost of contract monitoring services against their own skill sets and needs.

Datalex believes corporate buyers have the expertise to do most of the analyses themselves, given the right technology. The company's patented Cognizer, developed in earnest this spring, is designed to measure the past and expected performance of existing strategies and identify where employee behavior is undermining goals, and what other opportunities may exist for realigning purchasing strategies. Cognizer also verifies the applicability of negotiated contracts and identifies uncovered needs, Datalex said.

According to Jon Matejcek, Datalex vice president for corporate solutions, buyers can query the system to identify, for example, "bookings at a given property that offers lower rates than your best contract hotel in that city." He said the system also can alert the buyer of published rate changes as well as the achievement of specified contract goals. Buyers typically discover gaps in their preferred supplier coverage, he said, "months after the fact, or worse, natural market conditions can outperform even the best negotiated contracts."

Matejcek said the Cognizer software is hosted by Datalex and does not require integration with other platforms. Contract terms are loaded by the buyer or, for a fee, by Datalex. Accessed on the desktop via the Web, "the tool does the work," said Matejcek, noting consulting services also are available.

He distanced Cognizer from existing offerings, saying the other products are intensive manually and costly, though he did not reveal pricing for Cognizer.

Other vendors did not claim to take in data more frequently than monthly, nor did they say buyers can use their products without consulting expertise, but they did question how much data buyers really need and whether they have the time or the skills to go it alone. They also said the freshest data sometimes are not the most useful. Nevertheless, some said, Datalex could succeed.

"Real-time data sounds sexy, but it's only any good if it's actionable," said Michael Boult, COO of Eclipse Advisors in Philadelphia, which claims more than 50 clients. "We don't have a desktop model. We talked about it and the customers segmented themselves into 'Yeah I'd like that' and 'I'd try it' and 'That's what I pay you for.' The last view won the day."

Boult said Eclipse's Dacoda product is "the only one that uses linear programming to optimize contracts. Datalex is crowding the field further, but we were doing this six years before anyone even thought it was a good idea."

Matejcek's description of Cognizer, which currently has fewer than 10 users, seems to put it in closer competition with Dacoda than with Travel Analytics' Bravo or Travel Procurement Solutions' measurement tools, which rely on a concept of simulation rather than optimization.

According to Travel Analytics CEO Scott Gillespie, "We thought about selling copies of our software for about two seconds, but most buyers don't have the time or interest to learn it, and sometimes they don't know what features they want or really need. As far as real time data, we do not do it that way. We feel that pre-ticketed data is very noisy and it also doesn't account for cancellations and other post-reservation activity."

"On the surface, getting it daily sounds like a good idea," said WorldTravel BTI vice president Bob Brindley. "But is getting it daily instead of every two weeks or monthly going to give you a better answer? Well, there probably is a market for it. Much of it is up to the buyer. Some basically like to get the data and want to do the analysis, others want another viewpoint. I think they can automate the reporting but they can't automate the intellect."

Buyer needs indeed are mixed, said Santa Clara, Calif.-based consultant Bob Lichtman of The Corporate Solutions Group. "I know travel managers who ask for specific reports and they are very satisfied with them. Then I know people who rely on canned reports that TMCs tell the buyer they need to have, even if they're of little value. It depends on who you talk to. Large corporations manage their own contracts and they do have the skills and resources. If anything, the agency is responsible for helping implement them."

"We're doing it hands-on," said a TPS client, preferring to remain anonymous, who took the project in-house on his second go with it. "TPS trained the agency people here instead of bringing them in again and incurring the cost of their expertise. But the sheer amount of data does make it difficult and time-consuming."

Most buyers interviewed last week by BTN prefer to leave the hard work up to the provider.

"I'd rather have it outsourced," said Eclipse customer Robert Hosking, travel director at BMC Software in Houston. "My responsibility is much wider than that, and we can't be experts on everything. I think if you look at most corporate travel departments, they are getting slimmer."

Another Eclipse client, Pittsburgh-based Westinghouse sourcing lead Vince Plocido, agreed. He also said monthly data is probably enough, though that might change. "With the airlines threatening to micromanage their contracts more, more frequent reviews may be prudent. But that remains to be seen."

Chicago-based Aon, one of nine very large Prism corporate clients, takes reports monthly. "I wouldn't need it more frequently, but I'm sure there are companies that would," said vice president of corporate travel Harriet Washburn.

Datalex said it plans to offer Cognizer to both corporate travel managers and agencies. "There are huge opportunities among, I'd say, the top 50 agencies. Even number 50 has a large enough collection of customers that they can view the volume in aggregate. We're also looking at channel partners, though TMCs are not cash-rich right now. It may be more a matter of going to market together."

For Eclipse, Boult said, "We have shared our technology with other TMCs and we're in the midst of business discussions about that. There's still some nervousness on the part of the megas about whether their value proposition disappears if they offer Dacoda."

Brindley said that while TPS does have users who are not WorldTravel clients, BTI affiliates are the only other agencies to which it has offered services. "We're still viewed as a competitor and we think working with WorldTravel gives us more opportunity," he said. TPS claims more than 100 customers.

Other developments in this area involve new ways to apply the results of such analyses to the point of sale, namely through corporate self-booking tools. Travel Analytics recently joined Amex and Eclipse in announcing a connection with Sabre's GetThere booking tool, simplifying the feed of contract specifics for the purposes of biasing the display toward preferred vendors.