DuPont Auction Helps BTI Win Global Biz

Echoing a front-page story in the first issue of Business Travel News 20 years ago this week, DuPont has selected a travel management partner for a broad consolidation of its corporate travel management program. Two decades ago (BTN, May 14, 1984), DuPont departed from conventional wisdom by selecting Rosenbluth International rather than American Express as the agency to help it consolidate its U.S. travel program. This time around, DuPont has departed from convention by using a unique auction process as part of its selection of BTI as its travel management partner in consolidating travel globally.

The auction, which DuPont used as only one component of its selection process, defined seven areas for making direct pricing comparisons: overhead, management reporting, emergency 24-hour service, international rate desk, managing the global hotel program, traveler tracking software and online fulfillment.

Limiting the price comparisons to seven components left less room for confusion than having competitive bids that bundle too much into the price quote. "We only auctioned off elements that were very distinct, objective and easy to define," said Mike Kamps, executive buyer for travel and fleet services. He noted that pricing was only one part of the selection criteria. "We looked at pricing for seven specific elements and then pricing for all the other services," he said. "All that rolled together was less than one-third of the value of the total."

As a result of the process, DuPont, which in 2003 had $62 million in U.S. booked air volume and $140 million in worldwide air volume, signed a five-year deal with BTI for global agency services. Last month, DuPont implemented WorldTravel BTI in the United States and Canada and this year fully will roll out the agency in more than 40 countries.

Kamps and Susann Bell, manager of DuPont Business Travel Services, headed a team of seven people who did the evaluations and translated them into numerical values, starting with the RFI process and then adding the auction results, the final RFP and a workout session with finalists. "We were scoring all along in an organized and controlled way and assigned values that were rolled up from each of the seven of us," Bell said, referring to the group of DuPont travel managers representing South America, Asia/Pacific, Europe, Mexico and the United States. "Everyone's vote was counted equally."

Bell and Kamps figured out how to use an Ariba tool that already was being used for sourcing at DuPont to do the auction and how to make that part of their global agency RFP process. "Mike and I were in a conversation about it with someone who had used it, and we created a different way of doing it. There was no format for us to follow. We wanted to combine the best of both of those worlds to select the best global travel management company for DuPont."

The reasons DuPont decided to choose a single travel management company to serve its multinational needs were to generate better information, increase procurement leverage and have the capability of rapidly locating travelers for any kind of emergency. That decision coincided with a corporate reorganization and a globalization effort in place at DuPont for more than one year. The first step, Bell said, was to line up senior leadership support and to follow its Six Sigma methodology, which includes securing the voice customer by sending out a survey that got responses from 3,100 travelers, travel arrangers and managers about their concerns and service needs.

In early fall of 2002, Bell and Kamps made a detailed presentation to DuPont's chief procurement officer and director of human resources, in which they proposed to begin the effort to select a global travel management company in six months. The response from their bosses: "How about doing it now?"

That November, they convened a meeting to create a timeline for the project attended by the global travel management team, senior leadership, a Six Sigma blackbelt and consultant John Caldwell. "Mike and I felt strongly that we add a consultant," Bell said, "because we have limited resources and were looking for organizational support."

Kamps called Caldwell, who is president of Caldwell Associates, "a tremendous help. He's done this more than once in 20 years. He is particularly knowledgeable about supplier strengths and weaknesses and metrics around performance and costs in certain parts of the world. He was a very professional facilitator of the process."

In February of last year, the team issued a request for information that was strictly about the capabilities that DuPont was looking for and also asked for references.

In May, the team sent out requests for proposals to five travel management companies and stated the seven elements that would be included in the auction, but not in the RFP.

In June, after sharing the definitions of the seven components and developing them further with the five companies, DuPont held its auction.

The DuPont auction, which lasted a little more than three hours, gave "suppliers an opportunity to demonstrate how competitive they want to be," Kamps said. However, the low bidder was not necessarily the lowest bidder on price, since the pricing for those seven items were not the bulk of the costs. "It was one part of the pricing and the pricing was one part of the total," Kamps said. Other factors included technology, service, safety, geographical coverage and online booking capability.

Following the auction, the team selected three finalists and in October invited them to make presentations and provided an overview of how they wanted to conduct workout sessions. The team made its final recommendation to senior management in early December. In January, DuPont and BTI finalized and signed the contract and began work on implementing the agency in the United States and Canada.

Part of the reason that the process was able to go as smoothly as it did was that DuPont travel management already had been consolidated in every region. Rosenbluth International had been the agency in the United States and in several countries in Asia/Pacific. American Express also served countries in that region and Mexico, while Carlson Wagonlit had been the travel management provider in Canada and BTI was the incumbent in Europe, where it will be re-implemented under the terms of the new deal.

Bell remembers well DuPont's domestic consolidation 20 years ago. In 1984, she joined DuPont's internal communications department, where her first job was to create an employee communications program to tell them about their new travel agency, Rosenbluth.

Of course, selecting and implementing BTI as its global agency is only the beginning of this new consolidation effort. The real payoff in going global will come from negotiating with suppliers, but DuPont is realistic about just how global those negotiations will be.

"We all throw that word 'global' around," Bell said, "but often things really are working intra-regionally. We may be more ready to operate globally than many of the suppliers. There is a lot that the industry needs to do, but if you never start you never get there."