Pioneers Prepare Return To The Online RFP Trail

<B> Pioneers Prepare Return To The Online RFP Trail</B>

By Maria P. Vallejo

Business travel buyers who used the industry's standard electronic request for proposals last year have helped refine the process, and will continue to blaze the trail as the next negotiating season gets underway.

Many of these electronic RFP pioneers not only identified early difficulties with the new bidding medium--such as limited technology knowledge of hotels and travel managers, and receiving corrupted and missing file data--but also worked with technology companies to develop computer programs and internal hotel/corporate solutions that could improve the electronic bidding process this year.

"It's a brand new process, and there's going to be some bumps," said Kacy Coffman, vice president of business services for Denver-based JBH Travel Audit Inc. "This was the first time people put a concentrated effort into using the electronic product. People should realize that because it's an electronic form doesn't mean it's perfect."

According to the National Business Travel Association hotel committee's April survey, 16 percent of 202 NBTA travel manager members surveyed sent or received electronic bids in 1997. The majority of the complaints with the system centered around hotel companies' inability to respond electronically and correctly.

Rick Wakida, assistant vice president at Bank of America, and Jack Gonzalez, Sony Pictures Entertainment's director of corporate travel services, were among the electronic users surveyed. Wakida and Gonzalez's experiences mirrored many of the complaints and recommendations recorded in the NBTA survey results.

"People didn't have the technology access," said Wakida, who is chairman of NBTA's hotel committee. "I spent all my time talking and explaining this to people. I had to go through every step. For the smaller companies, there is a lot of resistance because of technology, and because they like the familiarity of paper."

Bank of America received more than half of its 439 RFPs for 1998 electronically. In a bid-request letter sent out in the second week of September, the firm requested that hotel companies and properties respond electronically within three weeks.

The first two electronic proposals, received by October, could not load into the complimentary RFP reader distributed last year because of data integrity problems. The standardized electronic RFP programs--including those launched by Lanyon, JBH Travel Audit and TravelWare Information--required that specific information types and character lengths be inputted into their 420 fields. Hotel officials not strictly following the instructions could throw off the RFP program and subsequent queries. Common mistakes included adding commas or quotation marks in the free-form information fields, which the computer read as a start of a new line.

According to NBTA's RFP survey, 59 percent of travel managers in 1997 received incomplete data, while 50 percent of the travel managers surveyed received bids with missing or incorrect data fields.

Bank of America's initial disks included erroneous or incomplete information that corrupted the files, preventing their import into the Microsoft ACCESS spreadsheet format, Wakida said. When filling out the RFP, hotel employees exceeded field lengths which deleted portions of vital information, such as blackout dates--days of the year when corporations can not receive their negotiated rates at specific hotel properties. Missing information was defaulted to certain answers when imported into firms' spreadsheets and databases, excluding some properties during certain query tests.

"It's very important that you fill out all the fields, because you never know what people are querying," he said. "There's a lack of understanding of how the fields work. They have to know what fields are important."

Bank of America last year ran several queries that narrowed its search for possible preferred hotel partners. Queries asked if properties complied with local fire law and the American Disabilities Act and accepted Visa, for example. If hotel companies responded "no" or left these fields blank, the computer removed them from the master list. The bank's query procedure automatically defaulted the blank fields to "no", eliminating compliant hotel properties that had neglected to completely fill out the form.

The company dealt with the same problems during the 1997 negotiations season, when it launched a customized RFP in an ACCESS format. Wakida in 1996 developed one of the first electronic hotel RFPs, which became a progenitor of the NBTA standardized electronic RFP. His initial electronic attempt resulted in 150 electronic bid responses out of 420 total property responses. The 15 disks containing the 150 electronic bids took less than 30 minutes to download, while two temporary employees spent two weeks keying in the remaining 270 paper bids. The bank switched to the standard NBTA version to receive greater comprehensive bidding information from hotels.

Despite the difficulties with receiving accurate and complete data, Bank of America will continue using the electronic RFP process, hoping for a two-thirds to three-quarters electronic response for 1999 negotiations. The company eventually plans to use the electronic process overseas, although most of its efforts to make electronic bidding a common negotiations method will remain domestic for now. "I would hope the evolution of the process will force everyone to use it," Wakida said. "A lot of it is to get the hotels to use it. They should try to provide electronic RFPs especially when requested."

NBTA's RFP survey showed 81 percent of hotels last year could not or would not send bids electronically.

Data integrity issues were not confined solely to travel managers. Travel agencies that tried to use the electronic RFP system last year encountered the same obstacles. "The 1998 bid was the first widespread usage of the electronic process, and there were some formatting errors that caused problems for both agencies and corporations. The quality of data from most hotels was poor," said Bruce Speechley, vice president of business development of Arlington, Texas-based Lanyon Inc.

Lanyon this year launched a validation option to accompany its electronic RFP program in time for the 1999 negotiations round. The validation program is built into the electronic RFP and prevents hotel companies from closing and returning an electronic bid unless all specified fields are correctly and completely filled out. The program, initially developed for Lanyon's agency clients, now is being made available to travel managers, though the cost has not yet been determined.

The program addition was the result of a December meeting of hotel customers and travel agencies. Lanyon built individual "maps" for each agency or corporation that include a built-in validation program attached to the companies' RFP program of choice, either the NBTA standardized or customized version. Agencies paid a minimum of $3,000 for this, depending on the complexity of the requests.

Other RFP vendors and travel managers suggested requiring hotels to check the validity of electronic bids through RFP readers distributed last year. Corporations using the readers for 1999 negotiations must remember to request the updated version.

If hotels input complete data following the basic regulations of each field, the bids will load directly into the reader; if information is missing or erroneously inserted in certain fields, they will not load. This could save travel managers significant time in returning invalid bids to hotels this season.

The key advantage of the Lanyon validation technique is that it specifies which data field is empty or corrupted, while the process of reloading the bid into the reader does not tell the hotelier the exact field with a discrepancy.

Beyond missing or incorrect proposal data, last year many travel managers and hoteliers simply did not have the technology background to send or receive the electronic bids. Sony Pictures Entertainment in Culver City, Calif., for example, found that 450 out of its 600 solicited hotels could not send their bids electronically last year, Gonzalez said.

Sony used an outside consultant last year to create a customized RFP format that easily downloaded into the Excel format, Sony's preferred spreadsheet program. The two-page RFP used portions of the NBTA standardized version.

Most hotels bidding for the Sony account sent their bids in the traditional paper format because they could not access the diskette containing Sony's customized RFP. The company started receiving phone calls from hotels declining to use the electronic process by mid-October.

<B>Inconsistent Hotel Tech</B>

"We didn't anticipate, and probably should have, that not all hotel chains have the same technological abilities. They're all on different software," Gonzalez said. "Even with a chain like Sheraton, some were able to access it and some were not. I ended up getting the RFP forms on paper, because they couldn't access what we sent them."

This negotiating season, Sony will not use the electronic RFP. The company most likely will outsource the project because of a 25 percent growth in its travel program. Consolidation of overseas offices into the program warranted the switch from an internally handled to an outsourced process. Gonzalez did not rule out electronic bidding completely, though; he plans to wait until the technology is simplified to ease the burden on all vendors and users.

Hotel companies cannot take all the responsibility for improving the electronic bidding process. Travel managers also have had difficulty adapting to the electronic negotiations. Wakida said travel managers or corporate technology staff members must have computer program skills to run specific queries on bid data and to import RFP information into corporate databases and spreadsheets.

Proponents of the NBTA standardized electronic RFP suggest that many of the technology problems would be alleviated if the industry moved to the standard. Although some travel managers said they shied away from the standardized electronic RFP because 420 fields was too many, they can customize the format to their corporate spreadsheet by importing fewer fields and querying for specific data.

"Their adoption of the standardized RFP format brings everyone on the same playing field," said Charles Kao, managing director of TravelWare Information Systems in Culver City, Calif. "People understanding and adopting the electronic RFP takes time. By adopting this format, they're not tying their hands down. They don't have to fill all 400 fields out.