BTN Names '04 Int'l Travel Manager Of The Year: ChevronTexaco's Godfrey

Business Travel News named Nancy Godfrey, global travel manager for ChevronTexaco, as the 2004 International Travel Manager of the Year during last week's Association of Corporate Travel Executives conference in Stockholm. BTN recognized Godfrey's efforts to lead a travel management consolidation that was truly worldwide in scope. By the end of this year, ChevronTexaco will be using a single agency, Carlson Wagonlit Travel, in 40 countries, representing 95 percent of its travel spend.

There are two outstanding aspects to Godfrey's achievement. The first is how she balanced the potentially contradictory requirements of standardizing processes globally while giving each region of the world genuine input into decision making. The second is that she embarked on this ambitious project with a well-defined goal in mind—a goal she partially has reached less than a year after implementation began.

"We consolidated because we were experiencing the age-old problem of obtaining data and then leveraging it with suppliers," said Godfrey, who manages an estimated total travel and entertainment spend of $250 million. ChevronTexaco introduced a renewed worldwide air program on Oct. 1 that sliced a further 12 percent to 13 percent off a $120 million bill that already was well-managed, by the standards of most corporations. "Consolidation helped us finish the air program," Godfrey said. "There was a time when the airlines knew our business better than we did. We've closed that gap."

Godfrey joined Chevron in 1981 and became its U.S. travel manager four years later. Her role expanded to an international one in 1997, but the impetus to put together a truly multinational travel program came with the appointment of Helmut Porkert as chief procurement officer in 1999. Porkert, keen to see a global air deal, provided the board-level endorsement needed to win the cooperation of the corporation's numerous operating companies.

The first global air deals followed in 2000, but Godfrey thought she could do even better if she had improved data. Bringing data consolidator Prism and deal analysis specialist Travel Analytics on board helped, but Godfrey still reckoned she was being held back by Chevron employing more than 200 travel agencies around the world. With the corporation's employees traveling to 180 different countries, data was being lost.

Godfrey's first attempt to consolidate agencies was stymied by the merger with Texaco in 2001. She started again in early 2002 and this time was successful, but it took her 18 months. The selection process was slow for two reasons. The first was the detailed nature of the request for proposals template she put together with the help of consulting firm Management Alternatives. "I don't think the agencies had ever been asked to give that amount of detail before," she said. "They learned a lot about themselves because they had never seen the data lined up in that way."

The other reason was the great lengths to which Godfrey went in order to win regional buy-in. ChevronTexaco retains a decentralized structure, so it was crucial each region participate in the selection process and therefore take ownership of it. Godfrey tackled this challenge by conducting the bid in two stages: first at a regional and then at a global level. Regions were provided with the same template but allowed to augment it with additional questions. They also carried out their own interviews.

Three of the four regional teams chose Carlson Wagonlit from a list of six TMCs, the other five being American Express, Business Travel International, Navigant, Rosenbluth International (since bought by Amex) and TQ3 Travel Solutions (which since has aligned with Navigant). Nevertheless, Godfrey carried out a subsequent global validation to satisfy herself that Carlson Wagonlit would work well for the company on a worldwide level, as well as in the regions.

Even before getting to the global validation, Godfrey learned a great deal from the regional review in terms of what does and does not work internationally. One example was that although she wanted standardized reporting, this was not possible in Latin America, where all the bidding TMCs had difficulties with technology.

Godfrey also quickly realized that service expectations varied significantly. "The U.S. is accustomed to less and less, and Europe is moving that way, but Asia still expects a great deal of service, and relationships are very important there," she said. "Things don't get done without it. What we put in the 'nice to have' box they put in 'necessary.' I did anticipate a lot of differences, but not as many as turned out to be the case." Godfrey was able to come up with a standardized transaction fee definition but allowances did have to be made for on-site service in Asia and Latin America.

One early idea that had to be ditched was the negotiation a worldwide contract with a single global distribution system. Inquiries in the regions rapidly convinced her that no GDS could provide adequate content in every country.

Looking back, Godfrey can offer some perspective on what turned out to be the most important questions she asked in the RFP. The first was about the global reach of the bidders, especially whether their offices were owned or franchised. "If you are going to standardize, it is important the TMC has control over its branches," she said. "Carlson Wagonlit is doing a terrific job for us, but the offices where it has the most difficulty getting the message across are mainly joint ventures."

Next on the list was technology. With GDSs no longer providing universal reservations coverage, Godfrey was anxious to ensure the winner could integrate bookings from multiple sources, including not only the Internet but older technologies such as faxes, still frequently used in Asia. She was impressed with the Symphonie booking platform offered by Carlson Wagonlit and its Discovery reporting product. "The differences between the agents were in mid-office," she said. "Some were more advanced than others in their integration of online and offline."

Godfrey also made sure she followed up client references, as these sometimes revealed a gap between the sales pitches of the travel management companies and the realities of their operations.

Finally, there was the financial aspect of the exercise. Consolidation has cut ChevronTexaco's TMC bill by 40 percent, but Godfrey stresses this was not a top priority for her. "The agency only represents about 5 percent of our total T&E cost," she said.

ChevronTexaco finally selected Carlson Wagonlit in September 2003, then cut over 21 countries, representing 80 percent of its spend, in the first quarter of 2004. This first wave went smoothly, proceeding to a 30-page implementation timetable that planned details such as switching on online bookings and the hotel program.

Since then, the 80/20 rule truly has kicked in, with the remaining 20 percent of spend proving much more troublesome to consolidate. Nevertheless, Godfrey is convinced it is worth persisting to bring this last portion of travel expenditure into the program. "It is worth it for the information," she said. "It is easy to leverage where the high volume is anyway. We have always had some degree of negotiation there. It is the smaller countries that need our help the most."

Godfrey has found that it precisely is the smaller countries that have seen their data quality improve through the TMC consolidation. "We weren't delivering on our contract in South Africa—or at least we thought we weren't until we merged the data and found we were hitting our targets," she said.

She already was receiving good data from larger countries through the relationship with Prism, although standards are improving even in those markets. "We can maneuver quicker where we see a city pair," she said. "We are finally getting to the strategic piece where we are identifying opportunities and what we need to change." Godfrey added that ChevronTexaco is doing a lot more business in many hotels than her team previously thought.

As well as using the rapidly improving data for more supplier negotiations, Godfrey's next big project is to roll out online booking globally. ChevronTexaco uses GetThere in the United States for domestic bookings and has achieved 80 percent adoption. Godfrey has just launched the first phase of a bidding process likely to include Australia, Europe and possibly Asia, plus U.S. international bookings.

Also on her radar are consolidating meetings globally and figuring out the consequences of GDS deregulation.

Asked what tips she has for other buyers considering global TMC consolidation, Godfrey said: "Do the work up-front. Take time to understand your business around the world and how you will meet its needs. You also have to communicate what you are doing and why you are doing it. Explain what it will achieve for the company. It takes time, but it is time well-spent because people feel a part of the program."