Business Travel News last week named Janan Johnson, GlaxoSmithKline's director of procurement for corporate services, as the 2005 International Travel Manager of the Year at the Association of Corporate Travel Executives conference in London.
Many of Johnson's efforts culminated this past July. The team she led completed airline contracts with two alliances, Star and Oneworld, reducing the number of its airline contracts from 65 to 16, and implemented agreements with hotel chains Starwood, Marriott, Hilton, Shangri-La, Hyatt and InterContinental in 49 countries, for the first time leveraging meetings in its transient hotel negotiations. At the same time, Johnson got the internal go-ahead to pioneer a new procurement platform provided by Rearden Commerce
(BTN, Oct. 17) and began pushing them to synch profiles and calendars to Lotus Notes and put a higher priority on enabling the solution to work on both sides of the Atlantic. Having achieved a return on investment for the program of 17 to 1 over the past three years in terms of money spent for staff against the savings returned, Johnson gained broader procurement responsibility, so in July she also put in place a new global travel manager, Louise Harding.
Johnson and the GSK team in January 2004 put together the strategic plan that led to those accomplishments. With the previous implementation of a global travel program encompassing more than 40 countries consolidated with BTI for the U.K.-headquartered pharmaceutical giant
(BTN, July 21, 2003), Johnson led the formulation of a vision that included outsourcing all operational functions to her agency, freeing her and the GSK team members to play a more strategic role in the program and to experiment with new models.
"As a team," Johnson said, "we are still heavily connected strategically. There are no decisions made independently, because GSK brings to the table the culture of the company and BTI brings to the table expert knowledge in the industry, and together we have to come up with one solution. Once we get to that decision, it becomes entirely outsourced to them."
Susan Lancaster, Johnson's counterpart at BTI, who also recently received more responsibility as a result of GSK program successes, said Johnson displayed "breakthrough thinking and innovative contract management that ensures GSK is reaping the benefits and the value of following this outsourcing model, not only in year one or two, but in yielding continuous improvement."
Lancaster, now director of BTI's international business group, with responsibility for the agency's eight largest global accounts, said, "Janan's biggest achievement, as the leader and shaper of the strategy with the whole team, is that she has very much touched every part of the program in that strategy, rather than just focusing on, as some customers have done, operational areas, such as online booking tools, or on airlines. She's not just given it up and asked someone else to do it. She owns the strategy, and is the driver, the creator and designer."
While the program's successes are varied, it is the scope, the magnitude and the complexity that set it apart. "It is the completeness of it and its consistent deliverables, which is quite unique," Lancaster said. "Often, you can pick out certain elements of a travel program that have been particularly successful. The uniqueness of what Janan has done in her program is the totality of it."
Johnson said GSK prepared BTI to take over the operational side of the program by educating its account team on its sourcing group management process. "They went through the same training that all of our SGMs went through," she said. "They took on board how we do business. That's where we find the advantage. It's like they are in my office on my payroll, but they're not."
Part of that training focused on GSK's Epass online buying software system. The system is used to do an RFI, and then a reverse auction in some cities and sealed bids in others. "We use Epass for everything from hotels to office furniture," Johnson said, "and we use that product around the world. We've been using the Epass product for five years for hotel and our use of it has quadrupled in that time. We hardly ever do a paper bid any longer."
Lancaster said GSK's approach "has delivered year-on-year incremental savings at a time when the hotel industry not only has been able to negotiate rates, but to achieve them, yet we have been able to continually drive those rates down through good effective supplier management."
GSK's hard-core procurement approach also incorporates Six Sigma processes. While Lancaster said other customers use Six Sigma, "they tend to do it in what I call isolation. Janan has used procurement processes all the way through the program, using the procurement tool and applying Six Sigma not only operationally, but also on the service side. We also are applying Six Sigma to the relationship with one of the global airlines, which I haven't seen any other company do. Good results are opening some very good opportunities to achieve efficiencies for the airline, agency and GSK alike. It requires a degree of openness and trust and partnership to be able to do that."
Johnson said GSK also sourced airlines through the Epass tool, even though they were "very opposed to the online bidding process." To get around legal issues, GSK sent a template of charts to potential bidders to discuss with their alliance partners and legal departments, "so that we could have a standard set of charts at the meeting," she said.
"We are now managing those airlines very differently than I have seen them managed before," Lancaster said. "Usually, once buyers put an alliance contract together, they are not managing that alliance from a supplier point of view, they are managing each of the airlines separately under an umbrella contract. What we've done is put together a global contract with Star Alliance that has every single one of their carriers. We are managing them as a global alliance inasmuch as we are not reviewing each airline, we review with the alliance point person, who has to be empowered to ensure they deliver to those contracts."
Johnson said "maximizing the outsourcing model allowed us to create a resource, time, to continue on another pursuit, an end-to-end strategy for travel which then grew into seeking an employee business services tool, which led to the Rearden product. If I were still running the entire program, we wouldn't have this opportunity."
Johnson plans to have the product in the hands of pilot participants by Dec. 1, "but the final tweakings of making it GSK-ized will not be done until the second week in January, and then it will run for 90 days," Johnson said. "We're aiming for 250 people in the United States. We're in the implementation phase of the pilot right now. We demonstrated the financial return on investment, which is the number-one criterion. Secondary is the functionality from the IT community—systems integration, communication, training, figuring out who is going to be in the pilot group, driving customer and business unit buy-in, defining what it's going to look like and defining the key performance indicators that will demonstrate the success of the pilot."
Travel KPIs will focus on maintaining or improving on the performance of the company's current ResX online booking product, particularly regarding savings, ease of use, increasing adoption, and faster and better pricing. In addition to air, hotel and car rental booking, the pilot will include package shipping, dining and ground transportation.
"One of the key deliverables for Rearden is that the functionality of the United States has to be the same in the United Kingdom," Johnson said. "The lack of such functionality has been a shortcoming of other online booking systems, so far. We're OK in our key markets, but we're trying to get to another level."
Rearden is working to secure access to the Galileo global distribution system by year-end. "We drove that up to the top of their priority list," she said, noting that Rearden already is on Sabre and Apollo. "If everything goes well, including the Galileo piece, I would say opening it up to a larger population could happen easily by the second quarter of next year."
Lancaster said Johnson is "very good at delivering to her customer base. They really feel the value she brings," she said. "As a result, they are responsive to her ideas. In a diverse company such as GSK, across 50 countries, it's a huge task. Her skill is in identifying her customer needs quickly and being able to translate them into the right service, understanding what the suppliers' capabilities are at the right price and then being able to apply that knowledge to compel the suppliers to grow to deliver to those needs."