Profiles In Travel Management: Bayer Team Tasks Two TMCs With Global Coverage

Bayer this year implemented a two-agency global travel management configuration following a 14-month sourcing initiative in which travel management and procurement teams standardized agency sourcing for the company's five regions and balanced technology, service and price measurements.

With BCD Travel in North America and some support and fulfillment services for an in-house agency in Germany, and Carlson Wagonlit Travel in EMEA, Asia/Pacific and South America, Bayer has implemented consistent service-level agreements, standardized transaction pricing and encompassed 80 percent of its global travel volume under the first phase of the rollout. The remaining 20 percent, which resides in smaller countries, will be incorporated in a second phase.

Bayer's 2007 travel volume includes $56 million in U.S. booked air volume and $169.16 million in U.S. T&E expenditure. The TMC sourcing team had five procurement representatives, including two from the central procurement organization in Bayer's Germany home office, six travel management representatives and an auditor. The team reported to a steering committee comprised of the global heads of procurement for Bayer's four lines of business.

Bayer's travel management and procurement structures differ across regions. For example, U.S. travel management reports through procurement, while the German travel team is separate from central procurement.

Melding procurement and travel management philosophies, the project team used a weighted equation to measure the four finalist TMCs. Service and technology accounted for 40 percent each and pricing was 20 percent. "The travel management folks really wanted to make sure that procurement got the message and they did," said Paul Lang, Bayer corporate and business services manager of travel services. "Even though this is a procurement effort and we're sourcing, the service and technology components are more important in the selection of the supplier than the pricing."

The team adopted a call center site visit matrix and developed a 73-field number rating system to quantify the service and technology components of the equation. Pricing bids were given regionally based on a standard definition of transactions developed by Bayer, so "there was really no misunderstanding on the supplier side," Lang said.

At least two representatives from the Bayer project team were present on call center visits. Call center locations were chosen by each agency.

Each region's procurement and travel management representatives made individual recommendations to the steering committee for approval. Bayer's analysis also focused on whether the TMC in each country was wholly owned, a joint venture or an affiliate. In the case of franchised operations, Lang said, "We know from experience that sometimes there is conflict between the owner of the franchise and the company. There is not much continuity and standardization when you have too many franchises. That was a big concern in a couple of countries in South America and Europe."

Regional service-level agreements were applied to the agency contracts, including the five-year deal with incumbent BCD Travel. Some key performance indicators attached to the SLAs are data formatting and consolidation and timeliness of reports. Country-specific SLAs can be added to contracts if deemed applicable by local Bayer leadership, according to Lang, who added, "We have encouraged them to not get carried away with too many metrics."