Profiles In Travel Management: MMC Agency Consolidation Leads To Consultative Role
Company: Marsh & McLennan
Headquarters: New York
2007 Companywide T&E Volume: $379 million
Marsh & McLennan this fall implemented a massive travel management company consolidation by reducing its TMC supplier base from 41 agencies to a single provider in little more than a year. After a late September implementation, BCD Travel handles nearly all the New York-based professional services firm's reservations in the United States, Canada and the United Kingdom, representing 80 percent of its $379 million global travel volume. MMC expects to add Europe by the end of the first quarter of 2009.
The major agency overhaul led global corporate travel lead Judy Bauer and the MMC travel team to transform to a more consultative internal role, instead of strictly sourcing and managing processes.
The company later this year will commence a "client engagement" initiative in which the travel team tailors travel budgets, savings goals, policies and reporting packages for each operating company so they are "not lost in this whole process and they can see the direct impact to their own operating company by changing behaviors, policy or driving demand management," Bauer said. "You get much further, more compliance and better results if you are consultative and use that subject matter expertise." In 2008, she said, T&E volume is down more than 15 percent, with some operating units growing and others decreasing expenditures.
While the mammoth program consolidation played out relatively quickly, MMC's unique organizational structure made the initiative all the more daunting. MMC is made up of five operating companies plus a corporate unit, each with responsibility for their own travel management, in addition to different business models, industry sectors, management structures and corporate cultures. That led to disjointed travel management structures and supplier contract redundancy, including numerous separate contracts with American Express Business Travel.
The MMC travel program in August 2007 began a TMC sourcing initiative, with the request-for-proposals process ending in December 2007, followed by four months of negotiations with the four mega travel management companies —all of which already had a piece of MMC's business. Bauer, who came to MMC from JPMorgan Chase's travel management team in July 2007, sought out several key stakeholders within each operating company to start building relationships early and formed a travel committee with C-level and other senior executives.
The financial components of the travel management companies' offers were important, but Bauer said service, technology portfolios and the ways the TMCs would meet MMC's requirements were the main differentiators in the sourcing evaluation.
Senior management approved the travel committee's travel management company recommendation in June, and Bauer and her team of two travel managers and a sourcing specialist then carved out the implementation plan during the next several months.
MMC now applies a procurement-based contract measurement system with service-level agreements, key performance indicator metrics and a "customer resolution process."
BCD's Cleveland call center handles MMC's U.S. reservations, including VIP services, which shifted from onsite locations at MMC's main offices. Some U.K. onsite services remain. Canada's reservations are now consolidated to a local call center.
MMC also implemented a customized BCD travel portal with reporting capabilities and a consolidated portfolio of online booking tools. GetThere now is MMC's preferred U.S. self-booking tool, replacing Carlson Wagonlit Travel's Horizon, Cliqbook and Egencia. Canada is on Cliqbook and the United Kingdom remains with KDS.