Profiles In Travel Management: Reorg Spurs Travel Mgmt.

Company: Bayer
U.S. Booked Air: $48 million
Global Air Volume: $107 million
Global Travel Spend: $165 million

Following a major corporate reorganization, manager of travel services Paul Lang and the Bayer travel team are focused on driving online booking, completing a major U.S. policy overhaul, exploring interregional opportunities in a globally unconsolidated agency environment, and assessing the impact of meetings on the company's travel spend.

In January 2005, Bayer completed a worldwide corporate reorganization, splitting what previously had been a single operating corporation into three operating companies and one service company. Today, travel reports into the procurement organization of Bayer's service division.

With 21 years of experience at Bayer under his belt—11 in travel management—and an extensive background in procurement and information technology, Lang said he has not confronted many of the issues associated with balancing the often subjective nature of travel with the more objective goals and techniques of corporate purchasing.

"The nice thing for me is that I have a certified purchasing manager on the team. I know from other colleagues that, when they report into procurement, they sometimes have some challenges in that area because of the mentality that procurement is buying widgets. Certainly, travel is not buying widgets," according to Lang. "The beauty for me is that I don't have that challenge or that issue. With this new reorganization, we now have a much closer working relationship with key contacts from the operating companies."

Though many global companies have realized cost-savings opportunities through global agency consolidation, Lang said that a less centralized model, consolidated in the United States with WorldTravel BTI, better serves the needs of Bayer's 10,000 travelers. "You find that with any agency, no matter how good they are in your area, they may not be as strong in another part of the globe. There are very limited, if any, opportunities from a true global perspective. We look at things more on an interregional basis," he said, adding that the company in the past year brought Canada and Brazil under Bayer's U.S. agency agreement. "It wasn't an RFP, but we basically went back to WorldTravel and their BTI partners and leveraged the other spends together with the United States and we all got better commercial arrangements out of it."

The company is working to realize additional opportunities between North America, South America and Europe, and to bring a fledgling Asian business travel market into its mix.

Bayer's travel policy, though regionally specific, does maintain some language consistent across operating countries. "We have a few components that would be considered global from a travel policy perspective. As an example, our first class restrictions are basically a global directive. We get that from headquarters in Germany and work with the agency to make sure they know who is permitted to book and pay for first class in the United States," said Lang, noting that the company is going through a detailed review of its U.S. travel policy and anticipates completing the process by month's end.

"The U.S. policy is mandated in certain regards and we're having some serious discussions over single words like 'must' versus 'should' versus 'expected to,' "Lang said. While some aspects of current policy may read like mandates, directing Bayer travelers to use the designated agency, penalties only are enforced for noncompliant use of the corporate card. "We're definitely going through it word by word," he said. "We're stressing more in the new revision, and this hasn't been approved yet, that one of the key areas is supporting or using the online booking tool. The previous policy didn't even mention it. Now we're saying, 'You either have to use the designated agency or the online booking tool.' "

With online adoption at 40 percent of all bookings and no specific language indicating the conditions of online booking tool use, said Lang, the company's goal is to reach 75 percent adoption under the revised policy in the coming years.

"On the international side, we're not expecting people to do it so much, but that's only 10 percent of the tickets. Out of the remaining 90 percent, we're basically saying anything that's four segments or less on the air should be booked through ResX. At about 75 percent, we're going to be maxing out," Lang said. "We don't really have a timeframe on this. We just keep revisiting it with senior management and the various operating companies."

The Bayer travel team also has made assessing the impact of internal meetings on the company's travel spend a priority. In 2003, according to Lang, "I went to the travel agency and said, 'What I want you to do is make it so that you can't get through the reservation unless you put in a purpose of trip.' "

A drop-down menu in the tool or an assisting agent now offers travelers a handful of options, including customer meetings, internal meetings, supplier meetings, and conventions. "The whole purpose was for me to gather the information to see how many internal trips we make. My feeling was that it was a pretty high number and I wondered if management has any idea how much they spend on internal meetings."

Having captured that information for the past two years, Lang estimates that, on average, 25 percent of all trips made every year are for internal meetings and equates that figure to an aggregate of $2 million in cost reductions annually.

"I've just started taking that information back to senior management and the reaction has been what I hoped it would be. They're kind of surprised that we take so many internal trips and that the spend is so high," said Lang. "In order to accomplish those cost reductions, we need the same senior managers to support it."