Profiles In Travel Management: South African Gold Firm Mines Travel Management
Company: AngloGold Ashanti Ltd.
Headquarters: Johannesburg, South Africa
Annual Air Volume: $45 million
South African gold miner AngloGold Ashanti has built a global travel policy with regional flexibility, implemented a corporate T&E card program while balancing the cash culture in some markets to which it travels, and has adopted procurement practices into its in-house travel management and sourcing efforts.
As the Johannesburg-based company expands its operations, now in 10 countries including Australia, Argentina, China, Colombia and the United States with 61,000 employees, the company is consolidating its global travel volume, including its $45 million in air spending, for negotiating leverage. In the company's home market, it has garnered a 20 percent to 30 percent discount on published airfares, according to AngloGold global travel manager Basil Chamra.
"We still strongly believe that this business is about relationships," said Chamra. "If you have better relationships with suppliers, our TMC doesn't necessarily have to get too much involved with all the negotiations."
Another reason AngloGold handles its own supplier negotiations is to protect the company's data, as some travel management companies in Africa allow clients to piggyback on other corporations' negotiated rates, Chamra said. "We are just trying to basically protect AngloGold Ashanti," he said.
Travel management is separate from AngloGold's purchasing departments, but Chamra applies procurement practices to vendor negotiations, especially with American Express Business Travel, its travel management company. The TMC relationship operates on a management fee model tied to service-level agreements that carry financial incentives and penalties. Performance is weighted by key indicators including cost savings—which is given the most weight—travel policy compliance, timeliness and accuracy of payment and reporting.
The company has developed a centralized global travel policy that allows for regional flexibility in coordination with AngloGold regional travel managers, supported by Amex onsite travel agents at local offices and mining locations.
The onsite configuration is not going anywhere any time soon as the company has yet to deploy an online booking tool because outside of the company's Johannesburg headquarters, high-speed Internet is expensive and not readily available. In addition, many of the company's trips are multi-segment bookings, and the bulk of travel still is in Africa, where a considerable amount of content is outside of global distribution systems, credit card acceptance and bank settlement plans are limited and safety and security concerns inhibit travel, said Chamra.
All of the company's bookings are made through its Diners Club lodge card account. Employees who travel abroad more than five times annually are issued Visa T&E cards, but the company has limited the number of cards to about 500 to avoid paying the annual card management fees. According to Chamra, cash is issued to frequent corporate travelers and those employees who travel to locations with little credit card acceptance.
"We actually don't think it makes any business sense to issue a credit card to everyone that travels," Chamra said.
Through the executive-sponsored global travel policy and communication strategies, such as onsite education workshops, seminars and messages via the corporate intranet that convey savings and policy changes, travel policy awareness and compliance are on the rise. One example is the automation and standardization of expense reporting, which until recently had been manual, paper-based and fulfilled by a team of back-office processors.