Profiles In Travel Management: Syngenta Scraps TMC Consolidation - 2006-05-15

Company: Syngenta
Global headquarters: Basel, Switzerland
2005 Global air spend: $50 million

Agri-business Syngenta has abandoned its original strategy of consolidating with a single travel management company worldwide in favor of letting approximately 90 countries make their own TMC selection. As a result, it believes it is obtaining better service and a better price in each country as it complies with a corporate culture of decentralization.

However, countries do not have a completely free choice. Whichever TMC they select must be able to deliver management information in a specified format to Business Travel International. BTI handles travel for Syngenta in the United States, Switzerland and the United Kingdom—those three accounting for 75 percent of its travel—plus another 15 countries. Head of global travel management Peter Brodbeck said the consolidated data he receives through this arrangement is just as accurate as if one TMC handled all of Syngenta's travel worldwide.

Syngenta was founded in November 2000 following the merger of the agro-chemical divisions of Swiss company Novartis and Zeneca of the United Kingdom. It employs 19,000 people in 90 countries. By coincidence, both Novartis and Zeneca employed BTI as their principal TMC. Syngenta originally resolved to consolidate all its travel spend through BTI but soon encountered internal resistance. "We are not led by our global headquarters," said Brodbeck. "Each country has its own organization and legal entity. We couldn't force them to use BTI.

"We started with larger countries, such as France, Brazil and Hong Kong, which was our headquarters for Asia/Pacific. We struggled. The countries said they had good relationships with local agencies and asked where the value was for them in switching to BTI. In some countries, it was not the best choice for price or service."

The resistance led Brodbeck's team to reconsider global TMC consolidation. "We asked ourselves if it would be worth enforcing TMC consolidation through our executive committee and having unhappy countries," he said. "Instead, we told the countries they were free to choose but the TMC must be able to deliver data in a consistent format and sign our service-level agreement."

Brodbeck's team also told the larger countries that they must go through a formal request-for-proposal process. Meanwhile, Syngenta committed to continue using BTI in the United States, Switzerland and the United Kingdom.

BTI, which continues to serve existing clients despite its owners splitting to start new global TMCs HRG and BCD Travel, consolidates Syngenta's management information through its Gems data reporting product. Syngenta's other TMCs send their data to BTI monthly for integration into Gems.

Brodbeck said problems with data submitted by other TMCs are rare. TMCs are asked very specifically before selection whether they can deliver data in the required format, and even smaller independent agencies, such as one in Hungary, have managed to comply. Brodbeck is convinced of the accuracy of the data because he checks it against management information from Syngenta's corporate payment card.

Following the global service-level agreement has not caused problems either. Brodbeck said such requirements as opening hours vary by market, so he has included only conditions that can apply universally—for instance, that workers on the Syngenta account must have at least two years' experience in business travel.

Apart from keeping Syngenta's national businesses happy, Brodbeck believes it is not necessarily cheaper to use the same TMC everywhere. "TMCs always say they will give us better conditions if we consolidate with them," he said. "I have never experienced that. You often get a better deal if there is competition locally.

Syngenta also has the flexibility to change an unsatisfactory provider in one market without having to make changes in all the others. It has just done this in Brazil, switching from Carlson Wagonlit Travel to a local TMC.

However, Brodbeck said there is one disadvantage with using multiple TMCs: Supplier management requires more work. "The only downside is that there is more administration required when we implement a new air deal," he said. "We can't go to our BTI representative and ask them to do it. Fortunately, Syngenta has five regional travel managers who do the work instead."

With BTI no longer in existence other than to serve out its contracts with clients, Syngenta will change its TMC arrangements within three years. However, it likely will continue its decentralized process. "It is a different approach from U.S. companies," said Brodbeck, "which generally drive everything from the center."