Tom Barrett
With its WorldTravel BTI contract set to expire at the end of this year, American Standard Companies was well-situated to evaluate the two separate travel management companies that emergedfrom that entity at the beginning of 2006. By this summer, it had selected BCD Travelfor a global program covering nearly 40 countries. The Transnationalrecently spoke with Tom Barrett, American Standard global strategic sourcing director, about evaluating and implementing the new global agency contract. An excerpt follows.
Can you summarize the bid process, picking up in January when you realized that your incumbent service provider, WorldTravel BTI, would be splitting into two independent TMCs?
I went back to the respective entities that came out of this, both BCD Travel and Hogg Robinson Group, and set forth a criteria that said, "Tell us what your strategic vision is going forward and how you would manage our accounts in the new environment." There was an agreement that if we wanted to stay in the merged world with the two entities, they had a relationship that would have allowed American Standard to do that, as well. We then looked at their responses and took a gradual approach. We knew we could keep it together, or manage the level of change within the two entities. So, if we had gone with either Hogg Robinson or BCD, we'd know the managed level of disruption in the new environment, the financials, the benefit to the organization, the reasonable technology alternatives available to us and the service configurations, especially in markets where we had not consolidated.
Were the other largest TMCs--American Express, Carlson Wagonlit Travel, etc.--part of the bid process?
They were part of the process. You have to manage the level of disruption that you would have with a wholesale change for the entire 40-country mix. When most people consider a wholesale change of the agency, there generally is a point you have reached where the programmatic elements may be so tainted and there is a level of service disruption that in fact warrants a change to the logo over the door. That was clearly not the case. We had what we considered a well-managed program that had made significant progress over the last four to four-and-a-half years. If we had not come to a solution, other players in the marketplace were prepared to move very quickly.
What differentiation did you see between BCD and HRG that led to the decision to go with BCD?
We evaluated the resources of the competitor opportunities in the marketplace. We think that HRG, with David [Radcliffe's] leadership will be a major player and a major force in the business, but where they are today and where American Standard needs to make its decision, we felt the resources--especially with our European headquarters in Brussels, and our largest entity here in the United States, and their presence currently in the U.S.--could have certainly allowed them to have operations, but would they be effective to the business for a long-term strategy when we had to make our decision? We are looking at a wholesale change in going into the Mechelen (Belgium) call center in Europe. That gives us a significant opportunity to streamline services with their presence at this point. The leadership of BCD continues--with Ernest [Guerra, director of global travel and meeting services], myself and Pascal [Struyve, EMEA and Asia-Pacific travel and fleet manager] leading the way for American Standard Companies--to be responsive to our consistent requirements. The people in Europe, with the BTI leg of the stool, also have been responsive. Our contract calls for strategy sessions for evaluating continuous improvement. At the time of re-contracting with BCD, it gives us time to calibrate our program. If I can't state the value proposition to our businesses, then quite frankly, you get into issues of not being responsive to customer requirements, customer service inquiries, etc. A program has a tendency to erode the effectiveness, so I think the re-contracting process, and continuous strategy sessions--we evaluate our hotel program, our airline deals and high-level movements of our global scorecards--allow us to understand the trends.
Can you discuss any change management processes needed and plans for technology implementation?
Understand that we will be utilizing some of the HRG partners in our European centers for a period of time because we cannot transition all of those opportunities and we were farther along with some strategies that cannot be stopped at this point. That said, there are many things that will happen as we move forward. For the U.S. piece, which is our largest, we had already deployed some technologies with Cliqbook and 65 percent of our business is unchanging in North America. When you consider some of the implications of technology alternatives for us going to a call center for our major European centers, we are anticipating introducing some self-booking tools in markets where it may not have been financially viable for us as a player-to-be. Those technologies will be phased in, as well as expense reporting systems. It should be Gelco on the expense side, but I am uncertain about the selection of a booking tool in Europe, since we are busy with the transition. It is too much change to manage all at once, and you could collapse the program with its complexity: "Here is your new 800 number, here is your new expense reporting system and, oh, by the way, you will be using a new self-booking tool." Some of these things will be phased in appropriately. Some organizations may be able to handle all that at once, but when you consider the number of countries in our program and the population base we have ... the culture of our company will require a bit of a broader brush to get everyone on the same page.
A global TMC relationship generally is seen as the foundation for a global travel program. Though American Standard had previously developed transnational air and hotel deals, are you now positioned to go back and further enhance those elements?
Our global hotel program continues to be refined, communicated and effectively managed. The real challenge for us is to evaluate the emerging airlines in Europe--whether they be Ryanair, EasyJet or some of the others--and understand those dynamics. They have a tendency to impact our program and deliver a value proposition that is different than the legacy commercial carriers. And our largest challenge, one that we are now getting into, is our emergence in China and stabilizing our Asian markets. They probably have not received as much attention as they should have. This new structure will support that. Asian markets would be part of a phase-two implementation. After we get Europe fully transitioned, we will be evaluating our strategies in those markets.