Doug Weeks
Booz & Company global sourcing director Doug Weeks last month wrote a guest column for The Beatin which he argued that global travel buyers should select the best travel management company they can in different regions, as opposed to trying to consolidate to a single TMC globally. The piece received mixed response, including a supportive letter by consultant John Melchior and a critique by Carlson Wagonlit Travel. Weeks spoke with The Transnationallast week to elaborate.
What are your thoughts on a national approach to selecting travel management companies, wherein the company chooses the right fit in each country?
I haven't really thought about a national approach. Booz is in 33 countries, and I don't think we want 33 TMC relationships to manage. That can lead to a whole other set of questions and concerns. But one of the principles of doing it regionally is you create some competitiveness by not having one TMC. They've all got to perform to some level of standard, and you're in a better position with leverage with all of them. You don't need 33 agencies to gain that leverage. Our key regions are North America, Latin America and EMEA. We probably need one, or there could be two, in each region, but I just don't come from the philosophy that having one across the regions is necessarily the best choice. I guess I could see that would make sense if you're like a super-large global buyer--you know, the mega large, the IBMs of the world--where you could have one agency, one program and the same global distribution system in a follow-the-sun scenario. But when we had one TMC across the regions--it was the same agency in North America and in Europe--they didn't necessarily talk to each other, so when our CFO from New Jersey was on travel in Europe, he couldn't call the UK res center we used and have them service his reservation, because they were on a different GDS, etc. So how global is it when they don't have continuity across borders like that?
Travel and Transport, which you use in the United States, is a big part of the Radius group. Would using the Radius network fit in with your thinking?
We use T&T, and we have Amex in Europe. We're in two Latin American countries--Brazil and Argentina--and they don't use the same agencies. They're pretty small operations for us down there, and they're culturally different with different languages. And we have Amex in Australia, which is our biggest location in that region, and then we have some start-up practices in China and India and we're going through a review about what we need to do in those countries as well. I wouldn't necessarily select a regional Radius player in Australia just because they're in the same network as T&T. They'd have to be best in market. A Radius type of network probably carries the same challenges that it would with a mega to some degree ... standardization of data, consistent service levels, etc. Yes, they're part of one network, but they operate independently. Certainly it gives us an option, and I would want to leverage our relationship with T&T to go out and look at a Radius partner, but if they're not best in market it's not an easy choice. I don't think we would necessarily pick them just for being part of the same network. But we would look at it.
You wrote in your column about "having multiple agencies" driving their "competitive natures." In what way would agencies serving different regions be competing?
Not necessarily directly, but if Amex in Europe is performing to a set of standard metrics and goals there, and we're failing to hit it here in North America with T&T, we can put some pressure on T&T, or vice versa. If any of them had some material breach or failed to perform or something catastrophic [happened] and the service went downhill, it's a lot easier to flip agencies [in one region] since you already have a relationship with [another in another region]. Where it really gets competitive is where you have more than one agency in the same region. I'm not advocating that. All we want is a great, or best-in-class or superior service for our travelers that will save money, increase their productivity and better our bottom line. I don't think that necessarily means you have to have one TMC. I don't think it's been proven that one TMC across regions gives me increased productivity or better service to our travelers--again, outside the big, big ones because of their scale.
You have talked about cross-border data consolidation and using a third party. We continue to hear complaints that global data consolidation isn't effective enough. Do you disagree?
Because of different formats and fields coming across borders even within a single agency, there have always been challenges with data consolidation. However, I think a third party whose core focus is on data reporting and cleansing will get you in a much better position. This is kind of opposite of what [American Express Business Travel exec] Charles Petruccelli said recently: Outsource everything to Amex. Amex is a great TMC, but I don't know that data collection and reporting is their core competency. I'd rather outsource a function to a firm like TRX for which it is a competency and a primary goal.
You probably saw that CWT disagreed with your position. CWT argued that as a global TMC, they offer "more timely and consistent data and reporting." Now, a big TMC might even use TRX or another company like it, but are there benefits to you of using that third party directly?
One of the big benefits is that if I have the different agencies in different regions queue data to a third party, now I have my hands on it. Even though technically we [corporates] own the data anyway, I now have more control and power in the TMC relationship. Is it perfect? Probably not, but it's not perfect having one agency control your data--and many times they charge for it anyway. On the mega agencies, they give you data in standardized reports and it's kind of, "This is what we have." But in the regional model, there's more flexibility. I give quarterly data to our North America management team, and they look for key stats on their business units. We have really worked hard with T&T to develop customized reporting by charge number type, or by office, broken down by whether they used a billable charge number, a marketing charge number, a general and administrative charge number ... and [I want to know] on those billable charge numbers, what percentage of those tickets were bought in certain fare classes or nonrefundables, etc., and I want the reports delivered to me that way. They do that. My experience with megas is, "Here's the data; pull what you want." You can get stuck in their systems for hours trying to figure out what you want. I don't have time or patience for that.