Peter Sijbers
As the global commodity manager for Phillips General Purchasing in the Netherlands, Peter Sijbers is charged with developing and executing travel management strategy. He is preparing for Royal Philips Electronics' planned divestiture of its semiconductor business (to new, independent company NXP), a transaction that would shave roughly 20 percent off the company's global travel volume by mid-2007. Sijbers also is working to further develop Philips' global SkyTeam arrangement and looking ahead to the 2007 expiration of the company's global travel management company contracts. The travel management veteran and Association of Corporate Travel Executives board member discussed these and other topics this week with The Transnational. An edited excerpt follows:
How are multinational companies impacted by changes to travel distribution in the United States, preceding potential global distribution system deregulation in Europe?
It has an impact on rebates and rebate structures for us travel managers, and also has an impact on arrangements with TMCs. The whole discussion on opt-in programs, and possibly not having access to the all the inventory of an airline, is really a concern. If I have a contracted supplier that is only willing to share part of its shop with me, I really do not feel tied to market share goals [and other negotiated terms]. From the airlines we work with, I expect full access and expect them to work with us to compensate for any negative financial impact, either via the agency or via higher ticket prices. It is a cost implication that ultimately will be passed on to the end user, the corporation. This is a learning curve for whatever will happen in Europe because most global GDS agreements have not been renegotiated yet. But that definitely will come and have an impact on how the European Union wants to proceed. I do not think [EU regulators] will allow complete deregulation. They cannot. Maybe there will be a phased approach, but there will be rules around that. Otherwise, it will be complete chaos over here. There are some other implications related to all this. For only a few corporations was a GDS relationship a viable option, but more corporations might look into this, at least to assure access to full inventory on a global basis. And the whole discussion on [ARC-accredited Corporate Travel Department designations] will start all over again, as well. There are some key elements that corporations do not control. One is the GDS and one is the International Air Transport Association or ARC license. I am not saying that is an option for everybody, but it is difficult to fully manage and control a program when you do not have any direct influence on the key components. What recently transpired in the United States will make people think about how to secure certain things in the future.
To what degree has Philips consolidated global travel agency operations, and how has the shuffling among the mega TMCsimpacted your program?
We predominantly work with three agencies on a global basis. Carlson Wagonlit Travel covers approximately 70 percent, BCD Travel covers 15 percent and American Express covers 15 percent. Key countries are covered by Carlson, American Express covers Asia and BCD covers a few German-speaking countries. In that sense, we did consolidate, but we did not end up with one agency. Our contracts expire at the end of 2007. Normally, I would say you need about nine months for your selection process. The status now, and the need to start early next year, is a real concern for me because the dust definitely has not settled. There is more consolidation on its way, with regard to TMCs.
How far along is Philips in using CWT's Symphonie platform and Horizon online booking tool?
We use those tools in the United States. The whole discussion on that was revamped by the GDS discussion. Because of our adoption in the U.S., which is significant, we need to secure access to inventory. Carlson, with the Horizon tool, is working with G2 SwitchWorks and direct links [to suppliers]. Carlson has told us that by the fall of this year, everything will be in place and we will not be dependent on a GDS. In Europe, we use the Traveldoo booking tool in the United Kingdom, France, the Netherlands, Belgium and Austria. In most countries, we did a relaunch after switching from GetThere. We did a mandate program and adoption is really high. If you take point-to-point bookings in the Netherlands as a reference, our adoption is 90 percent.
How has the global contract with the SkyTeam airline alliance developed since Philips signed the deal last year?
It is moving in the right direction. The agreement is doing well. It is important that results are measurable. We use [The Prism Group] to manage our contracts and measure the savings. It was a huge undertaking to put that 33-country SkyTeam contract with seven carriers and thousands of contract terms into one database that is able to track and calculate savings. It has taken quite a while to figure out how to make it more efficient, cluster the terms, etc. But it is there and I am able to report savings. [Guaranteed availability of fares] is another area of concern. And we really want to differentiate our program for all the SkyTeam carriers and all the countries involved. If you start looking at how to link the individual Philips traveler to the global program (as far as recognition and other customer service benefits), it is extremely difficult. I needed these things to kick in immediately, so we did it with traditional airline perks programs, status matching, etc., as a phase one, but we are still discussing how we can do that differently, either through a co-branded card, baggage tags, or whatever. The difficulty is that all those airline IT systems operate on their own and do not necessarily interface and transmit to each other. That is the real issue. The more basic solutions have proven to be the most effective, although perks programs are a double-edge sword--both parties agree on that.
We understand Philips is among the top companies on the Dow Jones Sustainability Index. How is travel management involved in sustainability initiatives and other corporate social responsibility efforts?
It is definitely a concern, and definitely included in the supplier selection. We do ask suppliers to sign a sustainability clause. And we ask suppliers to share documentation on their efforts to prove they are sustainable partners. That is the justification of not being a low-cost supplier. We really want to work with sustainable business partner and, to some extent, no-frills carriers maybe are, but not the full extent. So we are very cautious on that ... Prove to me you are conscious about the environment, that you work with Airbus to reduce fuel consumption, etc. Some of the airlines are doing that but are reluctant to share some of the information. At Philips, we are striving to measure and put specific key performance indicators in place ... we travel x miles on an annual basis, use that for environmental calculations, etc. It has not come to the stage that we have taken that as input for our policy but I am pretty sure that around November or December we will have discussions on that. We are involving ourselves, as the travel department, more in other areas within the company: risk management, security, insurance and liability. To get beyond the stage of procurement and bottom-line savings year-over-year, we are definitely moving in the right direction. In the end, travel is a cost that you must control and manage, but travel also is an enabler for the core business and cost is only one element. Travel managers and travel departments play a key role when they are willing to take on the challenge. It opens more doors to influence policy and next year's budgeting and to be more in the forefront.