Lockheed Martin last year negotiated its first corporate-approved restaurant program across several cities in the United States, an initiative led by the defense contractor's travel department. That company, however, is firmly in the minority when it comes to travel buyer involvement in negotiating deals and managing spend with restaurants, as fewer than one-third of the 294 respondents to Procurement.travel's survey reported a hand in such programs--one of the lowest levels of travel buyer participation across more than two dozen spend categories examined.
Other categories, from corporate housing and corporate auto fleet to private jets, similarly remain on the periphery of the buyer's portfolio, with fewer than half of respondents involved in each of those categories. But some reported a general expansion of duties falling under their domain.
"Companies are doing more with less and giving people already in the organization more responsibilities, so you see more consolidation of these types of administrative functions in the midst of these economic situations," said director of strategic development at management consulting firm Acquis Consulting Group Greeley Koch.
Once treated as tangential to travel management at many companies, risk management is one category increasingly in the buyer's purview. Seventy-three percent of respondents reported some level of involvement in managing such services for their companies. Of those who reported no involvement, 10 percent expected to become involved in risk management.
Management Alternatives president Carol Salcito said travel buyers have played a growing role in risk management during the past decade, as traveler tracking technology has evolved, duty of care discussions have swirled in corporate boardrooms and world events--from 9/11 to the more recent European ash cloud--have highlighted the importance of safety and security. "More buyers are taking on risk management responsibility, assisting not just with the selection of suppliers but with the negotiations and eventual contracting," Salcito said.
Some categories are attracting the involvement of buyers more quickly than others. Of those who had no involvement in their company's corporate housing and auto fleet programs, only 3 percent expected to pick up such responsibilities, while nearly 9 percent not involved in business aircraft programs expected to gain involvement.
In some cases, buyer involvement in new areas is thrust upon them; in others, the buyers themselves are the force behind their expansion of duties. "They're making business cases," Salcito said. "Travel buyers are saying, ‘Here's why we should be at least involved, if not taking it over.' "
The interest in further involvement is most evident in risk management and private aircraft management, where nearly 22 percent and 23 percent of buyers who had no involvement, respectively, thought they should.
Salcito is a proponent of buyers playing a role in the management of a company's use of private air services. "Often, it's in the C-level tier, linked with the C-level of finance," Salcito said of where, if not in the travel department, responsibility for private aircraft usage falls within some companies. "If there's any measure of intelligence within the organization, the travel department is involved. For the use of private jets, you need a book of standards: Here's what we have, here's how we use it."
Regarding the management of private air spend, auto fleet or even office supplies, Koch said, "I've always been an advocate of combining these things because they do make sense in the way you manage them, the way you source them, the way you review them, the way you talk about them internally. There are so many similarities."
Ascend Performance Materials manager of indirect procurement Tom Barrett agreed. Barrett, whose career has included responsibilities for fleet management, travel management and many other indirect categories, said, "Now, I've got everything from store room supplies, safety supplies, logistics, equipment and facility management. My responsibilities cover a broad base of portfolios."
Though Barrett noted differences in managing different categories, travel and other types of spend lend themselves to similar skill sets. "If you're a good travel buyer and can move market share and communicate to your travelers, then you have the capabilities to move that forward into other indirect categories," he said. "You look at performance metrics, key performance indicators or service requirements, pay terms, vendor accountability--these are all things that are universal to almost any indirect spend."