After an extensive 13-month request-for-proposals process,
banking giant Citi has selected Carlson Wagonlit Travel to consolidate travel
management in 79 countries where it did not already serve the multinational
firm, including major markets like the United States. The two are in the midst
of implementation, with 36 countries moving to CWT this month and the other 43
to be added in August. CWT already handled Citi's program in 19 nations. The
deal will run for a minimum of three but as many as five years.
"This was the first time anyone in our group is aware
of that we had a truly global RFP process for travel agency services,"
said Mick Lee, Citi managing director and head of travel, communications and
expense management, in a May briefing for BTN.
CWT was serving Citi in Asia and several European countries.
"When the Citi team was preparing to issue the RFP, the first thing we
thought about was retaining our current business," said CWT CEO Doug
Anderson. "When it became clear that there was an opportunity for us to
win more business, in talking with Mick and her team, we engaged at all
levels."
Citi will continue to use two local agencies in markets that represent about 6 percent of the company's spend. "It's very
rare, and Carlson can work with us around those relationships," said Lee.
Citi uses a third-party data consolidator, but during the second half of this
year plans to explore using data consolidation services in CWT's Program
Management Center. Citi also uses an independent database for traveler
profiles.
Asked why Citi chose CWT over other travel management
companies, including incumbent American Express, Lee said, "The incumbent
agencies had built a very strong foundation and done a great deal from 2009,
particularly, to build up the program. We were required to go to an RFP based
on our procurement and audit compliance requirements. And one key
differentiator with CWT—because they all have strengths, and my team has hired
and fired probably all the agencies out there—one of the first things CWT said
to us in the final presentation meetings was, 'We read your RFP, understand
what you're looking for and … here's where we think you're wrong. Here's where
we'll say no.'
"It got our attention because it wasn't just smoke and
mirrors," Lee continued. "It was, 'We have questions for you: Why do
you want this? What are your triggers? What's your endgame?' So rather than
looking at it tactically and answering what we thought we wanted, they
challenged the thinking and pushed us to think differently about every part of
our program. Secondly, they had the technology and the ability to customize it,
and they had the people behind it to deliver what they talked about. Their
first approach was very consultative. We knew it was not lip service because we
had experienced it in the 19 countries they already serviced."
CWT's Anderson said a detailed rollout plan will guide the
implementation, for which North America president Håkan Ericsson is responsible
as program leader. The travel management company will appoint a mix of new
hires and veteran counselors to the account.
Later plans include consideration of low-cost centers for
servicing; initially the configuration will be a mix of in-country servicing
and call centers. "It's hard to develop a program where everything is
equal—cost reduction is just as important as the traveler experience, which is
just as important as compliance to our policies," said Lee. "When you
have all those equally important things, the selection for an agency is
extremely limited. There are some out there who could save you millions today,
but you have hindered two of those components. We have extremely complex and
mandated policies, and that's in place to reduce costs and protect our
travelers. CWT can move us to a low-cost center where we can reduce our spend
while maintaining customized requirements for reporting, traveler tracking and
safety and security."
Anderson said Citi's method of getting bidders to agree to terms and conditions in advance, which the company used for bids in several
categories, including TMC services, "considerably shortened the cycle
necessary to kind of codify the agreement. Our work was spent in designing the
solution and working out the nuances of providing the services and products as
opposed to spending a lot of time negotiating the agreement. Once we had
evolved to the point where we agreed to a solution for meeting Citi's business
objectives, the contracting part was relatively easy. That's not always the
case and it's [normally] not nearly as productive as what we were able to
accomplish with Citi."
"An agency agreement is much more complex than an
airline or hotel agreement," said Lee. "The agency RFP process
evolved a great deal over that 13-month period. The challenge is that the
minimum terms and conditions they agreed to in order to participate were the
minimal ones. But it was the right way to progress because if we had made them
too complex and held to them, we would have limited ourselves as the program
evolved through the discussions. The timeline was also agreed to in
advance."
Lee last year also established a partial nonreimbursement
policy for those who do not book through the designated TMC, and compliance is
up to 98 percent from around 40 percent. Even when a traveler must book outside
the TMC—say, at the airport following a change—"we document that,"
said Lee. "The reason this is critical, of course, is it's how we protect
our traveler in the event of an emergency. We need to know where people are and
the only way we can find them by booking through the designated travel agency.
And that's now a matter of course at Citi—the behavior has changed."
Citi in 2010 spent an estimated $247 million on air travel
globally, according to BTN's 2011 Corporate Travel 100 issue. The company has about 60,000 travelers.