In the spectrum of outsourced travel management and procurement services, companies can choose to offload their entire programs to outside specialists or contract only for certain components. Tri-Pen Management Corp. and American Express Business Travel Advisory Services said they have grown their travel outsourcing businesses during the past year while taking different approaches to the market.
These are just two of several firms that during the past few years have launched or expanded outsource services targeting travel procurement. The players range from such larger business process outsourcing companies as IBM and Accenture to travel industry consultancies affiliated with travel agencies or operating as independent entities.
Tri-Pen Management Corp. is among the latter. Comprised of former travel management professionals from Fortune50 companies, the firm's customer roster includes 18 companies from various industries, encompassing $600 million in annual managed global travel spend--ranging from the smallest at $1.5 million to the largest at $120 million. Five of those customers signed during the past few months.
"As the trend toward procurement becoming more involved in travel has picked up, the interest in outsourcing has picked up, because procurement understands outsourcing," said Tri-Pen president Victoria Wofford.
Tri-Pen handles all aspects of a company's managed travel program, including vendor negotiations, travel technology implementation, internal communications, corporate travel intranet sites and even visa and passport services. "We literally act as the directors of travel for the companies we work for," Wofford explained, noting that most clients do not participate in supplier contract discussions, and all but one have no travel management professionals on staff. "Outside of senior management, the employees do not know we are an outsource organization."
American Express Business Travel built a different strategy as it structured its Business Travel Outtasking function.
"The best in class model is a company that has some subject matter expertise internally to handle travel and manage the category, in order for us to have a key point of contact to help us with communications and understanding the culture, but then outtask to us all the work around the different categories," said Herv é Sedkey, American Express Business Travel vice president and general manager. "Outsourcing implies that [clients] would hand absolutely everything over to American Express, including things like internal communications, decisions around which deals to buy, etc. That is a business we are just not in." But the company's services in this area--part of Amex Global Advisory Services--can pretty much cover everything up to that point, Sedkey said.
Amex BTO attracted more than a dozen clients after launching last year. It encompasses "procurement, process and behavior" across all travel spending categories, and can include vendor negotiations, program implementation, compliance tools and policy components--all customized based on the degree to which clients allocate resources to travel procurement.
Applying its global data warehouse that covers the company's huge corporate client base, Amex offers "very intelligent, precise and detailed benchmarking" on supplier deals, compliance levels and such metrics as travel expenses as a percentage of company revenues, Sedkey said.
In addition to air, car, hotel and meetings management, Amex now is expanding services to include airport parking, ground, dining and other categories.
Interestingly, Tri-Pen--which manages American Express corporate cards and travel agency services for most of its clients--is among Amex's largest clients when considering its program as a whole. Tri-Pen uses Amex data reporting tools, Wofford said, but also applies its own data aggregation and decision-support product called TravelMaster--developed by sibling company TravelMaster Technologies--to serve outsource clients.
"Companies are more willing to look at outsourcing travel, which is a very high-touch area that requires industry knowledge," said Wofford. "Especially in the middle market, you would be shocked by the number of companies that still do not have a consolidated, managed travel program. We run across companies every day that are afraid to tell their travelers what to do. There is so much money to be saved."