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If you negotiate a corporate travel contract, how do you
ensure that travelers use it? A technology startup has delivered customized
point-of-sale messaging to employee computer screens to curtail leakage in
travel, office supplies and other procurement categories.
ProcureApp enables companies to push reminders and links to
preferred channels to employees who access specified websites using company
computers. A company's information technology department must install the
thin-client application, but the procurement team would identify the websites
or specific web pages of concern, craft messages and dictate redirect options
that would best work in its culture.
ProcureApp business development senior vice president Phil
Hammer said he demonstrated a "proof of concept" for the product at
an industry event last August and "got sufficient feedback to continue"
developing the application. The privately funded company with 12 employees in
October released the first version and in February delivered version 3.1 to 25
"Our focus is the 30 percent to 40 percent of managed
spend that isn't going through procurement channels," Hammer said.
Procurement process studies conducted by A.T. Kearney and The Aberdeen Group
projected a "5 percent to 20 percent savings on every dollar you get back
into your program," but even a 10 percent savings would assist companies "internally
looking to improve the bottom line without impacting business," he added.
"Suppliers have done a great job seducing us" away
from preferred options with low-fare guarantees, hot buys and other promotions.
Most companies, Hammer said, face three major challenges to secure compliance
to travel procurement programs: supplier websites, employees who are busy and
employees who "just don't know" about policies.
Retired travel buyer Richard Wooten, now a consultant to
ProcureApp, said compliance activity always had consumed a significant amount
of his time in various travel management positions. "The key to compliance
is to catch people up front before they buy," rather than after the fact,
After-the-fact "compliance activity—taking card data,
analyzing it, identifying merchants and then taking it down to employee and
department levels and trying to work with a department manager and employee to
change behavior—took a lot of work," Wooten said. With little employee
turnover or expansion, procurement "could probably whittle noncompliance
down over a year or two. The problem is companies aren't static, so this is
just a continual problem."
[PULL_1]ProcureApp enables procurement departments to display a
message and provide a one-click redirect. Customers identify websites or
perhaps just pre-checkout pages to allow employees to look, but not book, on
such sites, Hammer said. The travel or procurement team also crafts the message
to appear in an "info-bubble" on the computer screen, determines
whether to include an "ignore" button and sets the redirect URL, all
without additional IT involvement.
While Hammer said his focus now is on enterprise managed
travel programs, the technology could help small and midsize firms gain
compliance to preferred channels or provide coding to those who wish to use
supplier sites as preferred booking channels.
The technology allows companies to "drop in contract
codes" for employees who insist on booking on airline, hotel, car rental
or other sites. "They ignore the messaging and redirects, but you still
have the opportunity to capture discounts and data," Hammer said. That
functionality, Wooten noted, would be especially useful on car rental sites, to
not only drop in the contract codes, but remind employees to decline insurance
if already provided in the negotiated rate. That functionality also provides
the means for companies to book directly with a supplier to bypass booking
fees. "There is some interest from airlines," Hammer added.
Cost And ROI
ProcureApp charges a license fee, along with an
implementation charge for specified support hours. Clients typically recoup
savings equal to those costs in "less than 30 days," Hammer said.
Hammer said the application works with Firefox, Google's
Chrome and Microsoft's Internet Explorer browsers and will use Google's Ice
Cream Sandwich technology for its first mobile release. The convergence between
the browser and mobile systems will allow ProcureApp to develop once to "do
on mobile phones what we can do on PCs and laptops."
originally appeared in the May 2012 issue of Travel Procurement.
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