Deborah Stanton
Deborah Stanton is MasterCard Worldwide CPO and group head for global supply chain, overseeing the travel and meetings services and sourcing groups. Prior to taking that role in April 2009, Stanton held various supply management positions at Honeywell International, Temple-Inland and Whirlpool Corporation. Stanton in November participated in a panel discussion here during an Association of Corporate Travel Executives forum to discuss lessons learned by travel procurement professionals. Her answers to questions posed by the session moderator and audience members are excerpted here.
Traditionally, operations and contracting (or sourcing and servicing) have been two different pieces. In the past, you have operated both ways: having them as a separate group and as a single group. Why have you gone to where you are today?
Today I have a group called travel services and then I have the sourcing organization, called supply management, so they are two separate groups. The operations piece certainly focuses on people and processes, all the traveler-related services, making sure we have the right compliance, right policy, a lot of management around that, a lot of very strong monthly reporting and dealing with traveler issues, looking for ways to make travel more efficient for the travelers and so forth. And when [travel services] is ready to do the various contracts with car rental companies, hotel properties, airlines, etc., they engage a sourcing professional to help with the proposal, bid and selection process. But travel services really ends up managing the relationships. In prior experiences, I have actually had them combined, where the travel services and sourcing all lie within the responsibility of the same individuals. That was a matter of whether the bandwidth really was available to have it combined, and whether the programs were manageable enough to have it combined with the same resources. When it is combined, we probably rely on our agencies more to help us with things like metrics reporting and even some of the proposals and negotiation activity to leverage resources.
What is it about sourcing travel that makes it so much harder [than sourcing other commodities and services]?
As all our companies try to manage travel costs more effectively, we ratchet up our compliance activity. When you do that, there are more controls. Travel becomes very personal for the traveler. For what other type of purchase do you get all the points on the card that you use, the airline that you use, the hotel and car that you use? What other industry is so reward focused? People like their personal choices [as a way] to get those advantages on top of the business travel. As you control more of your programs, you lead the travelers to more specific choices and it is more challenging. You hear about everything.
There has been a big push within procurement to minimize approval for small-dollar spending--if it is under $500, you don't need approval; just put it on the purchasing card or pay for it--simply because the cost of processing all that is too expensive. That seems counter to the recent move in travel for more pretrip approval. More companies want to approve every trip. Are these two different things and the first trend doesn't really apply to travel?
They are two different things. We are definitely looking at p-card efficiencies, but on the travel side we do require pretrip approvals for certain types of trips (less than 14 days in advance, non-customer trips, etc). It is quite manual and it is quite recent as we are managing our costs more effectively during these financial times. We look at that very differently on the purchasing side where we are really trying to get very efficient around smaller-dollar purchases. So we look at it separately. However, we are adopting a much better online, automated approval process so we can get more efficient. We are not going to get there by eliminating pre-approvals, but by automating pre-approval.
In mature programs--with high percentages of participation and compliance, where you have driven the value proposition for the negotiated rates--how do you communicate to your chief procurement officer, who wants year-over-year incremental savings?
The continued focus on compliance, even if you are at high levels, is what you talk about and what you advertise. You can always speak to cost savings and cost avoidance. The various amenities that you add to the hotel night, the points that you get from the airlines ... all those are added value and you can speak to all those. We have been very effective at driving compliance to unbelievable levels at MasterCard. We are easily over 90 percent in our compliance, and as high as 97 percent when it comes to online booking, using the corporate preferred hotels, using corporate airline discounts and using the corporate preferred car rental. I have never seen a company as high as we are at MasterCard, but that really is due to a lot of awareness of what that compliance means to us. There is a cost and a savings to that compliance. Our out-of-compliance activity is reported, and we associate a cost with that. If you are doing agency phone bookings as opposed to online, there is a cost to that. We continue to report that very diligently. Unused tickets is an added way to eliminate costs so we really track unused tickets, and we do it at a business level where they can do something about it--use the tickets and address the people whose behavior is not compliant to the program. We use metrics and reporting, but at a very usable level, and we tie savings to that activity. With a mature organization, that is what you do.
How do you utilize the experiences from your travelers, collect that information and apply that to your policy?
We have used a combination of electronic surveys just to get feedback; sending those out through email distribution where it is very easy for them to click on the link and make their selections and give us ratings on various things across air, car, hotel and all the different aspects of travel. I have also used focus groups and pilot groups, as we are introducing new things. In a previous company, when we were making a choice around an online booking tool, we thought, "What better group to get together than all your admins and executive support to really help choose this tool?" They are not travelers themselves, but they are doing travel arrangements on behalf of many people in the department. We created big workshops, and that is the audience we targeted. We had them come in and actually see the demos and do a little hands-on playing in the sandbox so they really were the ones that had a voice on which types of tools should be selected for online booking. We'll pilot with certain groups before we roll out extensively, we'll do electronic surveys and we'll do focus groups--a variety of things that will give us good input from the audience that we are targeting for those services. We are going to release a survey in about a week, and that will be the first one I have done at MasterCard. As part of that, we have segmented the population to look at the top 100 travelers and really get some specific feedback from them. They are the best segment to get important feedback from, versus your very occasional traveler who might travel a few times a year, with a very different experience and very different feedback.