Bulletin: Merged Program Grows

Three years after Canadian publisher Thomson Corp. and U.K.-based news service firm Reuters merged to form Thomson Reuters and touted the venture as a provider of "the knowledge effect," the company began efforts to gather facts of its travel spending, management and practices.

Thomson Reuters says the "world is awash with data—800 exabytes and rising," but business professionals often lack "good filters." Post-merger, Thomson Reuters' travel sourcing and procurement team was confounded by too many travel data sources and suppliers and not enough intelligence to measure and leverage its $250 million annual travel and entertainment expenditure.

"We are still consolidating our agreements, our processes, our systems, and the travel category is no different," Linda Doty, Thomson Reuters sourcing and procurement vice president, told the Institute of Supply Management-Global Business Travel Association Travel & Meetings Summit in April.

That month, the company introduced a single online booking tool for travelers in the United States and United Kingdom, about 80 percent of its travel market. The tool was sourced independent of the multiple travel management companies contracted under legacy agreements. The company also introduced a new global travel policy that allows divisions to be even more restrictive, and began the bid process for a single travel management company by 2012.

[PROFILE_1]"Even though we're three years into becoming one company, we're still a long way from our [consolidated global travel] destination," Doty said.

Formerly in Reuters' procurement department, Doty two years ago took over travel for the merged company. She previously managed the technology supply category for Reuters and spent two decades in sourcing.

With disparate processes and providers, "it's very difficult for us to provide visibility to our data. We're pulling data from lots of different sources—different agencies and tools. Our stakeholders, senior management, are saying, 'We need to manage our spend. We want to manage the behavior of our travelers. Help us.' We want to help them, but we're trying to get the foundational building blocks of a consolidated travel program in place first, so we can start providing travel by the numbers," Doty said.

The merger of Thomson's 35,000 employees with Reuters' 20,000 left Doty with multiple travel management contracts that didn't expire until late 2011. She said she was unable to terminate them early.

As such, for the past couple years, the merged company has relied upon three major agencies, approximately three dozen smaller ones and six online booking tools provided by its agencies. Online booking tool adoption, Doty found in benchmarking with other companies, was "lagging best-in-class companies by 35 percent."

Booking fees and processes varied among the agencies, leaving "travelers confused and with inconsistent experiences," Doty said. "The ability to enhance our program in an unconsolidated landscape has been very limited. While we know there are many opportunities, until we have the foundational consolidation complete, we often feel paralyzed to pursue some of them."

Multiple agreements also weakened leverage. And the "data variability" among a multitude of sources, combined with the lack of business hierarchy in agency and card data, made it impossible to provide management with visibility in the timely manner they demanded. "Too many agencies and tools mean too many points of failure for systems/processes," low compliance to its card program and difficulty implementing change, Doty said.

Online Booking Tool Selection 

Unable to consolidate to one agency immediately, Doty said, the travel team decided to solicit proposals for a single online booking tool, independent of a travel management company, "under our control so we can provide the global consistency and configuration. That comes with our own responsibility to manage the tool."

The team sought a single tool in which to manage user profiles and configure policy, provide a consistent look and feel for all travelers and rationalize booking fees, which varied by TMC. The single tool also would allow the company to "leverage its scale to manage the licensing costs," more easily implement changes and drive adoption, and provide independence from TMCs, Doty said. As it launched the new tool, the travel team also pushed central billing of booking fees to traveler cost centers.

"It was a year-long process," Doty said. "The tools we looked at were all really good, but there's no such thing as a perfect tool. It's about stacking up your priorities with the best fit."

For Thomson Reuters, the best fit was "Concur, for several reasons," Doty said. That tool now "holds the master profile of record," no matter how many agencies are used. The company loaded about 77,000 records of cost centers, managers and other business hierarchies into the booking tool and programmed a feed from its human resources system to ensure that the hierarchies, and thus reporting, remain current.

More than 27,000 Thomson Reuters employees in the United States and United Kingdom were told of the company's new booking tool in April. On the first day, 1,500 people logged in and more than 200 booked trips. "There were no major issues, crashes or catastrophes—that's what you fear when you launch a new system," Doty said.

Online bookings "shot up by over 20 percent" in the first two months, and "we have seen a notable drop in average ticket price," Doty said.

Single Global Policy Debut 

In addition to the booking tool, Thomson Reuters this year also introduced a revised global travel policy that allows divisions to implement more restrictive provisions.

One division elected to use pre-trip approval. Business unit executives initially wanted the travel team to police pre-trip compliance, but Doty said the "travel team was a little nervous about that. Data we've collected, and the team experience, shows that usually there are not a lot of disapprovals and there are an awful lot of lost fares when trips are not approved for a number of days and fares" vanish. "We said we can help you, but travelers should not book a trip until they have approval."

[PULL_1]Earlier this year, one of the company's two major divisions decided to ban travel for internal meetings. " 'We will still travel for client meetings, conferences and other important events. But we're a global company, have 41 telepresence rooms, phone and all these other tools to help our employees connect. We're not going to travel for internal meetings anymore,' " Doty said the executives explained.

In the first quarter, "[that division's] travel spend dropped 50 percent. If you don't have that sponsorship, you're not going to have those results. We've had travel bans before, but it was always a temporary thing and everyone justified their travel as 'business-critical,' " Doty said. "This time, we were crystal clear, had the right backing from the Markets division, right sponsorship—and it's producing the results that they intended. A 50 percent reduction is huge, and I can see our Professional division wants to follow suit."

That division in April announced travel restrictions on internal meetings and quickly realized "similar impressive results," Doty said.

As part of the policy changes, Thomson Reuters also clarified a murky area of policy compliance in many companies: executive exemptions. "Unless you have a defined list, everybody self-identifies as part of the VIP program," Doty said. "Everyone is held to the same policy. We expect to see great value delivered as a result."

Another policy change requires business class, when permitted, to be booked 14 days in advance. Doty said the travel team can't stop employees from booking business class or traveling outside policy. "Sourcing doesn't have a big stick. Sourcing has access to the data to help managers manage their business units. We collect reason codes and provide that visibility."

Agency Selection 

As its major TMC contracts expire at year-end, Thomson Reuters in the spring started the request-for-proposals process and at press time was on track to select a single agency by late summer "so we can implement by Jan. 1, 2012."

Among the goals, Doty said, are a single place to manage policy, provide a consistent experience for all travelers, leverage its scale and rationalize booking fees, capture data on both online and offline bookings and hopefully lower costs in such other areas as traveler risk management program integration.

Given that the company remains active in acquisitions and divestures and since March announced plans to divest of one division and acquire five other companies, Doty said, the sourcing team "is making sure that our TMC consolidation agreement is flexible enough to take volume changes on either end of the spectrum into consideration so the company will continue to have the best possible pricing and service levels." M&A can impact travel volumes, but Doty said she has found that they tend to balance out.

Employee Satisfaction Surprise 

"One of the first things we did when I took over the category two years ago was to get a temperature check," Doty said. Each of Thomson Reuters' travel management companies was willing to "do that for us. They have great tools, provide a thorough analysis of results, but when I take them into a senior manager, there is always that skepticism that the agency is measuring themselves," Doty noted of her reluctance to accept the offers.

"We have multiple agencies, all using different voice-of-the-customer tools. We need a survey across agencies, across countries, across everything—one consistent set of data that says how we're doing." Doty said she opted to use a traveler survey tool called 3d Travel Metrics, developed by Management Alternatives consultant Will Tate.

"There's always a lot of noise in travel as everyone considers themselves an expert at it," Doty said. "Management in our company was hearing the noise level rise and asking, 'What are you guys doing? We're hearing that everyone is miserable with our travel program. You've got to fix this.' "

The travel team "expected a certain set of results. We thought we had a sense of how things were. We were wrong," Doty said. Overall satisfaction was 83 percent. We sat down with management and said, 'They're not as dissatisfied as you think they are. You're hearing the noise, but let us do this.' "

Survey results detailed traveler satisfaction of the designated TMC, online booking tool and preferred air, hotel, rail, car rental agency and car service providers. The tool also allowed travelers and arrangers to provide feedback about specific providers and hotels, Doty added.

"We have 500 key properties, but 100 are well-used. Travelers and arrangers want to give you feedback—they want their voices to be heard," she added. That feedback, along with overall results, was used in negotiations, and some insight was even built into supplier agreements, she added.

"The survey data was used in so many different areas—it was just invaluable," Doty said.

Metrics That Matter 

Armed with data from its booking tool, card and multiple agencies, Doty said, the travel team has tried to identify the "über-health meter" for travel. The three indicators used are the percentage of trips booked online, advanced-purchase metrics and average ticket price. On the first, Doty said, the percentage of trips booked online versus the prior month—the trend—is more important than the figure.

"Those are our three KPIs right now. They may change as we do better and find different things to measure and trend. I would love to put a fancy scorecard in front of you, but we don't have that yet. I have one from this agency, that agency, the other agency and we paste it together."

In contrast, on the corporate card, Doty said just one metric—"how is our rebate doing"—provides necessary insight on the health of that program.

"We're now in this painful period," Doty said of the travel consolidation journey. "We can't capture every point of data or even say what's compliant and what's not. Every data source we look at raises more questions than answers. But we're just chipping away at all this."

Travel Vision 

"We're trying to get to one TMC," Doty said. "One might not be strong in every market, and we might need to back off of that. But the goal still is to consolidate as much as we can, to get to that data nirvana from booked, charged and expensed data. We don't have that yet."

Each key data source available today has its strengths and weaknesses, Doty said. "Expense data is probably the most useful in our world, but it's not timely. Agency data is timely, but may lack business dimensions. In the end, these three together give a comprehensive view of what was booked, charged and expensed, and we're trying to get the business hierarchy data into the up-front booking" to sort data by cost center and geography.

"Once we have that visibility," Doty said, "we will be able to own, manage and leverage our spend and provide a consistent experience for all of our travelers."

This report originally appeared in the August 2011 issue of Travel Procurement.