StanCorp Financial Group during the past several years embarked on a travel management project meant to leverage spending, generate savings and provide better service to employees. Given the insurance and investment company's nonmandated culture, and operations spread around various subsidiaries, the task presented quite a challenge for Margaret Chauvel, who was named project manager and now serves as travel manager for subsidiary Standard Insurance Company. "The travel policy was really a series of guidelines that people sort of-kind of followed but not really," she said here this month at the National Business Travel Association annual convention. "I have been working at Standard Insurance Company for eight years, and for eight years I had been working toward a managed travel program. It is not a fast and easy process."
As the project ramped up, so did savings. According to Chauvel's presentation, savings exceeded $800,000 between March 2009 and March 2010 for a program that generally encompasses $9 million to $12 million in annual travel spending.
Program development began about four years ago when StanCorp hired a director of procurement, "somebody new in the company who doesn't know the story and might like to save some money, and who could talk to people far above my grade level and actually have them listen," Chauvel said. "He saw lots of low-hanging fruit."
"One of the first things" Chauvel did was to convince the finance department to create a consolidated corporate card program that provided travel spending statistics. From there, she was able to do some benchmarking "to present a guesstimated budget structure to senior management."
Early on, StanCorp issued a request for proposal for a travel management consultant. "We knew that in order to convince that C-level body of executives, we needed someone to come in who was an expert in the field," Chauvel said. "We interviewed quite a few consultants." The company ultimately selected Will Tate of Management Alternatives, brought onboard to conduct traveler surveys.
Survey Says ...
Those surveys were undertaken to gauge StanCorp's culture and employees' familiarity with existing travel guidelines and suppliers. According to Chauvel, "People had no qualms telling us that they didn't know the program existed [or] that we had a travel policy; they didn't know we had a travel management company [and] that they had to use the corporate credit card. They didn't know all these things they should have known that were given to them in new-hire packets and/or communicated to them over time.
"We also needed to know, from a senior-officer level, who were our supporters, who was on the fence and who were our detractors," she continued. "You want [the detractors'] input on what is going to make the best travel program for your company. Then they are in a position of creating their ideal with your guidance, and they are in a position to support your program."
A steering committee included three senior executives, two of which were "naysayers," Chauvel said. "They didn't want a program, so it was really important that they be on the steering committee to have some say."
Overall, senior management primarily was concerned "that their road warriors were getting burnt out" and needed special policy and supplier considerations, including airport lounge membership and authority to book hotel rooms on concierge levels, according to Chauvel. "The secondary concern was price."
Finding A New TMC
The surveys pointed out "that we needed to rewrite the travel policy" and needed to find a new travel agency, Chauvel said. "We were getting extremely mixed comments from those people who used the travel management company we had. We weren't 100 percent sure that if we launched the travel program with that travel management company it would be a success.
As it began the RFP process for a TMC, StanCorp first identified 12 agencies "that would work well for us." From there, it sent out a request for information with the "top 10 make-or-break questions," the answers to which allowed the company to halve the candidate list.
"Because our C-level executives were asking us continuously, 'Can't we just use an online company? Travelocity Business is wonderful. Egencia is wonderful,' we needed to consider that and determined that we needed one large TMC in the final pool, one of the online travel management companies and at least two midsize TMCs, plus our incumbent. That brought us down to a good level to work with," Chauvel explained.
The keys to the ultimate selection were comparing agency statistics apples to apples wherever possible ("every travel management company has a different way they like to present their facts and figures," Chauvel lamented); going on site visits ("you learn a lot by seeing the different interactions of the people at the different companies"); and working with the leading candidates on creative ways to set "pricing without sacrificing the service levels."
"We also brought finance in on this to do financial reviews," Chauvel added. "We didn't want to end up with a company--as had happened to us once before--going out of business and just closing the door on us with no warning."
Chauvel later told Management.travelthat StanCorp selected Travel & Transport for travel management services.
For its online booking tool, StanCorp selected Concur Cliqbook. "If we did this program seven or eight years ago, we might have picked a different online booking tool," Chauvel said. "We went with Cliqbook because our population has shifted into the more BlackBerry [type], texting on the fly, the apps ... the whole nine yards. We realized that if we went with an online booking tool that was below that technology level, [our travelers] would go completely stark-raving mad. They like bells and whistles, and Cliqbook has a number of bells and whistles."
Savings
In 2007, Chauvel said senior management was promised $542,000 in savings--including direct savings (generated from such items as negotiated hotel rates), indirect savings (such as efficiencies from new reporting processes) and cost avoidance (working with airlines on airport club memberships for top travelers). "We looked at what we thought we could save the company--the average is about 10 percent off your average spend program--and we chose 5 percent because we weren't entirely sure how all the companies [within StanCorp Financial Group] would react to centralizing the program," she explained.
Between March 2009 and March 2010, and based on a 65 percent online booking adoption rate, StanCorp saved more than $801,000. That included savings derived from travel policy compliance ($312,000), ticketing via the online booking tool ($296,000) and lower agency transaction fees related to online booking adoption ($118,000).
StanCorp's project did not address company meetings, defined as any event involving 10 or more people. "Travel is very far-reaching in a company," Chauvel told attendees, "and has tentacles beyond which any one person can begin to grasp."