Roundtable: Seeing Travel Management From A Multinational Perspective

Three multinational travel buyers discussed in a conference call with BTN editorial director David Meyer particulars of global management, including travel management company structures, language barriers and the effects of local regulations. Following are edited excerpts of the conversation with Capgemini North American chief procurement officer Vitold Horodecki, based in Montreal; construction and engineering company Kiewit director of global travel and events Cindy Novak, based in Omaha, Neb.; and BTN's 2014 Multinational Travel Manager of the Year, vehicle manufacturer Volvo Group global travel manager Stephan Hylander, based in Gothenburg, Sweden.

Stephan, would you describe your organization as global?

Hylander: We represent 190 markets around the world. We have production sites in 29 countries, all five continents.

Cindy, you, as well?

Novak: I consider our company more of a multinational. We're very heavy in Canada and the United States, and we have a district office in Australia. We do not have any dedicated offices or locations anywhere else. We have primarily Radius agencies serving us, but we're not under the official Radius contracted global program. We just happen to be with companies that are also associated with Radius.

Vitold, what is your travel management company structure?

Horodecki: We have one global agency, Egencia, in about 30 countries.

Cindy, what is the biggest challenge in managing a multinational travel program today?

Novak: It's a broken record, but it is the collection of the data. Even though I only utilize four agencies, it comes from all different directions. That's hard. It makes it difficult to have any type of analysis that is meaningful until we aggregate that. We have to aggregate everything and then make decisions. From a traveler's standpoint, as the manager wanting to make sure that my travelers have the same level of service no matter where they're working or where they are traveling to or from and what agency is supporting them at any particular time, that's a challenge: just to make sure that that level is high at every point.

Stephan, are those your biggest challenges, as well?

Hylander: I agree with the reporting part, even though we've taken some measures to clean that because we had a huge number of issues and constraints when it came to data previously. We are even more diversified when it comes to the number of agencies and the number of countries. We really challenged ourselves internally and our travel management companies to have a proper structure of data coming into us, and that's why we now have contracted Concur as our data consolidator. We are instructing TMCs to send all the data to them, and they clean it up and provide it in one form to us. Even though they are cleaning the data, there are still quite a number of constraints when it comes to the data. It can be simple things like whether they are including taxes or whether they are counting one-ways or return fares. All these types of small details make a big impact on the outcome of the data.

Another challenge is the constant structural changes among our suppliers when it comes to fares, rates with conditions and capacity. We do base our program on a standard that is given by the suppliers when we enter into a contract. It might be the fare structure. It might be the capacity and frequencies. For some suppliers, we have marketshare contracts where the shares determine the level of discounts. Suddenly, they kept capacity or they are changing frequencies or schedules. They introduce suddenly new service classes, like Brussels Airlines did where we thought we were in economy and suddenly our tickets, of course with some added charges, are in the superior class. They removed including baggage to make it as an ancillary fee. Hotels are suddenly offering more favorable rates if you do this and this. During the contract period, we see quite a lot of changes in the structures. That is quite challenging.

Cindy, what are you doing to address your data-collection challenges?

Novak: One of our agencies is the lead aggregator for the data. The other agencies are feeding their data into the lead agency. Then they are pulling it together in a very high-level reporting package. For the specific information per region or per country, I go back to the original.

Is that enough?

Novak: I would like it to be much, much more in-depth on a global level and more timely. It adds so much time when you have to clean the data up. By the time I get my report, it's very much history. It's really not that actionable for future events. We do also have our agencies passing along to the lead agency our pre-trip data so that I have one source to go to. If I need to see who's in a specific country, I have one map, so to speak, that I go to take a look. That has been very helpful. This year, I am working on our travel policy to make it more of a consistent message from country to country but also give it room for more local flavor, which would be more important to travelers per country than an overall blanket policy.

Stephan, what's your approach to local nuances?

Hylander: We launched a new global policy on Jan. 1. The global policy is, as you say, Cindy, more of a very general policy that regulates on a high level what you should do or not do. Added to that, we have what we call a local guideline that describes more locally what it should look like, what agency we contact and how you behave with such things as ground transportation and expense reporting. It gives a very local description of how you are supposed to behave but with the global policy as the governing document, so you can never have a less strict local guideline than the global policy. The other part that we added was that HR is the owner of the policy. We made local HR people responsible for the local guidelines together with the global policy.

You mentioned you are using Concur as a data consolidator. What benefits have you seen and do you expect?

Hylander: As we have this structure in place and strategy to always work with the best suitable TMC in each country, it means that we have this complexity with different data flows and content. In order to get a reasonable grip of the data, as you were explaining, Cindy, by the time you have finally cleaned it up, it's history. You need to redo it again for the next period. For us, it's important that we get the data cleaned and ready to use for internal reporting within due time. We added security data into this. We have pre-trip reporting from every agency to track people in case of some kind of incident.

Novak: Stephan, do you feel your global travel policy really is going to be utilized to attract the employees saying they utilize X, Y, and Z to enhance the travel experience? Are you using that in any way?

Hylander: It's a very good question because that was actually one of the hot topics when we discussed this with major stakeholders internally, because we are extremely strict when it comes to business-class usage, etc. On the other hand, with the new policy, even though it is not very generous toward employees, it still explains why we are doing it. We are not forcing people to travel on low-cost airlines or stay in risky areas in the cities or in low-budget hotels. We are providing them the opportunity to have reasonable comfort, whether they are travelling or lodging. We also try to explain why we are doing this in order to make sure that we are not spending more than necessary on travel. We're also explaining the security aspects behind that. In case something would happen, we will be there to assist you.

Cindy, are you also looking at policy decisions from a perspective of employee recruitment and retention?

Novak: Yes. I report to the vice president of HR. Especially in the oil, gas and mining sector, the competition for employees now is really high, and we want to keep the really good ones with us. Previously, the craftspeople have been on the other side of the travel policy—where if they had to have a 12-hour layover, it didn't matter—but we have been trying to refocus that to make sure that they have a quality travel experience so that when they arrive at the camp or the job site, they're ready to do their work. That has been a big shift in the mentality of our sponsors and our project managers: to make sure that we're having a good experience for those travelers. For our travelers, we're launching a communication marketing plan internally that is citing the benefits of the contracts that we have and what's in it for the travelers so that they understand ... that we do have guidelines and rules in place but the reason is for your safety, security and comfort. We're starting to talk about the benefits of the program as opposed to all the reasons travelers made the wrong decisions. We're flipping it by saying, "Here are the great things that we've done for you. By abiding by our policy, you get to do this, and it's better."

Stephan, can you explain your agency setup?

Hylander: We've been discussing this quite a lot internally. We have figured out that the independence of the countries is more important, due to the fact that though we apply one agency in every country, we do have the same agency in a couple of countries because there aren't so many major ones. We do have a local contract in each country, and that provides us the opportunity to modify and customize the program according to that specific country's needs. We are not depending on other performances than the country where we have contracted the agency. We tried a couple of times to combine the tenders for countries neighboring each other like France and Belgium. We figured out that even though we were speaking to the same TMC, their offer was completely different depending on the country. We decided that we will continue with having this independence and be sure that if we're not happy in the country, we can switch agencies without impacting any other countries or processes. That counts a lot.

What are the most recent accomplishments, Vitold, for your multinational travel management program?

Horodecki: We just completed rolling out Egencia in Europe, and now we are taking on India.

India has been a challenge for you as well, Stephan, correct?

Hylander: Yup.

Talk about your experience there and what you're doing to make that be part of the global program?

Hylander: It took a while before we managed to get one agency to work according to our basic requirements. There were quite a lot of manual processes in place, and the more automated structure that we are looking for took some time. Secondly, we have quite a lot of constraints when it comes to implementing credit card programs, which I'm also responsible for, and lodge card programs mainly because they are not used to it. There also is resistance among managers to provide employees with credit cards. Employees going abroad are still receiving cash advances and coming to Europe with pockets full of cash. A number of things we take for granted in the United States or in Europe are definitely what we have to gradually and slowly put in place in India.

Right now, we have put on hold the credit card implementation due to a number of reasons, mainly because of what we do with delinquencies and things like that. But quite soon we will introduce the lodge card program in India, which will dramatically increase quality, going from 10 days payment terms with hundreds of invoices every month to one invoice with much more favorable payment terms. That's step one, and then the second step is gradually introduce the credit card programs. We will probably have to do a separate deal for India due to the immature circumstances among people, employees and managers.

Horodecki: What is interesting is that on our side, the credit card has not been an issue at all. The agency has been but not the credit card.

Is China a similar challenge to India?

Hylander: No, because China is quite well-structured. Our challenge in China is more to how we apply our global processes in an environment where there exist a lot of laws and regulations that are prohibiting us from applying everything. Like reporting issues: They have only one official GDS to work with, and how do we manage to get the reporting from the GDS to what we apply to the rest of the world?

Vitold, do you have the same issues in China?

Horodecki: It's tough because you have to work with local partners. It's not always easy, but if you have a good relationship with the local China travel management partner and your agency and they are both aligned, then they can deliver.

Among the big obstacles in deploying a managed multinational travel program with a consistent policy are the workers councils and privacy laws in Germany. Is that something you've had to work around?

Hylander: We had some issues when it came to the introduction of the new policy. We are aware of the very strong impact from the unions in Germany. It hasn't been any major issue in Germany maybe because all we are introducing is nothing dramatic. We respect the impact from the unions.

Sweden has some very strong labor unions as well, correct?

Hylander: We do. Anything that the company wants to introduce that might have an impact on the employees' daily life needs to be negotiated with the unions. Otherwise, they have a veto.

Vitold?

Horodecki: The issue is not so much the workers councils, but the need to comply with data privacy laws. In the European Union, they have been pretty strict. And then on top of that there are three countries that are more restrictive than others: Spain, Italy and Germany. But you just need to plan ahead. If you want to implement a process in Europe and you want to do it in these three countries, you just need to have a good agenda and check whether you have all the i's dotted and the t's crossed, and you won't get into trouble. As an example, I'm working on corporate travel policy now, and we are engaging with people in Germany for a policy we want to put into place in early 2016. People are engaged now to make sure that everything is green-lighted in advance. It's just a matter of planning, and then everything is fine. It depends on the company. Some companies that do business in Germany have an interpretation of the laws there that are more relaxed than others. I used to work for HP, and they were very relaxed. Capgemini is very strict.

Does Volvo do business in Russia?

Hylander: We do quite a lot of business in Russia, but for the time being it's quite low. We actually had to close our factory temporarily in Russia due to the very low demand for the time being. Russia is also a quite complex market, mainly because of currency issues. I have been struggling with a lot of credit card implementation in Russia, where not all cards can actually issue cards in rubles. They have to issue it in U.S. dollars.

We're talking about countries where there are regulatory and privacy barriers. There also are countries where language is a challenge, are there not?

Horodecki: There are no real barriers anywhere, except in countries like China or Russia. "Barriers" is the wrong term, but there are things you need to do to bring any project to completion. Even in the U.S., you have federal and local laws and regulations that you have to comply with. It is not barriers but just a set of rules with which you have to comply in order to get things done. Sometimes it might be more strict or less strict. The biggest difference is that in the Unites States, you have a big country with many subsets, so you just feel the pain once. In Europe, you have small countries so you feel the pain every time, but it is exactly the same process you have to go through. In the U.S., these kinds of steps are not taken lightly by anyone, I guess, but companies have more authority to decide what to do. They don't have to go to workers' councils, but at the end of the day they take the regulations seriously.

Sure. Because of challenges with personal information, it becomes harder to do reporting or sometimes to issue policy. You can't necessarily standardize profiles when you have privacy regulations about how you transfer individual data.

Horodecki: You can. What you need to do is figure out where to store them to comply with local laws. There's no reason you cannot again do that as long as your contract covers all of the regulations of the countries you are doing business in. You need to make sure your contract is applicable in Europe or outside Europe, but I don't see any barrier. The profile rules in the European Union are very clear. There are things you cannot ask for in the profile for example when it comes to diversity questions, so you cannot ask, "Are you white Caucasian? Are you African-American? Are you Asian?" But that is not information you need for a travel profile. You can ask for things that are justified for travel: the name and where the passport was issued.

Stephan, do you agree that these aren't barriers, just some native characteristics that need to be worked around?

Hylander: You have to be smart in each country. Another thing that might impact is your internal company culture when you try to apply something globally. Take Volvo, for example, which in history always has been a very deregulated company where decisions are being made down in the organization. That means people are used to having quite a lot of independence. Whatever headquarters decides, they can always apply whatever they think is applicable or reasonable for their local markets. When we come with these more global aspects, you need to sell it internally. You need to make people aware that this is not trying to patronize them, it's that we ask them to contribute to have a better global control, to have better deals in place to decrease administration.

I know some U.S. companies where you have more centrally governed decisions and they say, "You do this. This is what you do. If you're not happy with it, please look for another employer." That is not our environment. We have to deal with that. It depends on your culture quite a lot, whatever you introduce.

Cindy, is that true in your company? Do you have internal challenges that make multinational program management a challenging undertaking?

Novak: We do. It's not to a super large extent. We only are in North America and Australia. Certainly, we have to make sure we're abiding by all of the federal, state and local guidelines and laws. Our biggest challenge is Canada because of the different provinces and the different requirements. It's not so much for HR policy, but it's much more on filing and claiming taxes and things like than for our employees and tracking transborder travel.

French companies can be hierarchical too, right, Vitold? Are there places in the world that pose significant challenges for multinational travel management when it comes to language differences?

Horodecki: In our company, we're aligned with IT, so I look at IT support to see if we need to provide support in English only or if it is bilingual or in whatever language we provide through Egencia. It's just a cost question. How much are you willing to pay to support different languages?

Brazil does business in Portuguese while other Latin American countries do so in Spanish. That makes the region a challenge, but is it a large factor?

Horodecki: Yes, except it depends on the needs of our colleagues. You don't need to do everything in Brazil in Portuguese, although contracts are required to be in Portuguese or bilingual. For example, for Quebec we need to support Canadian French. Not everything in Brazil needs to be in Portuguese. There are things that are mandatory by regulation and there are things you need to do to ensure communication. The question is more about effectiveness rather than what is required by law.

What about for you, Stephan? Are local languages a challenge in your program?

Hylander: We had to translate the policy we launched Jan. 1 into 17 different languages. In some countries, it has to be in the local language in order to be approved and to be valid. France, for example, was one where you actually have to publish the policy both in English and French. Same for Germany.

Horodecki: I was speaking about what is more common practice for contracting. For the final application for the credit card, it is not a choice by the company but defined by local regulations. For internal communication, which includes policies, you could almost choose anything. Mostly, we use English mainly within the company.

Hylander: When I say mandatory, it could be mandatory for company policy, perspective. It could be in some countries like Germany, there is a regulation that I think the workers councils are behind that says it needs to be published in German in order to ensure that people have access to it and should understand what's in the policy.

Horodecki: For buy-in purposes and to get full compliance, we have policy in many countries in the local language even if it's not required by the regulation.

Hylander: That's the thing. Also in the daily work, not only is it related to policy when it comes to meetings that we have with suppliers or internally: Language is an issue. With the young generation, the age of 35 downward, there are less problems with the language. Most of them speak English very well. If you take Japan, Korea to some extent, Brazil, Germany, Spain, France, you have some issues with languages. Mainly when speaking to people in their 50s, for example, in some meetings, we have actually looked to have German-speaking people at the meetings. In Japan, we have to add translators. You can't take for granted that everyone speaks English, even though our corporate language is English.

There's an expense for that, but you can't afford not to pay it. It's not an option, correct?

Hylander: No, we have to.

Vitold, for 2015 and 2016, what are the goals for your multinational travel management program?

Horodecki: We want to get India on board and other countries that are missing like Spain, China—which we are still working to get fully onboard with Egencia—Hong Kong and Singapore and roll out the first true global management information hierarchy, then connect everything end to end smoothly so that we can have real global reporting.

What would you recommend to a travel buyer negotiating a multinational travel management program at this point?

Horodecki: Concentrate your efforts and spend your time in the areas where you can get the biggest return. Sometimes we put our efforts into trying to make sure that everything is covered and end up focusing on areas that are expendable rather than those that are the busiest. Make sure your staffing is supporting your heaviest activity.

Novak: Local management should definitely have some input into the development of the program so that they can give you the needs of the local market, and you should develop the relationship with the local leadership management team. Try to get their buy-in before you go and start changing everything into a one-size-fits-all program, because it sounds great in theory to have one agency and one, GDS but sometimes it doesn't fit in every market. Make sure that you're consulting with the locals before you start making changes that they have to live with.

Hylander: Provide potential suppliers—let's say a final round with two suppliers remaining—with a contract at that stage because we found out that we spend a tremendous amount of time once we agreed verbally. Then we start the contract process and all the legal people have their opinions, and we have to change forth and back. There are details that we can spend three months in negotiating. We can spend six months in finalizing the contract. What we will do now is that we will provide our suppliers with our contract templates to start with and ask them before we sit in the final negotiation. Is there anything in the contract that you could not live with or that you definitely need to make modifications?

This report originally appeared in the April 20, 2015, issue of Business Travel News.