Op-Ed: Making Management Musical

You want the latest MP3 player, so you go shopping. Shopping bots help you compare features, prices, storage and design. Friends offer their experiences. Consumer reviews offer other opinions. You know what you liked in your old device and what you want in a new one. Your work is complete, your exhaustive search has given you a great MP3 player and you couldn't be happier! Yet, all you do with your purchase is admire its design—you never even turn it on!

This sorely underutilizes the product's full potential. If sourcing is the process to find the MP3 player, category management is the process to get all you can out of your purchase.

Category management is the broad end-to-end process that involves the entire organization supporting a holistic category strategy. Sourcing related to travel management has often been limited to the sourcing event alone. Category management broadens the definition to offer strategies to better manage processes, resources, knowledge and activities so that all benefits from the awarded contract are realized and continuously improved.

Category management is a process, not a title. It's about how all the components of a travel program blend together for the best outcome. It's about bringing value to stakeholders.

Category management steps commonly include evaluating opportunities, forming a team and gathering data, developing and implementing a strategy, managing suppliers and continuously improving.



Common Category Management Missteps

Consider the following statements: "We have a travel management company service-level agreement, so the travel agency will perform as desired," and "It's working well enough" or "If there's a problem, someone will let us know."

The first typifies the TMC relationship, while one represents the customer focus shortfall. While the first may be an expressly stated management objective, the others tend to be the unwritten rules for managing a travel program.

The first statement, "We have a TMC service-level agreement, so the TMC will perform as desired," is a great start, but it's too narrow. Traditional SLAs can create a feeling of "us versus them." Category management tools can help map the links between suppliers and processes to tie each concerned party to the success of the agreement. In turn, a team approach is unified.

Additionally, the key category management step of supplier relationship management is excluded from traditional SLA arrangements. SRM works collaboratively to streamline the processes between buyer and seller. Defined responsibilities, measured results, effective timelines, delineated goals and categorized benefits are hallmarks of this tool. SRM creates mutually agreed-upon processes, goals and measurements so all parties align to achieve the best results possible.

As for, "It's working well enough" or "If there's a problem, someone will let us know," no one manages like this, right? Too often, for many reasons, they do. Take the typical midmarket buyer who has travel along with four other category responsibilities: There isn't time to focus on one, so firefighting becomes the management norm.

Creating value for the customer is an often-overlooked key to successful category management. Ensuring a deep understanding of the customer's experience along with business unit needs can take the value proposition to previously unreached heights.

While surveying travelers and travel arrangers is routine, it is often performed by the travel management company. Independent surveys of travelers and travel arrangers are a must for gaining credibility with the buyer's customers.

Customer feedback is excellent, but it's at the pinnacle of category management when combined with proactive management of the business unit needs.

Demand analysis, collaborative forecasting and tailored business unit analysis create the customer dynamic often missing from successful corporate travel management programs. Building an internal travel consulting practice not only creates demand for your services, but also allows mutual successes to be realized, which builds procurement credibility for the entire sourcing organization.

Category management combines the critical elements of data gathering and performance management. The facts are provided by gathering data on customer satisfaction from both the traveler and travel arranger perspectives and understanding what the customer wants from a business unit level. Turning that information into actionable management is part of ongoing performance management.



Defining Your Program

Effective category management necessitates defining your program's vision and mission. Targeted vision creates a focused mission. This builds your internal business from customers that value your results. Addressing the following questions can help pinpoint your mission:

• How do we sustain the results of a sourcing effort for the long run?

• How do we create value for stakeholders so they rely on and trust us?

• How do we market results to build further demand for services?

Category management leads buyers beyond the value created from the sourcing event. It requires community thinking, resulting in both vertical and horizontal value creation. It raises the status and awareness level of those managing travel to the entire organization. It engages all supplier categories and enhances communication, efficiency and results. Those unwilling to push their programs with category management are likely to be left behind.

Vinyl records served their purpose, but the music business has progressed. So grab your new MP3, unlock all its cool features and rock on!