W101: Travel Procurement and Programme Management

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W101 Travel Procurement and Programme Management
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Session Goals

• Overview of Travel as a category of spend
• Snapshot of the industry and the stakeholders
• Roles and relationships within Travel and
  Procurement
• Current practices in travel procurement

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Industry Stakeholders (whos here?)

• Company Procurement Managers, Travel Managers
• Vendors
• Travel Management Companies
• Airlines
• Hotels
• Car Rental Companies
• Technology Companies
• GDS
• Expense Management
• Online booking (SSR)
• Reporting
• Consultants

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Spend Category - Travel

• Travel 2nd or 3rd largest controllable expense
• Volatile industry under rapid change in every
  sector
• Multiple vendors growing dependencies
  (technology)
• Extremely personal to the traveler (each is a
  buyer)
• Heartburn for Travel Manager
• A different paradigm for Purchasing/Procurement
• Perishable commodity not a paperclip or desk

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Whats a Perishable Commodity?

• Revenue opportunity lost if not used time limit
• Examples
• Airplane seat revenue on Mondays flight 100
• If empty seat on Mondays flight no seat
  revenue
• Hotel room revenue on Monday night 100
• If hotel room empty on Monday night no revenue
• Car rental revenue on Monday 50
• If no car rental on Monday no revenue
• Revenue opportunity lost from one day to next
• Standard commodities have no time dependency
• Sell a laptop on Monday/Tuesday, same revenue

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Where Travel Managers Reside

• In 2002, 23.5 report to Procurement
• In 2004, 24.9 report to Procurement
• In 2006, 35.4 report to Procurement

Source NBTA post-convention surveys as reported
in Convergence of Travel and Procurement - a
white paper by Procurement.travel (2006 ProMedia)
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(No Transcript)
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Autodesk Company Profile

• 26 years agofirst product sold was AutoCad
  software
• Now Global Leader in Digital 2D and 3D Design
  Software
• Headquartered in San Rafael, California (just
  north of SFO)
• 5,600 employees, over 2,500 travellers
• Multi-national Corporation with 138 offices in 43
  Countries
• 2.4 Billion Annual Sales
• Market Capitalization over 10 Billion
• Over 50 of sales revenue comes from outside the
  US
• 100 of Fortune 100 Companies use Autodesk
  products

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Travel Program Profile

• Global Travel Spend (Air)
• US 16MM, Canada 2.8MM
• EMEA 4.7MM
• APac 4.1MM (est) fastest growing region for
  ADSK
• Softly mandated travel policy varies by region
• No automated TE reimbursement program (yet)
• Travel program has high visibility with Executive
  Staff
• Our corporate mandate Consolidate and Globalize

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in the beginning...

• February 2004 Fractured Global travel program
• US Consolidated old contract, separate
  agreement for Canada
• EMEA 11 different agency contracts
• APac country-specific TMCs, no links to other
  regional TMCs
• Unable to identify trending/vendors/spend metrics
• Weak vendor contracts
• Low discounts
• Vendors mis-trust always promising, never
  delivering
• Executive staff did not see department as driving
  value
• Little to no communication to employee-base

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Developed Travel Strategy

• Consolidating agency/spend data key to program
  success
• Reviewed all contracts to establish timeline for
  change
• Formed Global Travel Councils in each Geo
• Local country resources included to establish
  buy-in
• Included key departments Finance, HR, Legal and
  super-users
• Recognized local vendors w/regional expertise
  important
• Proposed consolidated travel program to senior
  management
• Obtained Exec-level support for travel
  policy/vendor changes
• Established milestones/deliverables for program
• Created valued relationship with Purchasing to
  drive changes

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Recognized Mutual Dependency
TRAVEL is responsible for the successful
implementation and management of the Global
Travel program PURCHASING is key
stakeholder/partner in helping TRAVEL achieve
success
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Old Travel/Procurement Strategy

• Initial relationship - - challenging
• Old regime win-lose approach to negotiations
• Based contract awards on pricing only
• Posed key challenges with long-time vendors
• Set travel department up to fail
• Promised 100 of our business to win discounts
• Department couldnt meet contract requirements
• Demanded cost savings, not loyalty or partnership
• Money on the table lost savings opportunity

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Reality is...
Its not about the money on the table... Its
about the VALUE on the table
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Shift in Strategic Relationship

• Travel demanded new procurement liaison
• Educated procurement manager on Travel category
• Developed metrics to provide basis for
  negotiations
• Created internal Win-Win for Travel and
  Purchasing

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Shift in Procurement Strategy

• Eliminated seldom-used vendor contracts
• Fewer vendors in market higher savings
• Began to meet contract targets
• ADSK recognized by vendors as trusted partner
• Received increased discounts
• Improved vendor relationships
• Focused contracts on what was achievable
• Included procurement liaison in all decisions
• Created valued vendor relationships

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Best Practice
Best Practice is a management idea which
asserts that there is a technique, method,
process, activity, incentive or reward that is
more effective at delivering a particular outcome
than any other technique, method, process, etc.
The idea is that with proper processes, checks,
and testing, a project can be rolled out and
completed with fewer problems and unforeseen
complications.
Wikipedia
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The Value Proposition

• For the buyer company
• Measurable cost savings and metrics
• Predictable product delivery from vendors
• Consistency for employee customer base
• For the vendor
• Predictable and consistent revenue partner
• Value-based decision making in negotiations
• For both parties
• Mutual dependency on success

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Questions
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Thank You!!