Tech First: Equipping a Travel Program By Amon Cohen / 3 May 2019 Share It's a quarter century since the first online booking and expense management tools emerged with the dawn of the internet. Working with technology has formed an essential part of any travel manager's professional remit ever since.As the 2020s approach, there is a strong argument that travel managers' relationship with technology is set to intensify. Thought leaders like Johnny Thorsen, Mezi VP of strategy and partnerships for American Express, believe the phrase "travel buyer" is losing validity as a synonym for "travel manager." Instead, they argue, technology will displace procurement as the primary focus of travel managers, who will become what Thorsen calls "program architects."Three converging trends explain this profound shift. The first is the arguably dwindling ability of buyers to influence price through supplier negotiation, which Thorsen believes New Distribution Capability will accelerate as airlines potentially come to know more about the travelers to whom they are proposing a price.The next factor is the trend toward traveler-centricity: a consensus that travel managers must find good tech tools to keep their travelers happy or those travelers will find tools they like for themselves. Finally, there is the unprecedented explosion in tech tools, for travel managers and their travelers alike. The market is proliferating with innovations, built in an age of much lighter technology, in which development costs are low and ease of integration, geo-coding, artificial intelligence, the Internet of Things and many other advances are combining to maximize the speed and minimize the cost of coming to market. "The choices have never been greater than they are today, certainly not in the 25 years I've been in the business," said Louise Miller, Americas managing partner for Areka Consulting. A lot of travel managers don't have the time or money. You've got to be willing to invest. Otherwise you end up delegating your program to your TMC."EAB's Steven Mandelbaum The consequence of these developments for travel managers, according to Thorsen, is that you "have to become much better at evaluating technology products rather than just worrying about air or hotel prices. But you can decide how to make travelers much more efficient, so you need to become a program architect and be able to evaluate system value or appoint someone to do it."Thorsen borrows a phrase from the IT world to describe the task of knitting together numerous apps and tools into a coherent strategy: microservice architecture. "It's a dramatic change of mind-set that doesn't mean just selecting a TMC and booking tool any more. You can no longer make just two choices every three years," he said. Thorsen invokes a fast-growing app called AtYourGate, through which travelers can order food to their airport departure gate. "Wouldn't it be great if [your travel program] could control it and get a 10 percent discount?" he asked.But being a program architect—or tech "portfolio manager" or "curator," to quote terms others have used—isn't straightforward, and although it's the newest tech strategy in town, it's not the only one. Buying ready-assembled and -combined tools from travel management companies or dedicated corporate travel tech giants like Concur is still the way most travel managers go. There is also the much rarer option of building your own. All three of these routes are examined in the bottom sidebar, but before any such decision, travel managers have to look within their own organizations to understand what they need from technology.Matching Travel Technology to Business NeedsPay heed to companywide strategy. There should be clear alignment between a travel technology strategy and overall company strategy. "Things being cool or helpful on their own is not a business case. You have to go back to return on investment and strategic goals," said Steven Mandelbaum, VP of business solutions, including travel, for educational best practice advisory company EAB.For most organizations, such goals include cost control and risk management, but some specificity is needed—knowing which risks need to be managed, for example, as well as how travel technology could help. "The most important thing is: What are the problems you are trying to solve?" said Ellen Trotochaud, travel channel global VP for SAP Concur. One example might be tracking where employees visit for tax liability reasons. Is there a tool to answer that challenge? As soon as buyers raise their voices [in favor of a startup], that gets the ball rolling. Don't underestimate the power you have as a buyer."Conichi's Max Waldman How the company is pursuing its wider strategic goals can help a travel manager develop a sense of proportion about where travel can and can't help. Mandelbaum takes a more skeptical view of traveler-centricity than many others. "When you think about traveler happiness, you have to think about other things that make them happy, like paying them more or hiring more employees to reduce their workload," he said. "Employee engagement is important, but there are lots of ways to get to it. What we hear about traveler choice comes from high-margin businesses with heavy competition for employees. They are a small part of the market."Understand your company's wider tech strategy. "Your technology strategy needs to tie in with your wider company strategy," said Michael McSperrin, global head of facilities and support services for talent acquisition and management provider Alexander Mann Solutions. "If your company is looking to move onto mobile platforms, for example, you have to tie into that too."Alignment is not just a question of strategic direction but also of practicalities. "Will it align with other technology already in use in your company?" asked InVision travel manager Jennie Robertson. Consider enterprise resource planning, finance, sales and HR systems.Work with internal stakeholders. As travel manager, you likely are not the internal owner of all the technology connected with your program. At Alexander Mann Solutions, for example, the expense tool is part of the Workday HR platform deployed across the company. McSperrin works closely not only with HR but also with finance, compliance and business continuity colleagues. "You have to be connected and collective," he said. "Often, I'm not the final decision maker, but I am an influencer."Understand your culture & demographics. The right technology for your workforce is essential for determining strategy. Consider:Geography: If you operate internationally, the tech options you choose must be fit for purpose outside the home country.Demographics: Is your workforce tech savvy? Don't underestimate the desire of older employees to have good technology.Culture: How compliant are employees? Will they be willing to accept a very tightly defined set of tech tools, or will they choose whatever apps they think will serve them best, whether found via the company or a consumer app store?Does size matter? "The largest companies have more resources to invest in technology and will get greater leverage out of it," said Mandelbaum. "A lot of travel managers don't have the time or money. You've got to be willing to invest. Otherwise you end up delegating your program to your TMC." At the same time, Mandelbaum acknowledged that smaller companies have "less bureaucracy to deal with" and may find they can push innovations through faster.German engineering and electronics company Robert Bosch has 100,000 travelers, which partly explains why it is developing a pioneering travel tech strategy. But Nadine Fauser—director and product owner for travel management digitization, strategy and innovation—told a Business Travel Show audience: "What's most important is the mind-set that technology is the key for the future. It doesn't matter how big your travel volume is. Everyone should be aware that digitization is already there."Some funding will be required, no matter what size the company, including for pursuing the microservice architecture strategy Thorsen advocated. "Most buyers don't even have $5,000 in place, but you can do a lot with $25,000," he said.Build, Buy or Curate?Build. Companies tread the DIY route only when there is a rare confluence of circumstances. One of the few who has done so is Mandelbaum, who developed an expense system and fare-finding tool for his employer. "We had the scale and business case to do it, and there was nothing else on the market," he said. "I made that business case and showed what the payback was, and I had the technical know-how; I knew how to code."But technology is simpler today, and coding skills may not be necessary. Instead, "you need to be in tune with what your tech team is working on," said McSperrin, who created a policy chatbot for Alexander Mann Solutions travelers even though he does not consider himself a technologist. "Is there something transferable we can develop? Can we be the test case internally? I built the bot off the back of our own work to look at bots for ourselves and our clients. I was thinking, 'How can I grab onto the coattails of this?' If something is also being done for clients, you are more likely to get investment for it."Buy. Many TMCs and a handful of major travel IT providers push tech stacks for clients. The provider may create the tools or may source them from elsewhere. They are integrated into coherent but sometimes closed platforms from which it can be difficult to extract data or to customize with additional apps.Why do the overwhelming majority of travel managers effectively outsource their tech choices this way? "There is no point in reinventing the wheel," Mandelbaum explained. But it's important to consider potential disadvantages, too. InVision uses TripActions, one of the new breed of hybrid TMCs/tech providers. "It gives us one contract and one point of service, but you are limited in what else you can integrate into your program," she said. "TripActions is 90 percent of what I want, and user feedback is very, very high. If you are going to use a closed ecosystem, make sure it offers enough of what you need."Alexander Mann Solutions uses Egencia, arguably the original TMC/tech hybrid. McSperrin said that platform likewise provides most but not all the technology he needs. The trade-off is worthwhile in his view because a tech strategy has to be easy to manage. "Otherwise, you have too many systems, platforms, log-ins and admin rights. I keep up to speed with the market, so I can lobby and pressure them to innovate."Curate. The newest tech strategy option available to travel managers is to become a microservice architect, to curate a unique portfolio of tech tools. That's the path on which Fauser has embarked at Bosch. She and her colleagues have conceived a perfect trip for which technology assists travelers at every point of the journey, including not only booking and expense but also during the trip, which she found to be the thing missing most."We want an end-to-end travel process from pre-trip to post-trip, but not with a monolithic solution," Fauser said at the Business Travel Show. "We will have a more flexible solution that should be user-centric. What we had before was fitting Bosch processes and not really to the need of users, who were wasting time in the process flow. We see this as a chance to be a more attractive employer because Gen Y is expecting that. And for sure we are also looking at the need to generate savings. We see for the future a platform which is flexible. The core is travel planning and expense, but there is a lot more around it. We dream that we can plug in some new features like chatbots or artificial intelligence or robotic functionalities. We want to be able to plug in startups and not have to stick to a solution which is not really flexible. There are still a lot of companies which are not open to be part of our platform."Fauser admits this ambition faces many challenges, and there are plenty of deterrents. Mandelbuam also said, "Integrating apps is not that easy. There are user fees [and] moving data around. That's a full-time job. You've got to be sure it's worth it." Concur's Trotochaud said plenty of work goes into building the kind of ecosystem her company offers, so corporate clients don't have to. "First and foremost is security: protecting user IDs, being able to adapt as bad people get more sophisticated," she said. "The other side is regulation. Companies like Concur deal with regulatory requirement changes all the time. [Ask yourself:] 'Do I have the IT support for that within my organization?'" We see for the future a platform which is flexible. The core is travel planning and expense, but there is a lot more around it. ... We want to be able to plug in startups and not have to stick to a solution which is not really flexible. There are still a lot of companies which are not open to be part of our platform."Bosch's Nadine Fauser The travel microservice architecture practice is in early stages, but it clearly means more than app procurement. "You can source all these new narrow services one by one, but after a while, that gives you a problem with data management, like consistent profiles," said Thorsen. "Therefore the next logical requirement is that your data system becomes more open. Existing systems must become more open and able to share data without needing approval." The problem, he said, is that "we are not there today." However, tech companies are creating tools to assist with this kind of open integration, such as an independent traveler profile manager.Keep Your Options "Open"No matter what balance you strike between building, buying and curating, this question of open and closed platforms and tech providers—those who will and won't integrate and share data—likely will become a major question for all travel managers as they develop their technology strategies.Miller believes many travel managers will seek a hybrid between buying and curating. "There are two layers of suppliers," she said. "You have to have core suppliers that will cooperate with each other and work on your behalf so you don't have to build all this, and then there are add-ons. Consumer companies which have been around four or five years and made the leap into corporate are worth talking to first. They are plug and play."But that means the "core suppliers" Miller referred to will need to work more readily with each other and with startups, not only in their own environments but also in those of the corporate client's choosing. A travel tech strategy suitable for the 2020s, therefore, arguably will include travel managers who are more assertive about securing the openness that will let them choose providers. "Customers should insist that whatever data is provided to them must be available via an open [application programming interface]. 'I'm the customer. I paid you to do that work. It's me feeding you data,'" said Thorsen.For tech providers that don't change their approach, McSperrin delivered a stark warning. "How open are my providers to allowing partnerships and integration?" he asked. "There is a growing requirement for providers to open up. I will increasingly look for collaborativeness because not doing so encourages travelers to go and find the technology themselves. If the industry doesn't get itself together in terms of collaborativeness, Google will come along and do it for them."How to Work with Travel Tech StartupsOne of the most daunting challenges for travel managers creating a technology strategy is engaging with the bewildering array of startup providers now competing in the business travel market. Hotel booking apps, meetings booking apps, reshopping tools, open booking itinerary collection, virtual payments, budget and reward tools, expense apps—the list of different services on offer is vast and expanding rapidly. Some services are very niche but no less useful for that. How about a tool that predicts the cheapest moment to book a hotel room—Waylo—or an app that lets passengers swap airline seats—Seatswap?With so many new providers all clamoring for business, there's no way they all can succeed. Are they financially sound? Do they provide adequate data protection? "Will they keep up when they have to adapt to more customers and to new countries?" asked Ellen Trotochaud, travel channel global VP for SAP Concur.There are many compelling reasons to avoid startups, but, said Max Waldmann, co-founder and CEO of hotel digital check-in/check-out provider Conichi, there is an equally compelling reason they can't be ignored. "Don't underestimate the importance of innovation in your travel program," he said. "Joiners expect innovation in the overall travel program and perceive travel as the No. 1 tool by which they judge the organization. It's hugely powerful."Here are Waldmann's tips on how to support the startup community:Speak to a lot of startups. Research and then meet the ones you think will make a difference. There are so many opportunities to improve your travel program that you could be overlooking.Make some bets. "Startups don't have time," said Waldmann. If you don't invest in what looks like a good idea, it could die for lack of funding. Johnny Thorsen adds that travel managers need to reconsider the instinct to demand free startup technology in return for being a guinea pig. A few thousand dollars makes little difference to the corporate customer but could mean life or death for the startup serving it.Give solutions time once you go in with them. They need space to learn and develop. To reduce disruption while a startup rights early mistakes, use the technology for a limited group of travelers.Leverage your power. Conichi struggled to get hotel chains to adopt its technology until enthusiastic corporate clients championed its cause. "As soon as buyers raise their voice, that gets the ball rolling. Don't underestimate the power you have as buyers."