The jury’s out on the value of benchmarking within corporate travel. Bob Papworth investigateshow it can be improved
Every September, Harvard University’s Sanders Theatre is packed to the rafters with a motley bunch of academics flown in from all over the world to attend what is arguably the most oddball awards ceremony known to mankind.
The Ig Nobel Prizes, an antidote to the much more po-faced Nobel Prizes, are presented to those individuals and organisations who, in the opinion of the judges, have produced the most pointless pieces of pseudo-scientific research in the preceding 12 months.
This year’s literature prize, by way of example, was awarded to the US Government General Accountability Office for its report, Actions Needed to Evaluate the Impact of Efforts to Estimate Costs of Reports and Studies. Or, as the Ig Nobel citation described it: “A report about reports that recommends the preparation of a report about the report about reports about reports.”
Other 2012 awards went to the authors of exhaustive studies on Walking with Coffee: Why Does it Spill? and Leaning to the Left Makes the Eiffel Tower Seem Smaller: Posture-Modulated Estimation, while past winners include a European study establishing whether red-footed tortoises spread diseases when they yawn (result: they don’t).
The common denominator is that the subject matter is treated with earnest seriousness by the scientists concerned – and the results of their industrious researches are of little use to anyone. This, according to Click Travel boss Simon McLean, also applies to corporate travel benchmarking. Normally the personification of unflappability, McLean becomes distinctly flappable at the mere mention of benchmarking.
“Benchmarking in our industry is a bit like fighting an election campaign in Somalia – whoever is the most corrupt gets to win,” McLean protests, irreparably diminishing his chances of a hearty welcome in downtown Mogadishu. “The client sends out a list of itineraries, and asks the TMCs to fill them in, so obviously you give the best possible prices if you want the business.”
He adds: “It’s really questionable whether the clients are going to get any useful data out of benchmarking exercises. The whole thing is stacked against the incumbent TMC, because they can’t tell any porkies – the client already knows what they can deliver.”
The solution, he suggests, is for the procurement teams to do the benchmarking themselves. He says they should ask to be able to log in to everyone’s systems at the same time, and run the exercise themselves, but TMCs generally don’t allow prospective clients to do that.
BUYER BEWARE
From atravel buyer’s perspective, the whole process of benchmarking comes clearly marked ‘handle with care’. “Benchmarking, just like every other aspect of travel purchasing and management, is only as good as you make it, and then it’s only of any real value if it is used correctly,” says ACTE regional director Caroline Allen. “It takes time and effort, but it can pay real dividends when it comes to supplier and stakeholder negotiations.
“The biggest challenge is finding a way of comparing like with like. That’s where a lot of the data coming from the global TMCs can be misleading, because it is often far too generalised. Travel procurement people need facts and figures that are very specific, and very relevant to their particular requirements."
Andrew Burch at Hillgate Travel argues that - particularly in the case of choosing a TMC, the selection process needs to go much further than a box-ticking exercise. “If you’re just sending out a page to fill, there is no point. Even those who do take the time to set out certain criteria that their prospective agent needs to meet, the bit they miss out on all too often is going to actually visit the candidates face-to-face. They should be going to the TMC and saying: ‘These are the areas I would like to develop in my business – what is the cost of it, what return on investment can I expect, and what else can you bring to the table?’ It’s all about due diligence, which just doesn’t happen that often.”
To a certain extent, as with requests for proposals (RFPs), Burch agrees benchmarking processes have almost become a ritual that has to be seen to be performed, regardless of their value. “In a way that’s sad because every one of us has the power to say ‘no’. What perpetuates the problem is that too few people say ‘no’ – at Hillgate we certainly don’t respond to every single enquiry that comes through and, if more people did that, it would make the process a whole lot better.”
INEXACT SCIENCE
Over at Co-operative Travel Management (CTM), national sales director Paula Cullen has mixed views – what benchmarking achieves, and what it should achieve, can be two very different things. “By definition benchmarking is setting a standard or point of reference by which things may be measured or judged,” she says, before conceding: “It is difficult to make this an exact science in my view.
“In simple terms, if one customer gives a hotel 500 bed-nights a year and another customer gives the same number of bed-nights, they should achieve the same rate with the same terms and conditions. But we know there are many other factors that influence the price proposed by the hotelier – length of average stay, days of the week utilised, longevity of relationship, national or global influences, brand name and so on.”
ACTE’s Allen adds: “Whether you’re comparing prices, policy compliance levels, online adoption rates or any other metric, the integrity of the data is crucial. But what’s even more important is how the information is used – no two company cultures are the same."
Cullen concludes: “Benchmarking does have a firm place in negotiation but it should be done in the wider scope of truly understanding the business need and selecting the offer or process that demonstrates most value.”
The key word, of course, is “should” – a conditional that strongly suggests not every benchmarking exercise comes up to scratch. What is needed, surely, is for someone to benchmark the benchmarking – if nothing else, the industry might end up with an Ig Nobel Prize.