Improved communication helps you align travel and procurement goals
Katie Virtue oversees travel as part of Corporate United’s category management group, including car rental, travel management, meetings & events, ground transportation and corporate housing. Corporate United enables some 400 member companies to manage their indirect spend categories.
“We work with diverse buyers, travel managers that sit in procurement or people who are in procurement and own travel, and have different sizes of travel programmes,” she says. “This has given us an insight into how travel and procurement relate.
“There are a lot of pre-conceived notions about what each discipline is or is not good at. Travel is worried that procurement may treat the area as a commodity and not recognise the complexity in working with a number of suppliers; those in procurement think that travel is not focused on saving money, nor working on the analytical side of reporting or managing contracts.
But, Virtue says, the functions are coming together to create programmes that are satisfying for the traveller and the most cost-effective option for the company. “There has to be an initial conversation to understand that there are disparate and shared goals,” she adds. “And because each function will have different skills and insights, there is an opportunity to work together to make programme improvements.
“We approach it by talking about how a healthier relationship between procurement and travel could be developed in six areas: ongoing exercise; working towards a balanced diet; having regular check-ups; considering social interactions and communications; identifying high-risk factors; and improved diagnostics.
1 Ongoing exercise – this means a joint approach from the beginning of a category, when implementing a sourcing strategy, during negotiations, when contracts have been executed and when managing contracts and supplier relationships, so it is important to utilise the skills of both parties. When meeting suppliers for a business review, travel brings insight from day-to-day management of the programme and procurement. This can push the supplier to be more forward-looking, to provide appropriate reporting data to tie into the company goals.
2 A balanced diet – this reflects the different and shared goals of procurement and travel. They need goals that satisfy both sides. We use the example of car rental, where procurement is interested in finding savings in the programme, increasing compliance and eliminating certain surcharges, and travel is interested in traveller satisfaction, what rewards are available for travellers and having an easy rental process. Together, they might set goals that include 85 per cent programme adoption rate, 10 per cent savings, and decide to conduct surveys throughout the programme and look for a 95 per cent satisfaction rate.
3 Regular check-ups – bringing things to a higher level. We have talked about categories that procurement and travel might tackle together but they also need regular check-ups. This might be twice a year, going through the programme to ask what are our major goals, are we coming up to the expiry of a contract, do we have a business review plan? And then determining actions for each party. It is an overview of the relationship and what you are trying to achieve.
4 Communication and social interaction – in one company, procurement worked with HR and marketing to develop an infographic for a new HR programme, which was much more user-friendly than the 20-page document that would have been rolled out to employees. Travel saw that as an opportunity to put the travel policy into an infographic format, using this approach to communicate better and see success in getting engagement and compliance.
5 Improved diagnostics – talking about reporting data, analytics and surveys. Some companies will do surveys of travellers to get feedback, and this will give them the necessary information to bring to suppliers in business reviews and say: this is what we are hearing, and where we need to see improvement. Business reviews often look back at how the programme has performed, but recently we have seen procurement taking the initiative to be more forwardlooking; asking suppliers to come prepared with recommendations and benchmark information about how to improve a programme, what is best in class and how they have seen others achieve that. That way, procurement can hopefully improve what travel is getting out of those reviews.
6 How you get a clean bill of health – this starts with initial checkpoint meetings, having discussions about who owns what, what are the objectives, travel asking procurement to provide insight into goals they are supposed to hit and how they approach that, and procurement getting a better understanding of the travel policy. Are there situations where travel allows for a higher price for air or hotel and is that because of productivity or retention? This will allow procurement to track those areas. It is important to start with understanding on both sides, what are the objectives, the skill sets each side has, and then taking areas where they can start to work together.