Consultants: a boon to procurement and a successful travel programme, or a case of the emperor’s new clothes? Mark Frary canvasses those in the know
IN SOME BUSINESS TRAVEL QUARTERS, if you mention the C-word, you will be treated to a stream of vitriol – but the C-word in question is not a profanity but ‘consultant’.
Consultants in the business travel management sector have been around for a couple of decades now. At first, they were typically former travel managers whose companies had decided to make the role redundant – consultancy was often seen as a stopgap measure before a new job as a travel manager was secured. More recently, consultancy has become seen as less of a stopgap and more of a valuable link in the business travel chain, offering everything from help putting together travel management company (TMC) tenders to independent advice on technology.
The headcount reduction that has accompanied the recession in some companies means that there is a natural role for consultants to fill the gap, usually on a part-time basis. This set-up means the corporate does not have the expense of providing office space or the extras associated with full-time employment, such as National Insurance and pensions.
Sometimes consultants are employed as part-time outsourced travel managers; at other times
they simply come in to offer specialist advice on procuring business travel to a head of procurement, who’s charged with a wide portfolio of categories of spend such as facilities, fleet and office supplies.
Consultants will typically work on a day rate, or a project fee that might amount to 1 or 2 per cent of the travel spend. All consultants will usually claim to be cost neutral – that their fee will easily be smaller than the cost savings the corporate will enjoy by taking their advice.
So what do the various industry sectors think about consultants?
The consultant
Bouda describes itself as a business travel consulting firm that “helps companies make the right decisions about travel suppliers, policy, processes and technology”. Co-founder Clare Murphy was previously commercial director for Capita Business Travel. She says consultants get a bad press, and that it’s unjustified. “I feel like I am the United Nations sometimes, acting as an interpreter for the client,” she says. “The TMC says something and the corporate hears something else. It’s my job to say to the client: ‘This is what he said and this is what he meant.’”
As well as working as an outsourced travel management function, Bouda consults on technology and self-booking tools in particular. Murphy says this aspect of consultancy is valuable because some TMCs are reselling so many tools that they “are not masters of them all”.
She says: “In one scenario recently when I was implementing a self-booking tool, the TMC said it couldn’t do something in particular, so I had to go straight to the provider who said it could.”
Consultants can also offer value, she says, because with travel management often a small part of a wider procurement role, clients are not always as well versed as the TMCs who “live it and breathe it every day”. Murphy explains that corporates “don’t always know all the things the TMC charges for, and they often don’t know the questions to ask”.
Bouda, where former E.on travel buyer Judith Gledhill is a fellow director, gets most of its business from referrals. “I would always urge companies to take up references,” says Murphy. “We always give potential clients a number of references to choose from.”
The suppliers
Suppliers, particularly in the tech sector, seem convinced of the value of consultants. Get There’s head of business development, Guy Snelgar, says: “I think the travel technology world can be an absolute minefield of complexity and jargon, where flash demos and extravagant claims can overwhelm the real issues and practical solutions. As such, a good consultant can really help buyers cut to the important questions, probe the technology providers’ claims where necessary, and drill down to the key factors that will achieve their objectives. The real value of a consultant is not necessarily to try to be an expert on every available system, but to know the right questions to ask of the suppliers to get the answers – and proof, where appropriate – that they need to make a thorough evaluation and decision.”
Concur senior vice-president Isabel Montesdeoca says: “Today’s large and complex travel ecosystem is evolving fast, and companies can benefit from the expert advice of an independent consultant who can help them select, implement and manage an operational framework and the business processes that best suit their needs,” she says.
Get There’s Guy Snelgar says independence is critical. “In a few cases, some consultants appear to go into the review process with a pre-conceived idea of what the outcome should be,” he says. “This may be based on personal relationships with certain suppliers or keeping within the comfort zone of solutions with which they are more familiar. However, there are also a number of very good consultants who are able to clearly analyse a situation, objectives and approach that a corporate client wants to take, and be hugely helpful in assisting them to cut through the flood of different issues, options and obstacles to get to a really effective and deliverable solution.”
The buyers
Many buyers are open to the idea of using consultants. Prudential’s Stephen Newton, the insurer’s contract review and renewal manager, says the company has used one consultant to “ascertain whether or not I was getting good value from my programme and to review management information provision to make it more meaningful”.
He says engaging a consultant allowed him to make better use of his time. “I have many different sectors to manage – travel is important, but just one of the many,” he says.
Newton believes that consultants vary widely in quality. “Just because someone adds the words ‘travel’ and ‘consultant’ to their name does not necessarily mean they are competent in the specific areas you are looking for expertise on. Unfortunately, the cynical part of me thinks that in tough times a consultant will not decline the instruction but seek to become an expert at your expense. That may be OK, but I would be wary. It is really important to ascertain what their experience is in the particular field first, and, if possible, contact clients they have previously worked with and ascertain their level of confidence and satisfaction with the consultant.”
UBS buyer Mark Cuschieri says the use of consultants “is the exception rather than the rule”. He says the bank leverages the knowledge of incumbent suppliers, and uses its strong network of peers and membership of industry associations “before assigning costly consultants”. However, he says the bank has worked with a consultant firm to audit its current programme and identify any opportunities or gaps to achieve a “best in class” global travel programme.
Cuschieri says that what consultants can bring to the table is “impartiality and access to a rich bank of market data, as well as insight into ‘tricks of the trade’ deployed as tactics on the supplier side of negotiations”.
Caroline Strachan of Astra Zeneca says her company refers to consultants as “outsourced service providers”. Astra Zeneca is currently working with 3Sixty to handle the negotiation of a new commercial model with its TMC and to implement the new service model globally. The advantage, she says, is that “3Sixty sees things differently to us. They bring a broader external perspective and challenge our thinking.”
To find a good consultant, she relies on recommendations. “I used my industry network to check for feedback before engaging in a contract,” she says. “From what I’ve seen, consultants vary in quality and specialism.”
The TMCs
Paul broughton, commercial director of Chambers Travel Management, says there has been a marked increase in the number of external consultants being used to run request for proposal (RFP) processes in the past two years, linked with the rise of procurement. He says Chambers has embraced this change, and is seeking to build relationships with consultants. “When consultants are working on opportunities, they understand when it might be the right kind of opportunity for Chambers to participate,” he says.
However, it is not all positive. Broughton says that sometimes consultants regurgitate the same RFP document from client to client. “Good consultants clearly adjust their RFP template to reflect the idiosyncrasies of their client,” he says.
Traveleads’ joint managing director, Elaine Holmes, agrees. “It is often frustrating that so much of the tender documentation is not relevant to doing the job,” she says.
Andy Hampshaw, managing director of Travel by Appointment (TBA), says his experiences of consultants differ but that they seem to add unnecessary complexity to the process of selecting a TMC. “Consultants obviously have a living to make and the more complex the process, the more they are going to earn,” he says. “I think they are wont to make the process more difficult because of the greater final remuneration. Whether that helps the end client has to be highly debatable.”
Chambers does see the value they bring the client in many cases, however. “They can also make it easier for us as a TMC,” says Broughton. “On a lot of occasions, they are reinforcing and confirming what we’re saying.” He says the recipe for a good consultant is “rounded experience in most areas of travel management, a good grasp for the technology and awareness of the service options that are available”.
And TBA’s Hampshaw admits consultants can be a godsend in some cases. “One major retailer had been going through an exhaustive tender process for two to three years and the process had become a total farce,” he recalls. “They then brought in a consultant who gave the process the direction which it badly needed and brought it to a conclusion.” But Hampshaw does question the neutrality of some. “With certain consultants, it sometimes appears the contracts always go to the same TMC,” he says. “For some tenders, we have been invited to take part, only to no-bid it when we see who the consultant is.”
He believes some corporates employ consultants because they will reduce the amount of work they have to do. “Unless they are looking to totally revolutionise how your company procures travel, I think a good procurement director should be able to conduct the exercise themselves,” he says.
Some consultants do not display the necessary awareness of a client’s policy and history, argues Traveleads’ joint managing director, Gary McLeod. “Often the RFP is an arm’s-length process and you are kept away from the client. The problem is finding out what the client’s goals really are.”