Hitting RFP reset for TMC sourcing

“Democracy is the worst form of government except for all those other forms that have been tried,” said Winston Churchill in 1947. Substitute “request for proposal” for “democracy”, and “selecting a travel management company” for “government”, and there in a nutshell is how buyers and TMCs mutually feel about the much-derided RFP process.

“The formal element of, I need to get a quote, I need to negotiate, I need to contract, is never going to go away,” said Yvonne Moya, group global procurement director for Randstad. But, according to Katie Skitterall, group commercial director for Direct Travel, the problem is that “the traditional RFP has grown arms and legs. Years ago it would have meant answering a range of questions in an Excel document but now you have additional questionnaires. You are having to engage with IT teams and security teams. It’s no longer a proposal, it’s more do you fit the minimum requirements?”

There are now so many questions in a typical RFP “that it's really just a tick-box exercise, and you spend so much time looking at the answers, which generally all come back the same anyway,” said Ryan Taylor, global head of travel for Harbour Energy. “It does not really help us understand the TMC’s unique selling points, nor how culturally it can work with an organisation like ours. It's a waste of time for the buyer and the supplier.”

Festive Road head of consulting Lora Ellis agrees that traditional RFPs place too much emphasis on cost when two other words beginning with C need to be tested first. “If the TMC doesn’t have the capabilities or the culture doesn’t fit, does it matter that you are paying less than you did before? You are still going to have problems with that programme,” Ellis said.

Rather than tolerating what Taylor called the “clunky and cumbersome” traditional process, an increasing number of consultants, buyers and TMCs are changing how they handle RFPs. Festive Road conducts almost all TMC selections with an alternative approach, while Skitterall said: “I offer that every time now, and early on, maybe two to three years in advance of when they may go to bid.” A substantial proportion of Direct Travel’s new business is now won outside the traditional process.

BTN spoke to three travel managers – Moya, Taylor and Danny Cockton, vice president global travel services for Wood – who each sought an alternative path for their most recent TMC selection process and judged it a liberating success that led to better choices. 

There were several common threads to the approaches taken by the trio. First was detailed articulation of their travel needs to the TMC prospects. Next was sustained face-to-face engagement with those prospects, with an intense focus on ensuring both parties understood each other’s cultures. 

By this stage, for all three clients, it became abundantly clear that some TMCs were not well suited. They were either eliminated or withdrew themselves. Only then would the formal RFP take place with a limited list of candidates – perhaps even just one. In all cases, the travel managers said, the deliberately delayed RFP document was much shorter than one that would be issued at an earlier point in a traditional process.

Randstad calls this alternative approach “innovation sourcing – how can we find a better way to come to a result faster?” said Moya. She and her team sent a detailed brief of Randstad’s travel profile and what it wanted. Then TMC candidates were invited to present their platforms and solutions for 45 minutes each to the procurement team plus business owners and other critical stakeholders. 

The following week TMCs were invited back to participate in what Moya’s colleagues dubbed “the pressure cooker”, where they had to demonstrate or explain how they would manage a variety of “use cases”, such as making live bookings, supporting a stranded traveller or being called into a meeting to present travel data. Some use cases were shared in advance, others without warning to replicate a live situation.

Moya’s team quickly learned which TMCs were capable – and which weren’t.  “You could very soon divide between those with an appetite to think, co-create and grow versus those offering vanilla solutions and an attitude of ‘this is what has always worked,’” she said.

Harbour Energy spent even more time than Randstad on briefing TMCs, to the extent that Taylor invited four candidates “into dynamic workshops where I pitched to them rather than them pitching to me. They kept asking ‘Is there absolutely nothing that you want us to do?’, and we were ‘No, we just want you to come and listen: are we a company that you that that you feel you could work with?’”

Across a full day for each TMC prospect, Taylor’s global travel team made their “pitch”, followed by representatives from IT, travel risk management, emergency response, finance, data privacy and project management. “We could have done with a day and a half in all honesty because we had so much to say,” said Taylor. 

Only three functions were allowed to ask the TMC questions to qualify them on compliance grounds: IT, emergency response and travel risk management. The only other exception to the one-way communication was that the TMCs were asked to give an overview of their business model and growth plans for the next five years. 

After the “pitches”, one of the four TMCs pulled out, and Harbour Energy finally issued a truncated RFP to the remaining three, at which stage another withdrew because it concluded it could not serve the company fully in all markets. Then followed two days of workshops on issues such as technology, plus scenarios such as how to handle workers evacuated from a platform in the North Sea.    

Taylor is delighted with the outcome. “Every business unit feels like it has had a seat at the table,” he said. “It was a unanimous decision on who we went with. We did put them through a lot of different workshops, but I feel like the time we invested has really started to pay off now that we're going through the contracting.”

For Wood’s Danny Cockton, his alternative approach was all about establishing cultural alignment. Another oil and gas company like Harbour Energy with workers in potentially challenging locations, he wanted to know: “Have we got the right people together in the room to make decisions? When the proverbial hits the fan, how do the teams work together? I wanted to see how they reacted and their interest and appetite.”

Cockton quickly learned answers to those questions when he invited four TMCs to bring their teams to visit his in Aberdeen, Scotland within a three-month window. “I got four very different responses,” he said. “One couldn't even get a meeting together. One just wanted to do a couple of hours on the phone, not via Teams. One said ‘Come down to our office and we'll dial in people as and when we need them’.

“But I got another which packed up all their leadership team, sent them up to Aberdeen for two days, booked a meeting room and a dinner table, and we sat around and chewed the fat, understood each other, got a feel for each other and argued a little bit, but in a positive and constructive way. That was ATPI [now Direct Travel], and they got the job.” Getting to know ATPI deeply and early, Cockton added, made the subsequent implementation of 32 countries in 66 days much smoother because “people were beginning to trust each other already.”

Festive Road’s Ellis is convinced all parties benefit from an engagement first, RFP later approach. “We find ambitious T&E leaders want to go with this. They tell us it’s so much more effective, and some have even adopted the process for categories other than travel,” she said. “It does take more time but we find the TMCs are also fine with that because it’s quality time with the client, so they can craft their offer in a way that is meaningful.”