Friday 30 September 2022, JW Marriott Grosvenor
21 November 2022, Hilton London Metropole
Business Travel Show Europe, presented by The BTN
Travel for tech company Oxford Instruments has been revolutionised by its engagement with TMC Egencia. Alex Blyth reports
Oxford instruments is a major British export success story. In the last six years this Abingdon-based nanotech company has grown its turnover from £100 million to £351 million, with 98 per cent of sales overseas, primarily to China, continental Europe and North America, but increasingly to Russia and India. Now listed on the FTSE 250, it is growing at 15 per cent year-on-year and has operations across Europe and North America. It has around 800 employees in the UK, 600 in eight manufacturing sites across North America, and a further 600 in Germany and Finland.
This generates a significant amount of travel. Group commodity manager Ian Wright is responsible for the company’s travel spend, which is now nearly £2.5 million a year, of which 80 per cent is on flights, 10 per cent on hotels, and 10 per cent on car hire.
Five years ago, Wright conducted a thorough review of Oxford Instruments’ travel buying. What he discovered prompted him to transform the system. One of his first steps was to engage Egencia, and the ensuing relationship has revolutionised the way that Oxford Instruments books its travel, generating significant savings, and has also enhanced the travelling experience for its employees.
INEFFICIENT SYSTEMS“I came to Oxford Instruments from a large aerospace company, which had a mature travel buying system in place, so when I began my review five years ago, it didn’t take too long for me to identify the shortcomings in how we were doing it here,” says Wright.
“The two major issues were that all travel bookings were made and logged on paper, and each office had its own way of booking travel, so there was no simple, efficient way of retrieving information on what had been spent where, and by whom.
Wright says this fragmentation of management information meant that the company was unable to trace and manage adherence to policy.“We had no idea whether or not deviation from a policy had been approved or not – we were unable to gain any benefits from leveraging our total spend.”
He decided to appoint a travel management company to help him tackle these issues. He saw several but decided to work with Egencia because of its international capabilities and online platform. Mandy O’Rourke, account manager at Egencia, says: “Oxford Instruments needed to bring its travel management programme up to date. It needed a system which would allow company management to control travel policy as well as helping it keep down costs.
“It also needs to know where travellers are at any one moment. As a truly international company it sends its people to volatile parts of the world, and so a key element of its duty of care is advising those employees on correct protocol in those locations, and tracking their location.”HIGH ONLINE ADOPTIONThe change programme began with the UK head office, but rapidly rolled out across the US and then the rest of Europe. Within 12 months almost £2.5 million of travel spend had been brought on to the Egencia online platform. O’Rourke says: “Typically, we see online adoption rates of around 75 per cent, but for Oxford Instruments it is at 95 per cent in the US, and in the UK in 2013, £1.1 million of travel spend went through the online system.”
It was not easy to achieve this. Wright talks of established cultures – for example, where executives saw travel booking as very much part of their job. A key part of his work with Egencia has been tackling this entrenched opposition to online booking, from what was effectively a workforce of 2,000 travel bookers.
A key tactic has been to engage what Wright and O’Rourke refer to as ‘super users’. “These are the personal assistants, the departmental secretaries, and the executives continually on the move,” explains O’Rourke. “Together this group makes up around 80-90 per cent of all travel booking by the company.”
So, the team focused its efforts on this group, sending out an initial launch email, giving them an induction on the system, holding on-site drop-in clinics, and then running fortnightly webinars to explain updates on the system.
Wright also highlights the importance of involving the finance function. “The finance directors and the finance controllers benefit greatly from the improved transparency of this system, so it is essential to bring them on board,” he says.
“We explained to them how we wanted to remove the emotion from the purchase. We wanted to make executives recognise that although it might look like they are booking a holiday they are in fact making a business purchase, with important financial implications.”
Wright also believes that how you communicate a major change programme like this is vital to its success. He advocates telling people at the outset what it is you want to achieve, and throughout the process accepting that the outcome will not be perfect. “If you get 80 per cent, you’ve done well.”Wright has achieved more than that, with adoption rates above 90 per cent. The benefits to the business have been significant, with average ticket prices falling in each of the past six years. Fees now make up just 2.8 per cent of total travel spend. The business is now better able to forecast travel spend. It also has clearer visibility of where individuals are planning to visit, or where they are, and it gives management information on policy compliance.One example of how it does this is the booking system’s lowest-fare feature. This automatically offers the best fare that is close to the ideal travel time, and flags up to the approver when this fare is not selected, as well as the reasons why. This information is not used simply to demand rigid adherence to policy – in many cases, it is used to evolve and improve policy. For example, frequent flyers are now automatically upgraded, and travellers are now able to mix cabin classes, perhaps flying out premium economy and returning business class.IMPROVED USER INTERFACEWright and O’Rourke plan to roll the system out to China and India next year, and they have recently improved the user interface on hotel booking and car hire so that more bookings have gone through it, and they now have enough data to begin leveraging some deals.
Wright concludes: “Travel is just one part of my remit. I manage £150 million of spend on commodities, from specialised gases to car hire and much else in between. So, it is important to me that I can delegate the management of our travel programme to a partner that will give us the information we need, get the best prices, and operate as part of our team. I’m glad to say that is what I have.”