Reasons why successfully procuring corporate travel is a balancing act
There is more pressure on procurement departments than ever before
For many sectors, the demand for maximum value on a minimised budget has increased. Ambitious plans combined with precarious economies mean that high expectations have been placed firmly on the shoulders of procurement managers worldwide.
Whether looking to obtain growth, maintain customer relationships, or often both, many organisations see travel as an essential part of their overall business strategy, which is why the people who are tasked with finding and managing a new corporate travel supplier contend with numerous challenges before achieving success...
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Whereas once procurement was often cited as being a ‘back office’ function, one that rested on a series of objective benchmarking tasks, the spotlight has swung and now shines brightly upon procurement managers.
Direct ATPI's Travel Barometer shows that in companies where over 20% of employees travel more than three times a year, there is sufficiently higher expectations that the organisation will grow
This spotlight means that the role has become more strategic and securing the right TMC is now seen as an effective way to propel an organisation forward towards achieving its goals.
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Clients rated sustainability and wellbeing as being
8/10 in importance
to them in Direct
ATPI's Travel
Barometer
Whether it’s a hot potato passed from discussion panel to discussion panel or new technology that makes online bookings tools sell like hot cakes, when a talking point disrupts the landscape of business travel the industry is sure to make the most of it - but how helpful is this for those who procure and manage corporate travel?
Each new corporate travel talking point demands, at the very least, research to understand whether it can be worked into a coherent travel strategy. If stakeholders decide that this is then something to pursue then it’s up to procurement and travel managers to make it a reality.
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When discussing successful travel management, and the procurement process that goes into finding it, the word often used as a measure of success is 'value' – ‘We’re getting the most value from our TMC’ being indicative of a job well done.
The top three business goals on organisations’ agendas are sales growth and new business, reducing operational costs and introducing new products
What the term value means, in reality, is that not all business goals are financial. Stakeholders now, quite rightly, expect more from their travel supplier and are looking for added value that stretches beyond direct cost savings. This most commonly takes the form of duty of care, emergency response and consultative services.
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Employee satisfaction is holding increasing weight when it comes to decision making within organisations, particularly when it comes to travel. The right TMC can be the difference between high levels of traveller noise, unproductivity and higher travel costs and content travellers who feel able to perform in their roles.
Retaining employees and being recognised as an organisation that people enjoy working for has become something to strive for and as a result employers have become more employee-focused. Much time and resource is now spent on gathering employee opinions and ensuring satisfaction, meaning that procurement managers must factor in how potential travel suppliers will effect and, most importantly, improve this.
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With the decision making process constantly altered by economical, governmental and societal pressures, it can be challenging for procurement managers to get a handle on what success looks like. Finding the cheapest does not necessarily equate to a job well done, particularly when it comes to travel.
With many sectors struggling against precarious economies and uncertain futures, it’s more important than ever for procurement managers to feel confident in how best to measure and demonstrate their success.
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All decisions made during the procurement process are, ultimately, underlined by cost.
Although in danger of becoming a clumsy word when compared with topics such as sustainability and wellbeing, cost is still a top priority for most organisations. Balancing cost with other corporate travel initiatives is a problem that procurement are left to solve.
Controlling and optimising costs by procuring the right suppliers was seen as the most important component of travel procurement on Direct ATPI’s Travel Barometer.
In the mean time, procurement managers are left to decipher what ‘value’ means to their organisation and pull a plan together to set about delivering it.
...Meaning that procuring a travel management company has never felt more like a balancing act
Although savings are important to many organisations, factors such as quick response times, strategic consultancy, technology and specialist travel requirements are all taken into account when measuring the success of a TMC – and also the procurement department who sourced them.
Talk to the Direct ATPI team about how best to develop a corporate travel strategy that works at this year’s Business Travel Show
Click here to book a meeting