Is anyone really happy with the travel management company tender process?
The average travel management company (TMC) tender process requires a two week pre-tender period for procurement to collate internal feedback, desires, operational requirements, company goals and gauge the businesses appetite for challenging current processes.
Once a request for tender document has been put together it is released to known TMC’s for them to spend four weeks cramming their answers into the document, which may be an excel sheet, online document or a simple word document.
Then they wait.
For the lucky few a call or email will come inviting them to a presentation where they can try to impress the key travel category influencers within the company.
The basic process hasn’t changed much in over 20 years. Yes there are smart technology solutions to use in benchmarking responses, evaluation using weighting systems and there are a number of very good subject matter consultants to add insight and keep everyone honest! (please note this consultant does NOT run tender processes)
After over 20 years exposure to this process with over 100 businesses in Australia, USA and UK I am convinced the time has come to challenge this process.
Can Procurement really be happy in saving $2 a transaction on a travel spend of $5m? Can the cost of change really be worth a 0.5% saving in TMC fees, based on total travel volume (TTV)?
There can be fundamental reasons to seek a change in your TMC like poor service, lack of investment in technology, no geographical coverage if your business has grown or maybe it’s the company’s policy that after three years you MUST go back to the market.
So if a company feels they must go to tender let’s consider a few important areas;
Don’t use a tender document that is three years old. There are incredible changes in business travel arena including New Distribution Capability (NDC), online open sourcing technology, new suppliers of air, hotel and travel related content plus the ever evolving traveller expectations of full content, simple booking solution, ability to make changes on the road via an APP & almost zero touch expense solution.
If the travel category isn’t your area of expertise how do you know who to invite? Attending event such as btTB-GBTA educational days is a great start. The more exposure you can have to suppliers and knowledge the better your tender will be. Even so do you just want to only invite suppliers who attend these events or worse still those who you find on page one of google?
Be very clear on your goals and requirements over and above cost saving on TMC fees. Getting the right partner in a TMC is vital to deliver these objectives. Boutique TMC’s will generally give you access to senior management and treat your business as the most important client they have, A larger TMC may have access to greater technology offerings and more solid 24/7 emergency solution. This is not the case for all TMC’s so be very careful to evaluate exactly what you need. Also TEST the capability of the key areas either with real bookings or via conversations with peers.
Service delivery is vital however are your key performance indicators (KPI’s) focusing on what’s important today, not something that mattered when faxes were used! If your online booking uptake is 90% why spend so much time looking at phones being answered in 3 rings? Do phones still ring anyway? Is one hour long enough to deliver a complicated round the world airfare quote? It might be long enough for a consultant to perform an auto-quote on the global distribution system (GDS). A quality consultant would take longer to look at one-way fares, linking numerous specials and they will probably deliver thousands of dollars in savings by taking two hours in their quoting. Make sure your tender clearly details YOUR flying habits, routes and expected deliverables.
Please don’t give an airfare and hotel scenario for the TMC to quote on unless you book and travel on the quoted itinerary. Most businesses have negotiated rates which prospective TMC’s cannot use and it has been known for a few TMC’s to quote using fares / rates that are for other clients which CANNOT be actually used.
If you have a supplier of air, hotel, car hire, travel technology who is vital to your travel program and someone trust, ask for their honest opinion. They should be able to share with you which TMC’s deliver for other businesses. Don’t use this as the single decision making input however it should be a consideration.
Is a VIP service part of your requirement? We all know if someone messes up the travel of the CEO it causes unwanted attention to the travel category. If your business uses a VIP service make sure you investigate the offering in minute detail. Meet the VIP consultant(s) and check their workload, career aspirations and expertise in travel areas for your business.
There are many more aspects of the document, presentations and feedback that need to change.
Maybe we need a new solution to bring this process up to date?
Happy to help you - email us