Select the right TMC
Buyer Margaret Birse uses a very different approach when managing her company’s travel programme through an intermediary, and for very good reason...
Margaret is global travel director at Serco, the international service company, which puts service at the heart of everything it does. This means that Serco employs a dedicated team to look after its travellers and does not outsource this component to a TMC. Serco has teams in UK, America and Australia.
“It’s all about service and people for us,” she says. “Because of the sectors we operate in, we need to have a cost-effective travel programme that delivers value at every level. We also need to challenge ourselves at times to make the right decision around costs and behaviour and we find that this is best supported by an in-house team.”
However, Birse does partner with a TMC to deliver all the other areas of the service. “In 2008 we knew we had some big challenges ahead. We wanted to go online and drive additional savings and efficiencies for our team,” says Birse. Read on for Serco’s journey to find the right TMC partner for its global consolidation project.
STEP 1: Deciding to make the change. Four years ago Serco was working with a global TMC. Birse says that their incumbent agency enabled the company but did nothing to enhance it so she went out to tender to find an agency that would fit better. An RFP resulted in finding Business Travel Direct.
“Any new TMC needed to ‘get us’ as although we’re global, we’re very regional in our behaviour and work with partners to understand the local market,” says Birse. “We call it ‘glocal’,” adds Julie Oliver, managing director of Business Travel Direct.
Birse didn’t want Serco to be just another customer – “not just a number” as she puts it – and had negative experiences with big TMCs. Therefore the shortlist of three was made up of similar-sized, smaller agencies and she made time to meet each of them beforehand. “Conversations need to happen first,” stresses Birse.
“I very quickly knew that Business Travel Direct understood us and were very outcome driven, just as we are. There was a big cultural likeness between our two companies. I also wanted a completely transparent solution, of technology and infrastructure, on a UK contract initially,” she explains.
STEP 2: Go live. BTD is contracted to Serco UK on a management fee based on turnover. BTD, meanwhile, augments the management fee with any value added services that are charged for separately
“It’s not a rent-a-plate but it’s certainly an unusual model,” says Julie Oliver at Business Travel Direct. “We ‘solutionise’ for them,” she explains, serviced by a dedicated Serco technical team inside Business Travel Direct. Work began, first on process efficiencies, including bespoke workflows and automation to support the Serco Teams.
This was followed swiftly by an out-of-hours solution to handle the duty of care issue for travellers on the move globally. Serco retains the option to unplug the out of hours solution if a real emergency is brewing so that its travellers communicate exclusively with Serco's own staff. “We have a green, amber and red warning system and we can choose to take the phone calls back just before it turns red,” explains Birse.
STEP 3: Going 'glocal'. The original contract was soon replaced with a tripartite arrangement with two other regions, using Business Travel Direct as the lead/global partner. “I only have to deal with one supplier – BTD,” highlights Birse. The tripartite arrangement comprises Connecticut-based agency, World Tek and Travellers Choice in Perth, Australia. All companies are partners in WIN, the Worldwide Independent Travel Network with over 6,000 members globally.
STEP 4: The next step was to introduce a self-booking tool and, after research, a region-specific tool was rejected in favour of a global provider, managed by Business Travel Direct’s support staff. The launch of Concur (in 2011) was not mandated initially but mandating for domestic travel followed in 2012, which has helped adoption levels reach an acceptable 68 per cent at present. Internal communications pre-launch included workshops, WebEx and printed information.
Half of Serco’s travel spend can be booked through the SBT and pushback to its introduction was minimal. “There was more concern over what was going to happen to the Serco travel team so we were clear that the tool enhances and does not replace,” explains Birse. “We spent a lot of time allaying their fears of headcount reduction, explaining that it meant the teams could spend more time on itineraries that needed intervention.”
STEP 5: Hotels. The hotel spend, previously with an HBA, moved to Business Travel Direct. Explains Birse: “The old solution was disjointed and the programme was being affected as our preferred suppliers, like Premier Inn, were not being supported. We also wanted to introduce rate bands and hotel caps and it became a real tug of war around information.”
All Serco preferred hotels are loaded into the SBT and all travel has to be pre-approved, which has resulted in a 15 per cent reduction in average rate over the last 12 months. “I was delighted with the results we achieved, which went beyond my initial expectation,” says Birse.
STEP 6: Rail travel. Rail is the one exception to being managed by the Serco-only travel team and is supported by a Business Travel Direct team. They are trying to support Serco to change traveller behaviour away from TODs and last minute bookings to be more cost effective.
STEP 7: The bigger picture. Birse handles all supplier negotiations and Serco has already achieved significant savings as a result. A further saving of £150,000 was achieved in the first year on air fares when Serco moved to BTD.
“We benchmarked what we were previously paying for key trips versus what we were seeing through the Business Travel Direct relationship. This saving was delivered due to the transparent nature of how BTD work with us,” she says. Birse has also negotiated ancillary charges with secondary carriers.
Birse and her team also handle all MI analysis. Business Travel Direct captures all the data then hands it over to the analyst in Serco to ensure that the programme goals are being supported internally.
With no account management team required to manage the account in the traditional way, Oliver and Birse are in constant contact. Birse seeks consultancy support from her TMC for new solutions or for assistance with change management. At the operational level the relationship is equally close and constant with regular continuous improvement meetings staged between the TMC and Serco teams.
STEP 8: Going forward. On the horizon is a project to look at introducing virtual meetings. Serco has videoconferencing units in all three of its main buildings in Hook, Hampshire, while its US business already utilises a system that allows four destinations to dial in at the same time.
Implementing a new back office system provided by Business Travel Direct in Asia Pacific is underway and it looks likely that the TMC may soon be implementing a new territory for travel, India.
“We don’t influence buying decisions, that’s not our remit. Our role is to stand side by side,” says Oliver. “We bring insight from the commercial viewpoint and innovation and work as a true partnership.” Birse adds: “It really is reciprocal.” That doesn’t mean that price isn’t important. Birse sits within procurement so it follows that she is always under pressure to reduce travel costs
“It’s been an amazing journey,” says Oliver. “Most things look the same, which was Serco’s goal. Another big thing for us is to reinforce to large businesses that they don’t need to go to a global TMC. Smaller agencies like ours can be flexible. We have no boundaries or restrictions and we can think outside of the box,” Oliver explains.
Birse advises others embarking on a similar journey to “understand what you’re committed to delivering to your business. I know what my customer wants.” And she adds a final cautionary note: “Don’t be fooled by what looks like an easy option.”