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Use data to drive savings

Challenged by a slump in oil prices, Petrofac was seeking savings and identifi ed live data as a means of getting a better handle on its business travel costs. Andy Hoskins has the details

Data Drive

THE BACKGROUND: A leading FTSE 250 company, Petrofac provides services across the oil and gas sector and has operational centres in Aberdeen, Sharjah, Woking, Chennai, Mumbai, Abu Dhabi and Kuala Lumpur, with a further 24 offices worldwide.

When the price of oil began to slide dramatically in 2014 the company began targeting cost savings. One thing it felt could be improved was the provision of comprehensive live data from its travel programme

The company’s Londonbased global travel advisor, Kate Scully, took the lead on the project. She is responsible for the needs of around 700 core business travellers – the figure runs into the thousands when factoring in crewing teams – and an annual UK travel spend in the region of £10million.

THE CHALLENGE: Petrofac recognised that accurate data was key to making cost savings in a number of ways and, additionally, that it could help the company drive compliance, meet duty of care responsibilities and report on everything from tax issues to carbon footprints.

Previously, Scully had relied largely on annual, six-monthly and quarterly reports that meant figures were quickly out of date, as well as ad hoc data. The company now needed current, detailed data with scope for greater analysis.

“We had a reasonable grip on our data but we wanted to do more consolidation,” says Scully. “Data is key when negotiating with airlines and hotels. you need to know where your spend is and understand your travel patterns in order to negotiate better.”

She continues, “What we were missing were the sudden fluxes – the new projects kicking-off or sudden drops in spending. We wouldn’t see those until it was too late and we’d missed the chance to get discounts in. Having your data in order, and live, is increasingly important.”

Presenting obstacles to progress were the significant size of the Petrofac business, its complex travel needs to often remote or high-risk areas and its disparate business units, each with their own views on travel.

THE STRATEGY: Petrofac worked with its travel management company, ATPI, to trial and implement the agency’s new ATPI Analytics tool that presents live data on all its travel bookings made through the TMC. Users can view anything from spend on a specific project and individuals’ booking behaviour to spend on a certain route or with a particular supplier. The information is presented in a clear visual format making it easy to interpret for users.

“Petrofac was a key example of a client who had an immediate need for actionable data that could feed into informing their travel programme, improve the management of spend and drive change,” says ATPI’s Head of Global Corporate Account Management, Karen Jackson. The tool has been in development since early 2015 and was offered to Petrofac in beta test mode last October.

“I had the tool for a while just to play around with it and provide some feedback,” says Scully

“Full implementation was simple as the data is already there – it’s just signing in. Any reports where I’d previously had to have asked the TMC to run are now all there at my fingertips.”

ATPI gave some training but, as Scully says, the tool is pretty intuitive. Jackson adds, “It’s a powerful tool for Kate to use in live presentations with her senior stakeholders where questions can be answered on the spot, rather than in the traditional way of having to answer a question by requesting another static report after the event.”

THE RESULTS: “Kate’s reaction was immediate and she really embraced the opportunities the tool presented, enabling her to get what she needed, when she needed it,” says Jackson

The biggest achievement looks set to be the projected £2million saving in travel spend over the next 12 months having implemented the tool. This, says Scully, is made possible through “being able to negotiate and secure better deals, picking up non-compliance and addressing it, improving advance purchase behaviour and pushing loyalty to preferred suppliers”.

Notably, bookings are now made 21 days in advance on average, up from 15 days previously, “and that makes a sizeable difference in spend,” says Scully.

In an example of getting an improved deal, she cites a drop in the company’s air bookings between London and Dubai but nevertheless managing to increase discounts by between two and five per cent because Petrofac is able to demonstrate the airline’s market share. “Most airlines respond quicker to a fall in market share than a dip in their revenue target and you can show them where they’re slipping and compare them to other airlines,” Scully explains.

She also notes significant progress in the ability to benchmark against peers’ travel spend and forecasting future travel spend. “Everything used to be manual,” she says, “so it creates real efficiencies. I can get everything I want instantly and it gives me more evidence to go up against our key stakeholders.”

Scully adds, “It helps you forecast for projects when you’re putting in for a bid or tender as we can see average ticket prices, for example.”

The tool has delivered what Petrofac required though Scully suggests more reporting on ATPI’s transaction fees would be useful and provide even more clarity.

“Development is ongoing and enhanced features, including peer benchmarking and predictive analysis of travel data, will be available this summer,” says Jackson.

“That means understanding the ‘what and why’ so that travel managers are able to forecast what might happen, then determine how likely that forecast is to actually happen, and subsequently plan what action should be taken to change the outcome as necessary,” she adds.

Going forward, Petrofac is seeking further consolidation, more global deals and aims to use its data to better leverage its spending power. “In the meantime, just having that power at my fingertips is speeding up my job immensely as well as helping us save money,” says Scully.