Continuing our new “Travel Tuesday” column, this week we'll cover some of the travel Spend Management basics. Today, I’ll refer Spend Matters’ readers to a recent Purchasing Magazine study that provides a useful state of the market when it comes to the role of procurement in managing travel spend today. According to the study, while negotiating/contracting and supplier management activities factor heavily into the role of the typical procurement travel manager, Purchasing’s research suggests that the largest challenge is “getting employees to comply with travel policies and preferred suppliers.” A specific concern in overcoming this hurdle is "keeping prices with preferred suppliers competitive with prices travelers find via Internet sites.” Spend Matters' own research, however, suggests that compliance does not have to be as great a challenge as it has been.
By deploying such travel-management tools as Rearden Commerce, procurement organizations can not only drive users to better frontline travel buying in a self-service model; through streamlined booking and management capabilities as well as slick mobile interfaces, they can also make compliance easier than non-compliance. Still, even with a greatly improved booking and management process, it remains incumbent on procurement organizations to ensure that they’re sourcing the best possible deals on a total cost basis (including rebates) while also providing transparency to their customers, who may see a better one-time deal via an online booking site (but which may not be a better deal overall, after factoring in the agreements that procurement has negotiated with the preferred travel supplier).
Aside from compliance issues, the study found a bit of irony in that, despite the importance of supplier management to an overall travel-procurement program, “just 48% of travel procurement pros have a formal process in place for measuring supplier performance.” Perhaps we might call this "travel procurement flying by the seat of its pants"? Just don’t tell that to the company road warriors who’ve got to make do with inferior products. This despite the assertion by travel-procurement leaders that all providers in a certain class are created the same. As any frequent traveler who regularly hires cars from Hertz will attest, there really is no substitute for service -- not to mention clean cars, differentiated vehicles, and overall attention to detail.