Procurement and Travel: How Healthy is Your Relationship?

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Spend Matters welcomes this guest post from Katie Virtue, director of category management, travel, at Corporate United.

You probably know that corporate travel programs offer a significant cost savings opportunity and, as a result, are a high priority for most organizations. What you may not know is that the successful management of your travel program relies heavily on the relationship between procurement and travel teams.

Although financial goals are important to all organizations, you must not forget the customer experience component that comes into play with these offerings, and also make sure that company travel policies protect employees.

Anatomy of a Healthy Relationship

Just like there are many components to maintaining a healthy lifestyle, there are a lot of factors that determine if you have a healthy procurement and travel relationship.

Ongoing Exercise for Category Management

Procurement and travel teams should develop an “exercise plan” with regular interactions for the lifecycle of the program. This means a joint approach during the sourcing process, with procurement helping to get the contract over the finish line. Then both sides are involved with business reviews to make sure the program is providing sustainable value.

What can this look like for an area such as meetings and events? The procurement team can help take a strategic approach to meetings spend through consolidation. Consolidation of this spend provides visibility and control, which allows for optimal decision-making.

Balancing Your Diet of Priorities

Ensure a balance of priorities such as cost savings and ROI, as well as satisfaction and duty of care. Procurement and travel departments should be sitting down and discussing their goals and objectives to determine how programs can include both components.

For example, when it comes to car rental, procurement and travel departments should make sure that the objectives of both sides are built into the program. Procurement can ensure that all costs are reviewed, such as city surcharges, mileage charges and one-way fees. In addition, travel managers can balance employee satisfaction by evaluating vehicle availability, loyalty programs and ease of use. 

Cross-Functional Social Interactions

Making an effort to develop relationships with travelers, HR and marketing through regular communication with each group can pay dividends. HR is a great resource to help inform new employees about travel policies and influence compliance. Marketing might have creative ideas for how to evangelize travel programs, which could lead to accelerated adoption of a new vendor. Modern procurement departments have strong cross-functional relationships and should make sure to include their travel counterparts.

A CU member company recently found success with a collaborative intranet project. The procurement and travel teams worked together to build out an informative and user-friendly site that includes details about policies, rewards and leisure perks of the travel program. As a result, employee compliance on the travel program has increased, meaning travelers are safer and feel more satisfied, while the procurement team realizes increased cost savings.

Controlling High-Risk Factors

Discuss and understand factors that present risks to a healthy procurement and travel relationship. Do not be afraid to uncover goals and objectives that don’t align. For example, procurement might present a great savings opportunity to travel but not realize that it could affect bookings through the program and then impact duty of care as a result. Addressing the potential risks up front and creating a plan of action will help ward off future challenges.

Improved Diagnostics for Program Reporting

Report on joint successes and program improvements with goal-oriented metrics from each group. Both procurement and travel are providing reporting on certain metrics, some of which might be the same, like cost savings or compliance. Working together on this effort can create efficiencies and procurement can share insights with travel on how other stakeholders tackle category reporting.

When it comes to travel, procurement and travel managers might need to get creative and adjust how they show savings and ROI. For example, a travel manager may not want to allow employees to access some higher travel expenses, such as non-stop flights or business class. Procurement teams can help the travel manager show the benefits by analyzing productivity and sales results for frequent travelers, or savings from employee retention.

Regular Check-Ups Between Departments

Develop a cadence of checkpoint meetings to address program progress and stakeholder involvement. To truly collaborate, procurement and travel should have regular meetings where they discuss their joint initiatives and plans on what to tackle next. This ensures a regular health check of the relationship.

Reaching Your Health Goals

If you are in the early stages of relationship development with your travel team, set up a meeting to understand their goals and objectives, as well as get a sense for the travel culture at your organization. This will give you valuable insight into the demographics and preferences of travelers, and what type of travel policies executives support. Also, ask them where procurement could assist when it comes to sourcing, contracting and ongoing management. Come prepared with success stories from working with other functions and stakeholders. Finally, end the meeting with a joint plan for approaching all of the “health goals” you’ve just laid out.

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