Business Travel News Procurement Practices 2009 - (Page 14)

Outsourcing Levels Holding Steady BY CHRIS DAVIS B alancing the need for an in-house travel management staff to help guide a comprehensive strategy with the temptation to limit costs by outsourcing some or all of a corporate travel program is tricky in the best of economic times. When a r ecession pushes increasingly desperate corporations to slash operational costs far beyond any r ecent precedent and tighten the management and procurement of corporate travel, the equilibrium becomes that much more difficult to maintain. Though the specter of travel management layoffs has become all too real for many professionals in 2009, job losses have not yet translated into significant increases in travel outsour cing levels, according to Business T ravel News’ Procurement Practices survey. Only 12 per ent of r sponc e dents said their companies ar e outsourcing more travel services than they wer e 12 months ago, actually outpaced by the 16 percent who said that level has declined. Possibly, deep cutbacks in travel volume have left corporations with fewer big-ticket initiatives to outsource, holding outsour cing levels steady. “When a company’ s losing money, they can’t spend a lot of money on major travel management initiatives,” said Y asuo Sonoda, founder of the Sonoda Travel Management Solutions Use of third party for procurement with specific travel suppliers Air Hotel Car rental Car services Meetings Other 2009 63% 65% 51% 26% 46% 11% 2008 61% 45% 31% NA NA NA consulting firm and a former corporate travel manager with Spansion, Business Objects and Macromedia. Sonoda cited the deployment of integrated online booking and expense reporting tools as an example. “The funding for that is all dried up.” However, interest in involving third parties in travel procurement efforts is on the rise. About 46 percent of respondents said they currently use a thir party for such d efforts, far higher than the 31 percent who said so last year. Those who said they had no plans to do so dropped from 60 per cent of respondents in 2008 to less than half this year. The figur es illustrate an approach that some travel managers and third parties said currently governs travel outsour cing theory: Manage the strategy inhouse, but outsource tactical operations. “We are trying to do a lot of things globally with no people, so we need some people to help us with those tactical exer cises,” said Merck & Co. global sourcing manager of car d and travel Cynthia Teufel. “We’re not outsourcing strategy. That’s what we do best. The tactics of sending out a r equest for pr oposals, that can be outsourced.” The survey results show that Teufel is not alone. In two of the three supplier categories BTN collected data in both 2008 and 2009, far mor e respondents this year said they ar e using a third party to help sour ce travel: 65 percent of respondents said they do so for hotel sour cing, compared with 45 per cent in 2008, and 51 per cent said they use a third party to assist in car r ental sourcing in contrast to 31 per ent c who said they did so last year. “We’ve seen mor e outsourcing of various pieces,” said American Express Global Advisory Services vice president Frank Schnur “Our . business grew at a healthy rate in 2008 and that continues into 2009. Companies are looking to, in some cases, own the strategy and outsource the tactics.” Schnur added that other companies are happy to outsour ce the strategy, too, looking to thir d parties for appr oaches concerning demand and change management, communication, policy construction and compliance. Many companies that have announced cutbacks seek “improved data around the budg- Procurement Practices 14 Use of third-party support for company travel procurement efforts 31% 60% 9% 5% 55% 7% Not currently, but plan to use third party No plans to use third party 38% Currently use third party 49% 46% 2009 April 6, 2009 www.BTNonline.com 2008 BUSINESS TRAVEL NEWS 2007 http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News Procurement Practices 2009

Business Travel News Procurement Practices 2009
Contents
Letters To Our Readers
Measures For Maintaining Discipline
Demanding Pre-Trip Management
Expanding The Use Of Travel Metrics
Outsourcing Levels Holding Steady
Gauging Corporate Travel's Downturn
Procurement Practitioners: Managing Change, Demand

Business Travel News Procurement Practices 2009

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