Business Travel News - Procurement Practices 2010 - (Page 10)

Procurement Practices Reining In Disciplinary Measures By JAY BOEHMER A rmed with newfound support to curb travel costs within every level of the organization, procurement professionals this year are relying less on punitive mechanisms to control traveler behavior and instead are turning to the fundamentals of communication and data availability to empower division leaders, mid-level managers and corporate travelers to regulate errant spend. Savings realized through procurement in the past 12 months* 9% 10% 16% 55% 11% 7% 12% 24% 13% 44% 2010 Average: 10% Less than 5% 5% to 10% 11% to 15% 16% to 20% 2009 Average: 11% More than 20% *As a percentage of total annual travel spending, including cost avoidance Travel procurement professionals have found fewer reasons to pull certain levers to manage travel behavior, according to comparisons between this year’s Procurement Practices survey and the 2009 edition, which Business Travel News editors fielded during the downturn’s deepest valley. Red flags in bookings have gone down, the number of companies deploying mandates has decreased, verbal warnings are heard less often around the office and comparative report cards are on the wane, the survey shows. Though those shifts could be attributed to different survey samples in 2009 and 2010, something else could be in play, said former Association of Corporate Travel Executives president and Bank of America travel buyer Greeley Koch, now director of strategic development at management consulting firm Acquis Consulting Group. “In a way, the travel manager’s job, and this may sound counterintuitive, was made easier in this past year when it comes to compliance,” Koch said. “When you have that top-down support, things happen immediately. When you compare that to the past, the old way was the travel manager had senior management support and a broad policy, but then they had to drive that compliance. They had to make visits, cajole people, provide reports, sit down with senior leaders Savings anticipated through procurement in the next 12 months 9% 6% 15% 13% 22% 47% 25% 41% 13% 7% 10% 26% 9% 19% 36% 2010 Average: 10% Less than 5% 5% to 10% 2009 Average: 12% 11% to 15% 16% to 20% 2008 Average: N/A More than 20% * As a percentage of total annual travel spending, including cost avoidance of all sorts of various divisions, plead and finesse in order to get compliance. I think this past year or so, this was completely different.” The past year has brought travel department goals more closely in line with the chief financial officer’s agenda, as both sought to curb costs. When emboldened by that level of senior management support, travel managers and procurement professionals found themselves playing the role of police officer less and less, as every budget-holder, mid-level manager and division head adopted that role, all in support of the CFO’s vision of cost containment, Koch said. “When I looked at these results, at first they might surprise some people. Why are mandates down to only 51 percent? Why are travel counsel warnings only 44 percent?” asked Koch, citing mechanisms respondents’ companies use to manage traveler behavior. Last year, 60 percent of respondents’ companies deployed mandates and 56 percent issued verbal warnings from travel counselors. 10 April 19, 2010 // www.BTNonline.com // BUSINESS TRAVEL NEWS http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - Procurement Practices 2010

Business Travel News - Procurement Processes 2010

Contents
Letters to Our Readers
Ebbing of Procurement Tide
Reining in Disciplinary Measures
Managing Demand and Structure
Evaluating 2010's Travel Outlook
Negotiating the Role

Business Travel News - Procurement Practices 2010