First time to Travel Procurement? No Worries

Posted by QBT Marketing on 31 May 2019, 13:43:25

First time to Travel Procurement

The growth of the procurement function in organisations sometimes sees people responsible for  the travel element without a lot of travel management experience. It's a lot like doing a jigsaw puzzle.

 

Often they have been a traveller themselves and have a passion for travelling. Often, they have been super efficient as an EA managing the travel of senior executives. And occasionally it's just landed on their 'to do' list.

Well, we can help. There is much we can offer to assist and guide you in the procurement process. It's a lot like doing a jigsaw puzzle, choosing all the right pieces, to create a lovely picture; your travel program. When you see it being delivered, it is very satisfying for your travellers and you.  

To assist with the transition, we're offering 9 tips for first-time Travel Procurement Managers, to help in your new role. 

Travel is a category with a difference

Travel is actually quite a complex product category, characterised by a reasonably volatile market, perishable commodities (an aircraft seat cannot be sold after take-off) and unusually complex pricing models. With the possible exception of energy procurement, previous buying experience may not prepare you for the challenges of travel.

Comparing products can be tricky

It’s often like comparing apples and oranges. Two hotel rooms may cost the same, but one is close to your traveller's appointments, the other is a taxi ride away. One has women-only floors, the other has free WiFi and complimentary breakfast. Similarly, one airline may offer lie-flat seats, but another might have a more direct route which cuts an hour or two off the flight.

It’s not all about price, and cheapest is not always best

Try explaining the $50 per night saving to your managing director, who was booked into a cheaper hotel and couldn’t sleep because of the traffic noise below his window, the broken air conditioner and the rock-hard bed. While most commodity purchasing is a balance of price and user satisfaction, the stakes are very high when dealing with staff safety and convenience.

Even if there is a policy people may choose otherwise

Unfortunately, because most people have some leisure travel experience, they often assume they know what’s best when it comes to their business travel arrangements. They will be guided by their past experience and own preferences, even if they contradict your policy. Sometimes, they think they’re getting a better deal and doing the right thing, but may not understand the reasons behind your supplier selections, nor the value you have attained through commitments to suppliers.

Contract renewal may not be routine

Don’t assume that last year’s rates and fares will be automatically renewed. Even when market conditions have remained constant, your bargaining position may be determined by your past performance. If you fell short on delivering the promised room nights or airline market share, you might find yourself at a bit of a disadvantage. Negotiations can also take a while, especially on large, complex accounts, so be sure you give yourself plenty of time.

Travellers may miss the rates and fares you've negotiated

Unlike some categories where your buyers can simply access catalogues, and order goods and services at the contracted prices, travel supply can be much more complex. Importantly, you need to get your rates loaded into your booking system (if you have one), then review to ensure they are available, and match your agreement. Hotel contracts, for example, may not guarantee your rate if the room type you have stipulated is not available.

Travel plans, once approved, do change

They say change is an essential part of life, and it’s certainly very evident in travel. Travel plans can change, even before the trip begins. And change, unfortunately, can add costs. There will be additional nights’ of accommodation, unexpected taxi rides and cancelled flights. So always factor in trip changes and contingency funding.

You can't rest easy when the traveller is back at their desk

Unfortunately, the travel procurement process doesn’t end with the trip. Post-trip duties include reconciliation, payment and traveller re-imbursement – all of which can be time-consuming and complicated, especially if systems and technology aren't getting on well.

Going it alone is not recommended

Most categories can be managed directly, or if it’s too hard, with the assistance of a category consultant. Travel, however, has become very complex for most organisations because of the wide range of suppliers, the complex contracting, and the increasing requirements for technology, and duty of care. So, while you may be able to go it alone to manage your office supplies or car fleet, most organisations need a travel management company to co-ordinate the supply chain, integrate the technology and service the travellers.

If you’re starting out in travel procurement, it can be a bit of a steep learning curve. Past procurement expertise will provide a useful grounding, but be ready for what you don’t know – and what you don’t know that you don’t know.

Get some insight into QBT and how we can help manage your travel category. 

Topics: Procurement

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