ConAgra Foods takes fresh approach to travel spend
Purchasing operation manages spending, introduces online booking tool
By Susan Avery -- Purchasing, 12/13/2007 2:00:00 AM
When Amanda Jackson came to ConAgra Foods in Omaha, Neb., a year ago as procurement category manager, she set three goals: Draft a new travel policy, implement an online booking tool and centralize the meetings and events program. In the past year, Jackson has already accomplished two of those goals and is working on the third.
Jackson came to ConAgra Foods from the travel procurement organization at Schneider Electric and has previously worked as an account representative for American Express.
At ConAgra Foods, Jackson is responsible for managing the firm's $120 million annual travel buy as well as expense management (which consists of a reporting tool and corporate card program) and sourcing for human resources (HR) services and facilities.
Since joining the company, she has helped write and release a new travel policy as well as introduce a new online tool to the company's 6,000 active travelers to use to make reservations for flights, hotel rooms, rental cars and more. She's now working on meetings and events.
ConAgra Foods implemented the travel policy and the online tool in July. In the six months since, it has seen several big improvements. Jackson reports that the company now pays about $70 less for plane tickets employees book online when compared with those placed with a travel agent. It's also seeing an increase in use of a preferred carrier (3%) and in use of nonrefundable tickets (4%).
"This is something we've been struggling with for a long time," she says of advance purchase ticket use. "We were hovering around 12 to 13 days in advance for airline purchases and have never exceeded 14 days. Now we're almost at 16 days." The company also sees an increase of 23% in employee use of its preferred hotels.
More important is ConAgra Foods' position in future negotiations with travel suppliers. "What always comes up is the company's ability to build compliance around a travel program," says Jackson. "Having suppliers see these results and our ability to actually encourage travelers to use certain carriers over others is powerful."
Got support. ConAgra Foods decided to introduce both the new travel policy and the online tool which is the Personal Assistant from Rearden Commerce in Foster City, Calif., at the same time. To help ensure success of the project, first Jackson enlisted support of top management. In April, the company's CFO and senior vice president of human resources sent out an initial communication to travelers about the project and its importance.
Jackson met with the company's strategic suppliers to show them how the tool works before introducing it to travelers. "We wanted them to see what travelers go through as they create their reservations," she says.
Jackson also led training efforts. She and her team helped educate more than half of the company's active travelers before launching the tool. "This helped not only to enforce the communication, but also helped people be more comfortable with the tool and how they are going to get their travel arrangements completed," she says.
ConAgra Foods mandates that travelers use the online tool when booking a simple domestic trip, which the company defines as having less than three destinations. "For anything more, travelers can still call the agency." The agency still also issues airline tickets and handles back-end processes for employee travel.
Second, ConAgra Foods wants its travelers to use its preferred travel agency when they need to use an agency, for security reasons. "We had 50% of our hotel bookings and about 50% of our car rentals going through the agency before we went live with the online tool," Jackson says. "Now, that's upwards of 75%. We're still working on it, but we've seen a significant increase in volume going through the travel agency."
ConAgra Foods also asks that employees use the company's corporate card if they spend more than $500 on travel in a year. "We state in the policy that if a supplier accepts the card then travelers should use it," she says. That includes fast food restaurants and cabs—where card acceptance is fairly new—to drive card usage. She and her team formed a partnership with representatives of the company's financial service center to help sell benefits of the card such as streamlining internal efficiencies.
Improving compliance. Jackson says the online booking tool is relatively easy for travelers to use. There's a single sign-on so they don't need to remember user names or passwords. On the homepage, travelers are presented with options from which they can start to plan a trip or prepare to ship a package. They may also make reservations at restaurants or book entertainment. When planning a trip, once a traveler has his or her itinerary pulled together, the tool presents additional options such as listings of restaurants located near the hotel or information on airport parking and ground transportation. "It helps when travelers are looking at places to stay to know that if they are getting in late or the hotel is not full service that there are restaurants located nearby," says Jackson. "It's comforting."
Reservations for airport parking are guaranteed, especially important to travelers approaching the busy holiday season. "We are going to be communicating a lot more about this feature of the tool because it helps our travelers be more productive and receive a significant savings on airport parking," she says. For travelers that don't park at the airport, the company has negotiated agreements with suppliers of ground transportation services. They may book this black car service online as well.
The hotels listed are ConAgra Foods' preferred suppliers. In fact, the company has negotiated agreements with more than 300 properties across the U.S. "Now that we have travelers conducting so many transactions online, use of preferred hotels has increased 30%," says Jackson. "This is because it's easy for them to see which hotels are preferred and which are not. We used to publish a spreadsheet with the list on our intranet, but most people didn't even know it was there."
Travelers have provided feedback to Jackson and her team on their use of the tool. "They appreciate having all the information in one area," she says.
She says the tool is especially helpful as she sets policy and manages airline market share. Being able to demonstrate improvements in market share is important when negotiating fares with airlines.
"We are analyzing this, but we've already made changes in the tool when we notice there are performances within certain markets that are not as strong as we expected, and we're starting to see the impact of that," she says. The changes help guide travelers to book reservations with preferred carriers.
Jackson monitors call center performance at the travel agency and uses DOT stats (Department of Transportation) to track the airlines. She's also started a project that looks at airline performance more closely and how the company can manage its market share commitments more effectively. And she's talking with representatives at Rearden Commerce about building capability in its tool to help manage the meeting spend.
Jackson: “Our ability to encourage travelers to use certain carriers is powerful.”
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