Login  |  Register          Free Newsletter Subscription
Zibb
Subscribe to Purchasing
Email
Print
Reprint
Learn RSS

Procurement takes on meetings buy

Purchasing becomes more involved in the corporate travel buy

By Susan Avery -- Purchasing, 9/13/2007

"Our supplier base is stronger now, and that's a big plus," Connie Bocchieri, senior manager of global meeting management at Pfizer in New York told travel managers and buyers attending an educational session at the National Business Travel Association (NBTA) 2007 International Conference and Exposition in Boston recently.

Bocchieri, who works in procurement, was explaining how she and her team source the pharmaceutical company's strategic meeting management program (SMMP) spend during a session called "The convergence of SMMP, travel management and procurement."

To fully cover that convergence, Purchasing has added this new section to the magazine.

Bocchieri recalled for the group her experience at selecting suppliers. Earlier this year, she put together a cross-divisional team that first identified as much of the company's meetings spend as possible using data from accounts payable, meeting cards and incumbent suppliers, of which there were about 100. The team worked to understand the company's requirements, issued RFPs (request for proposal) and went through a seven-step strategic sourcing process, ultimately selecting a small group of preferred suppliers for use throughout Pfizer. "We all really came together and had a dynamic dialogue," she said, of the team effort.

Also on the panel at the NBTA event were Cindi L. Ghormley, group manager of travel services at Frito Lay in Dallas, and Rhonda Kirk, manager of travel and meetings at Tyson Foods in Springdale, Ark. These women also work in the procurement operation at their companies. Moderating the discussion was Connie Cirillo Freeman, vice president of Management Alternatives, a business travel consulting firm in Norwalk, Conn. She too has procurement experience; she was responsible for the meetings spend while working in a previous position at Pitney Bowes.

Freeman began the session with the question, "Are we there yet?" She was referring to the converging of the three disciplines: meeting planning, travel and procurement. While the answer is no, Freeman says purchasing is much more involved in the spend today than in the past and that all three functions must come together to meet the goals of the corporation.

The panel discussed challenges attendees might be up against as they take on new responsibility for the SMMP spend. Among them: Alleviating a sense of loss of control among meeting planners. "We don't want to take over meeting planning," said Ghormley at Frito Lay. "We want to help negotiate contracts and present those planning the meetings with the tools to do their jobs." Her advice: "It's really all about educating internal customers—and suppliers—about the right thing to do for the company."


Connie Cirillo Freeman moderates a panel of purchasing pros representing Pfizer, Frito Lay and Tyson Foods during an educational session on the convergence of meeting planning, travel management and procurement at the NBTA conference recently in Boston.
Procurement best practices. Another educational session at the conference on "Best practices in travel procurement" also focused in on purchasing's growing influence over the travel spend, the second largest business expense for most companies. All told the spend comes to about $205 billion, according to a recent report by RPMG Research Corp.

At the session, travel management consultants presented attendees with a top 10 list of must-do actions for a world-class travel program. Among them:

  1. Get senior management support.
  2. Understand and clearly define objectives.
  3. Align buying goals with the company's overall strategy.
  4. Negotiate price, but buy for value.
  5. Measure and live up to commitments in contracts with suppliers.
  6. Weigh savings gain vs. change pain in negotiations with suppliers.
  7. Consolidate spend data to leverage buying power.
  8. Understand peer performance. Benchmark.
  9. Keep decisions objective.
  10. Respect supplier protocol, but challenge where needed.

In the exhibition hall at the event, more than 250 suppliers—travel management companies, airlines, hotels, car rental companies and technology providers—talked with attendees of ways to better manage the travel buy to help reduce costs and streamline processes:

  • Carlson Wagonlit Travel added ground transportation to its program optimization services, a consulting arm that helps customers evaluate existing spend, contracts and practices and negotiations.
  • American Express Business Travel unveiled a Web-based management information data reporting system, American Express AXIS @ Work, and introduced a management information practice within its Advisory Services group. American Express AXIS @ Work presents corporate travel purchasers with centralized online access to data on company expenditures.
  • Orbitz Worldwide announced an alliance with StarCite, the on-demand global meetings management company. Integrating the technology of the two companies is expected to provide those responsible for corporate meetings with a tool to plan and book travel.
  • Expedia Corporate Travel introduced a reporting tool that allows travel managers to create and run customized reports that aggregate travel data across countries and subsidiaries.
  • Visa announced a strategic alliance with Arcaneo to help companies integrate payment cards with meetings management technologies. The two are working to provide businesses with information they need to manage meeting expenses and assess return on investment.
  • Travelocity Business introduced an online ticket exchange that encourages travelers to make exchanges online rather than calling an agent.
  • Rearden Commerce demonstrated the Rearden Commerce Personal Assistant, a corporate booking tool that allows employees to book conferencing services from the same website they use to book travel, dining, package shipping and other services.

More than 6,000 travel managers, buyers and suppliers attended the event in Boston.

 

How to speak like a travel manager


Osgood: Familiarity with travel terms helps purchasing pros during the RFI and RFP processes.
Familiarity with terms used by those in the travel industry helps purchasing professionals not only when they attend conferences and exhibitions but also when they develop RFIs (request for information) or RFPs (request for proposal) for suppliers during the strategic sourcing process. Elaine Osgood, president and CEO of Atlas Travel in Milford, Mass., translates some common and not so common travel terms for purchasing pros:

  • Advance purchase. Used to be, a traveler needed to book a flight seven, 14 or 30 days before departure to take advantage of lowest fares. While the actual number of days doesn't seem to matter as much anymore, it's still a good idea to book early because the airlines make available only a certain number of seats with lowest fares.
  • Airline Reporting Corporation (ARC). A clearinghouse for airlines. Travel management companies report their ticket sales to the ARC weekly. The ARC does reconciliation and ensures that the airlines receive payment for tickets sold. Travel management companies have to be bonded to cover financial flow through the ARC.
  • Global Distribution Service (GDS). A reservation system such as those available through such companies as Sabre, Amadeus, Galileo or Worldspan. Today a GDS provides travel management companies with all the information they need to issue airline tickets, including low fares promoted on travel websites. While the GDS a travel management company uses typically doesn't carry a lot of weight in negotiations between purchasing and suppliers, some in the industry are familiar with the players in the market.
  • Hidden cities. An individual traveling to one city is issued a less expensive ticket with a final destination of a second city, making the first city a connection. This is considered unethical and illegal in the eyes of the airlines which now have the technology to track these moves.
  • Open jaw. An individual travels to one city and drives to a different city. His or her return flight comes out of the second city.
  • Opt in and full content. These terms indicate that airlines have agreed to make all fares available in travel management companies' reservation systems, including those posted on the Web. This frees up agents' time to spend planning itineraries with clients.
  • Rent-a-plate. A travel management company that issues airline tickets to an organization that manages its travel program itself. Issuers of airline tickets, such as TMCs, must be approved by the ARC.
  • Split ticketing. The process of issuing separate tickets for different legs of an international itinerary to help the client save money. International rate desks at airlines and travel management companies with pricing knowledge and expertise are able to efficiently handle this task.
  • Travel management company (TMC). A new term for travel agency created because TMCs do more today than issue airline tickets; they manage travel programs for their clients.
Email
Print
Reprint
Learn RSS

Related Content

Related Content

 

By This Author

Sponsored Links

 
Advertisement
Sponsored Links

More Content

  • Blogs
  • Purchlive

Blogs

  • Mary Walker
    CAREER TURNS

    November 27, 2007
    Manufacturer's View in a Small World
    Is this not a small world? I was looking at the November issue of Industrial Distribution magazine, flipping the pages, came to manufacturers ......
    More
  • View All BlogsRSS
Advertisements





NEWSLETTERS

Click on a title below to learn more.

Resource Center E-Alert (Monthly)
Price + Supply Alert (Weekly)
Monday Midday Business Report (Weekly)
Electronics Distribution and Global Sourcing (Monthly)
IdeaFile (Twice Monthly)
Supplier Web Locator (4x/year)
About Us   |   Advertising Info   |   Site Map   |   Contact Us   |   FREE Subscription   |   RSS
© 2008 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.
Use of this Web site is subject to its Terms of Use | Privacy Policy
Please visit these other Reed Business sites