Research has shown that, in many organizations, Travel & Expense expenditures are the second or third largest item of controllable expense.
Travel management companies (TMCs) plan travel, process reservations, fulfill transactions, support online booking tools, report data, implement technology, track travelers and provide support. They also consult, negotiate, facilitate, drive compliance and enable buyers to focus on strategic endeavors like spend analysis, traveler satisfaction, budgeting, supplier relationships and policy.
Establishing a travel management company relationship is not just about finding the right partner but also implementing the right configuration.
Consider these areas as you begin to execute your next formal travel management Request for Proposal (RFP):
Lay the Groundwork:
- Understand your company’s vision and overall objectives: cost vs. service, regional, national or multinational structure, traveler-empowered vs. a mandated program, etc.
- Ask the travelers and budget heads about their perceptions and experiences.
- Consider an audit of your existing service provider including a technology assessment and develop a plan.
- Set up an advisory committee of travel arrangers, frequent travelers, finance managers/procurement, HR and technology to help evaluate proposals during the RFP process.
- Assess whether you wish to do this in-house or outsource part of the selection process.
Dive into the Process:
Gather Your Data – Engage incumbent travel management companies, charge card providers, suppliers, your data consolidator (if one is used) and internal departments to collect available data by country and location. Observe the 80/20 rule. Seek maximum data for the highest-volume countries and locations and generally estimate data for the smallest locations if not readily available. Collect granular data, which helps TMCs develop operational plans and pricing proposals.
Distinguish between needs and wants – Things that are needed are identified in the RFP using words like “will”, “shall”, and “must”. These are the requirements. Those things that are mere wants are identified by words like “may”, “can”, and “optional”.
Decide What the Winner Will Look Like – The proposals you get back in response to your RFP will differ. You should decide up front whether you are looking for the lowest cost, the fastest delivery, or some combination.
Narrow the Field:
- Pre-qualify bidders based on company procurement guidance, internal need analysis and client profiles of bidders’ customers. Small or midsize accounts considering a mega TMC should investigate services the TMC typically offers customers of that size and ensure services offered are commensurate with needs. Anyone involved in the process should sign nondisclosure agreements.
- Understand the travel management company’s ownership structure, board membership and board level decision-making authority. Given the frequency of industry acquisitions, understand how your business would fit into a travel management company’s portfolio in the event it is purchased by another agency. There is leverage for travel management company clients to enhance commercial and service level terms.
- Ask buyers who have similar budgets and/or are from the same industry about their experiences with the bidders. Speak with the agency representatives before the RFP is issued and the process is underway.
- Determine which travel management companies best support the use of technology, possibly including:
- Online self booking tools
- Automated expense reporting
- Pre- and post-trip reporting
- Traveler tracking and other risk management tools
- Payment system integration
- Tracking/refunding unused tickets
- Custom portals with profiles, policy, security and destination information.
- Mobile applications for travel
- Systems for measuring CO2 emissions and off sets
- Tools for non-GDS content access
- Consider the travel management company’s role in account management, including negotiation services, policy consultation, process innovation, e-commerce integration and meetings and incentive management, and any related fees.
Contact Teplis Travel for more information or to schedule a no-hassle consultation for help with your next formal travel management RFP.