‘Procurement techniques save companies money'

Corporates see travel as a commodity 

Companies are increasingly acknowledging that procurement techniques make savings on their travel budget.

Huub Smeets, founder of Dutch consultancy Simacon, said procurement was now taking the leadership role in business travel management in nearly 50% of corporate.

Mr Smeets was speaking to about 100 delegates at the Association of Corporate Travel Executives (ACTE) executive forum in Amsterdam yesterday (April 28).

He said that 68% of companies had made savings of 5-15% through procurement techniques in 2008 while 80% expected to make savings of up to 20% this year.

Three quarters of corporates said procurement techniques had "tightened their travel budgets" while 50% now saw travel as a commodity.

"This is no longer a stigma. It is fast becoming a reality," he said.

 He told the meeting there was a "huge match" between the procurement and travel management approaches. The best practice was a combination which he called travel procurement, "representing the best of the two worlds."

"Procurement and travel management is now more than value management combined with relationship management.

"You need to know your company culture and your people. What works in the Netherlands might not work anywhere else.

"There is no such thing as one size fits all. You can have globalisation but it is always necessary to add a little bit of the local. That is the most successful approach," he said.

Mr Smeets said his view of travel procurement started with data.

"Why are the multi-nationals and suppliers struggling with this? Do you know what you need to know? Can you supply your leadership team with the data that drives strategic decisions for stakeholders?

"Can you determine the manageable and the measurable aspects of a trip? What data can you present? Is it local, regional, divisional, in the same currency?  

"Do you know what data is avail able in your company and what other data you can use from online tools, expense management systems?

"Data, data, data should be the immediate focus for a lot of companies. You need to have the maximum out of your system.

"You need to consult with both senior and line managers to ensure that your data is totally inline with what they want," he said.

Mr Smeets said that the recession was also an opportunity but companies must have travel policies "geared for the future" - if not they were in for a "miserable experience."

This involved creating close relationships not only with senior managers but also with key suppliers.

There should be clear guidelines on who is or is not allowed to buy or sing contracts, other departments, including finance, legal and HR should be involved.

But he warned companies not to take the opportunity during the recession to "squeeze" key suppliers.

"Companies should be willing to engage in a partnership to get the best long term results.

"Squeezing suppliers only helps short term but the long term is to talk about a partnership."

www.acte.org  www.simacon.biz