We all know that procurement departments have taken over buying corporate travel, but are they getting it right? Are the methodologies used in commodity purchasing appropriate and is unit price the key consideration of the day? Do they have the power and recognition in their companies to drive through mandating, and consequently do they have the ability to deliver what they promise both internally and externally?
I accept that every company is different and you will find best practice everywhere, but I think the overwhelming answer to the above questions is no. If I am right, what can be done to improve this entirely unsatisfactory situation? Please bear with me dear reader and I will have a go at explaining my point and suggesting a direction ...
As the title of this post says, to me the issue is internal stakeholders and their reaction to what procurement buys more than the ability to cut a great deal with suppliers. I would venture to suggest that a company would be financially better off improving internal issues than trying to negotiate cheaper prices off a rather naïve and increasingly desperate and dwindling supplier base.
I think it should be almost mandatory for all procurement departments to have someone, preferably at a very senior level, with strong skills in communication, internal liaison, selling and change management. They would have to work across all levels to explain why what has been negotiated should be supported and mandated across the company.
Why should this be necessary in travel when it is not with other services? Simple: With travel procurement, one is buying something all-encompassing for the company, much of which is neither known nor cared about by stakeholders such as travellers and budget holders. For example, travellers are often being told to pay a transaction fee for what appears to be a more expensive flight when they could go on the web and apparently get it cheaper and for free. I don’t blame those that go direct if they know no better and they will probably be supported by their bosses who also don’t know the broader benefits of a travel programme.
So my point for this day is: Do you perhaps need to sort yourselves out within your own company, identifying what you really need, communicating it and gaining buy-in and commitment before going to market? In these high risk days of security concerns, potential corporate manslaughter and risk of airline failure, I would strongly recommend it. I am afraid you need to be salespeople as well as hard core buyers!