Jugaad For Commercial Travel RFPs

One of the more interesting sessions at the Association of Corporate Travel Executives' global conference last year was about "Jugaad," a process-oriented efficiency producer originating in small villages in India and now a worldwide application. The concept is less without more, emphasizing simplicity over complexity and producing faster bottom line results. It's a gutsy, provocative approach that achieves innovative results and cuts unneeded costs.

One recent, although controversial, example is Delta's purchase and operation of its own refinery. Since fuel is a major operating expense, cutting out of the middleman can assure supply without interruption and, over the long run, save fuel expense. Skeptics challenge the investment but it's bold and innovative.

Another example is investment companies betting on the outcome of large law suits, funding the litigation expense while producing major ROI if they are correct in estimating the outcome.

The commercial travel industry is dominated by costly and time-consuming processes that should yield to Jugaad. A prime opportunity for Jugaad is travel sourcing. The object of the RFP process is to produce competitive advantage through comparative evaluation. However, to the dismay of all the parties, most RFPs occupy hours for preparation and spreadsheet entries over basics that add little if anything to the evaluative exercise of significant differentials in capabilities.

RFPs can cost hundreds of thousands of dollars. Such cost and awkward complexity is inherent in repetitive questions and answers for very basic information which is non sensitive and not really confidential. Websites and calls to sales people can produce the same data that is coughed up during long RFPs that just add unnecessary costs, excessive burden and waste of time without significant competitive differentiation.

Pricing also is the subject of lots of confusion due to major differences in assumptions by both purchasers and bidders. They often talk past each other and end up with hours of more negotiations than should be the case if they understand each other better at the time of the RFP and submission/evaluation of pricing offers.

Jugaad Solutions For RFPs

Process efficiencies can be simplified by use of a common website, sponsored by suppliers and associations, to post non-sensitive non-controversial data that is always required but now in separate disparate RFPs. Operations can be funded and updates provided quarterly or more often. A code for access can be used to limit to legitimate purchasers.

Examples of web-supplied data could include:

1. Headquarters, office locations, key personnel, labor categories for full and part-time employees, experience levels, training, GDSs, HR policies and similar fundamental information obtainable from public sources

2. Litigation completed recently or pending

3. Key sales personnel by region or country, telephone contacts and emails

4. Management by category and hierarchies

5. Turnover rates and longevity of managers and operations staffs

6. Call centers

7. MI structure and reporting

8. Low-fare audits and results (agencies cite these anyway)

9. Categories of aircraft, seating and amenities for carriers (these are advertised)

10. Hotel capacities, new construction, car rental fleets and similar

11. Technology platforms

12. Online booking products and partners

13. Common pricing terms and possibly an industrywide spreadsheet with definitions that all can share

14. Numbers, sizes and categories of clients by geography and worldwide (names are withheld)

15. Gains and losses of clients during the last year or six months

16. Public financial data and documents like 10-Ks where available (where not available, this also is valuable for prospective buyers)

17. Purchases or mergers accomplished or planned soon

18. Numbers and locations of common hubs and gates per major airport; airport amenities like clubs and Wi-Fi where operated by the suppliers

19. Sales by category broken by region, country and overall global (this also is published yearly in the trades)

20. Website addresses for more information per supplier (brochures and other sales documents often weigh down typical bids today)

More can be added to the list. The point is, why take the time and absorb cost for parts of the selection process that can be streamlined? This should reduce or eliminate many pages of repetitive material now contained in huge-bound bidding books or packages. If Jugaad works for small villages in India, it should work for travel procurement. Doing more with less is overdue for travel supplier selections.

John Caldwell is an independent consultant.