NBTA 2010 – Why Innovation Is Difficult In Corporate Travel

I attended the NBTA Convention in Houston last week. Frankly I have been to so many NBTA conventions, I have lost count (this was probably my 22nd or 23rd convention). What was shocking to me was how there was so little change in the content of the program from those I attended back in the early 1990s. Sessions on travel policy, expense management, globalization, vendor negotiations and meetings management represented the bulk of the content. There were a few progressive sessions on the social Web and mobile apps (the session I spoke at), but in general the lack of innovation and progressive thought was quite evident. Why is the corporate travel industry so stagnant? What does this mean to the state of corporate travel technology? It is my belief that a major culprit is turnover.  [more]

It is rare to find a travel manager in the same position for over four years. My guess is that there is a 65-70 percent turnover in travel managers over that period. Many of the folks who take over travel come from finance or procurement and once they complete their assignment move on to other roles in the corporation. In addition, those who have made a career as a travel manager often switch companies every 3-5 years. With this revolving door atmosphere, identifying the requirements of a customer can be challenging.

Over the last 15 years I have consulted with every major TMC and travel automation vendor in the corporate travel segment. Often the question arises on a product's features and functionality. This is a common scenario: as part of my engagement I'll suggest a function that is needed in the software and be told "our customers have not requested that feature." This is a major weakness of product marketing within the corporate travel technology space. How can you depend on your customers to define your product roadmap if their longevity in that position is limited to 3-4 years? For the non-travel industry professional it takes 1-2 years just to get up to speed with the industry terminology and market nuances.

This speaks to the issue of market needs versus customer needs. It is true that corporate software companies must listen to their customers, but a company in this space must also understand general market trends and pain points and anticipate customer needs. Those travel software companies that have emerged as leaders have consistently anticipated market needs and represent the true innovators in the corporate travel segment. Those companies who have waited for their customers to define their product have lost market share and struggle with new technological changes.

Here's an example. One issue I raised in the mobile session is whether, given the personal nature of the mobile platform, suppliers could use smartphones to circumvent corporate policy and market directly to the frequent traveler? Only about 20 percent of the audience thought this was a strong likelihood. As a consultant and analyst who works across the entire industry, often with suppliers, I know this is already happening. Then why is the average corporate travel manager blind to this phenomenon? Well, I guess if you are trying to learn the basics of corporate travel management profession, it is hard to keep up with changes in business practices triggered by technology. True innovation often comes from companies who are from other travel segments or outside the industry. With Google (via ITA) and Apple (via iTravel) set to dramatically change the industry, the corporate travel market may once again be blindsided by technologically driven market change.
Norm Rose president of Travel Tech Consulting and senior technology analyst with PhoCusWright. This post is republished, with permission and minor edits, from his blog, Travel Technology.