This case study focusses on a legal client that had a large global business travel and accommodation spend that wanted to ensure they were working with a ‘best in class supplier’ and obtaining value for money. The procurement process focussed on reviewing their travel policy, their booking processes to ensure they were optimised and their costs from both a travel management and hotel perspective with the introduction of a preferred hotel booking programme.
The client was a top 20 legal firm who wanted to challenge whether they were receiving optimum value from their significant travel and accommodation budget. From the outset, it became clear that there were two main travel management companies engaged to make bookings and in addition, there were a large number of bookings being made directly and then re-claimed through expenses. When we reviewed the travel policy it was clear that this was out of date and in any event not being applied consistently by; (1) either travel management company and (2) the employees.
Aside from the lack of a strategic relationship with their suppliers and a policy which needed to be reviewed a further problem was that the feedback from the travelers was that their booking experience had been inconsistent at best. Furthermore, the booking volumes with both incumbent travel management companies seemed to predominantly be phone based with little/no focus on challenging why technology hadn’t been introduced to streamline the process and potentially improve the travel bookers experience.
A comprehensive category review was required to conclude with a high performing travel and accommodation management provider being appointed.
- No category strategy
- Not receiving value for money
- Limited travel policy compliance
- Bookers experience inconsistent and generally poor
- Low awareness of location of travellers
As part of any review strategy Oculus have developed a 5-step process. The initial step in this process was to ‘initiate the review’ which included the agreement of the scope, the key stakeholders, the objectives of the review and the clarification of the key sponsor of the review. This information was captured in the form of a project charter.
Once agreed, we then focussed on an extensive research phase of the current processes, services, and costs. This involved an extensive element of data analysis and involved us taking the lead engaging with incumbent suppliers to understand their services, challenges, opportunities, booking data and associated costs of their service. At this point, we also conducted a booker survey to understand where the bookers believed improvements could be made, reviewed the client’s expenditure through expenses and took the time to read through any policy documents related to travel and accommodation.
Beyond the internal data we also researched the external travel management supplier market and engaged early in the process with the key suppliers to also facilitate a challenge of the clients current approach and at this point we asked potential suppliers to also make suggestions in terms of improvement measures with the focus on being to ensure we are receiving the highest service standards, with the best booker experience, at the most cost-effective rates whilst being compliant with a newly created policy.
Once the research phase was complete, we move to step 3 in the process which was to develop the strategy, completed in conjunction with key stakeholders, the incumbent providers and alternative providers. Essentially, we facilitated several internal and external meetings to really challenge our way of thinking. This approach was very well received by the client.
Once the strategy was agreed we embarked upon a rigorous and robust tender process which involved us engaging with 5 market-leading providers in addition to the incumbent suppliers. As part of this tender process, there was a clear specification of the client’s requirements and a very well-articulated tender strategy was agreed to allow the client to receive maximum benefit from the supplier engaged.
Upon receipt of the tender responses, a detailed category report was drafted by ourselves for the project team and sponsor which led to a short list being agreed and subsequent presentations being held which we facilitated to ensure the client had every opportunity to explore all key components of the supplier’s proposals. Ahead of the presentations we developed and pre-agreed with the client an evaluation criteria which was used by all presentation attendees to ensure we all consistently reviewed the key elements (e.g. company profile, service quality, risk and costs).
- Agree the project charter
- Undertake comprehensive internal research
- Research and engage the supplier market
- Clear tender specification & engage ‘best-in-class’ suppliers
- Clear and pre-agreed method of evaluation
Following a comprehensive tender process the category solution agreed with the client was to award a 2-year contract to a leading travel management provider. The solution transitioned the client away from using multi travel management companies to a single source solution who have the capability and capacity to deliver their global travel management programme.
Following the award, through the implementation period, all elements of the booking process were reviewed with the appointed supplier which resulted in significant process streamline benefits being derived in both the booking process and the invoicing process.
The policy was completely refreshed and right-sized in conjunction with ourselves and the newly appointed travel company and the client tightened up significantly on where expenses could be used for the purpose of travel and accommodation.
From a cost savings perspective the savings to the clients were in the region of 15% which were delivered through 3 key areas; (1) governance through policy control, (2) by streamlining internal processes and (3) cost savings by ensuring that accommodation was being booked in line with a preferred hotel programme and that the most cost-effective and relevant travel journey was being booked.
The objectives of the client were fully met and the client has realised significant benefits through the engagement with ourselves. However, there are still improvements which could be made as the account evolves which we have encouraged the client to consider at the appropriate time, an example of this being to consolidate the event management spend in the same contract where appropriate.
- Appoint a leading travel management company & consolidate the supply base
- Streamline internal processes
- Review the policy and limit spend through expenses
- Maximise cost savings
- Ensure the supplier can help with additional strategic initiatives
The client received several benefits and was particularly surprised by the value they received from the review. When they initiated the review, the client hadn’t appreciated how far away they were away from best practice management of this category and the review certainly re-focused their attention.
Aside from the significant benefits mentioned in the solutions section of the case study we also led the drafting of the supplier contract to ensure that all commitments made by the supplier were captured. This was a very well-articulated contracted which clearly and accurately stated the service specification requirements, the service level agreement, and the key performance indicators.
A key service benefit was the introduction of a highly committed and motivated account manager which led to a suite of reports being developed to assist the client in managing their spend comprehensively.
Whilst a 15% saving was identified it was also essential that the cost savings received were sustainable and with this in mind a fixed service cost proposal was agreed with the newly appointed supplier.
- Re-focussed client time and energy
- Contract drafted to capture full-service specification, service levels and KPI's
- Increased transparency through MI & pro-active account management
- Sustainable and significant cost savings