PROCUREMENT
Finance, Supply Chain, Sourcing
“The supply chain stuff is really tricky.”
Elon Musk
CEO of Tesla and SpaceX
GOAL
To obtain the right service at the right price.
Procurement's overarching goal as it relates to any department throughout the organization is to increase the value of services, experiences, and products provided by vendors and partners.
1. Success of the program, holistically.
As a travel manager, it can be easy to get caught up in the day to day operation, or focus more on the big "headliner" contracts like air and TMC. From a procurement standpoint, it goes back to the overall goal - finding the right service at the right price. Smaller components to a travel program can not be overlooked simply because they are comprised of a small percentage of spend. If a component of the program is not successful because it is not the right service, then the program will appear to lack a holistic approach.
2. Application of a disciplined and ethical approach
One perspective that a procurement professional brings to any negotiation is the assurance of a ethical approach to ensure a fair bidding process. An example of this is to ensure that all vendors involved are given the same information throughout a bidding process. Procurement professional are also aware that they are not the subject matter expert and will never intend to be. Alternatively, the discipline of running a fair RFP or negotiation in order to reach the best evaluations possible is a strong motivator for the procurement professional.
3. Creating a best in class travel program
This can go hand in hand with the success of the holistic program but with a key focus being their bench marking placement of peer programs. This is a key indicator to a procurement professional to assess whether they have been able to utilize the forces of competitive market places, as well as knowing when the right time is to renegotiate an existing contract.
MOTIVATIONS & KPIs
SELLING STRATEGY
Value | Finding the right balace
A common vain that is shared by a procurement and travel manager is finding the best value for your program. Finding the equilibrium between negotiating the best price, without compromising service is the cornerstone to any great travel program and your procurement professional understand this. This will also help you navigate inevitable scrutiny when your corporation decides to look into scale backs.
​
Know Your Product | Be the Subject Matter Expert
When a travel manager finds themselves in the position to build a travel program with their procurement professional it is important to remember that each party brings their unique expertise to the conversation. Procurement can help you understand markets, overall trends, and RFP strategy, but the travel manager will always remain the Subject Matter Expert for travel specifics which is vital to building comprehensive and strategic contracts. It is also important to understand how to marry the economic perspective and the value of being a subject matter expert.
Partnerships | Leveraging Relationships
The travel industry is a very small world and the importance of personal relationships can not be overstated. Procurement offers a degree of separation from what can sometimes become a personal connection and can better manage the discipline required when managing the ongoing performance of travel partners. On the other side of this connection, the Travel Manager will always remain the holder of key relationships that can be leveraged for waivers and favors and staying connected to important travel partners.
TESTIMONIALS
Stephen Schwarzman, Chairman & CEO - Blackstone
"Inaccurate analysis produces faulty insights and bad decisions - which lead to losing a tremendous amount of money."
TRAVELER
The prices that the travel manager and the procurement manager negotiate on behalf of the firm ultimately trickle down to the traveler and how it affects their own budgets. Also, keeping in mind the cornerstone concept of main procurement goal - to obtain the right service at the right price - will influence how employees travel and ensuring a minimal amount of friction for road warriors by obtaining the correct service for their company's culture.