A case study on ProKonsul's lifecycle optimization approach as a business travel consultant
This case study represents the details of a project that ProKonsul delivered as a business travel consultant to one of the Big 4 consulting firms in India. To maintain customer confidentiality, we will refer to the client in the article as John Doe India (JDI).
John Doe India is the India arm of one of the largest consulting firms globally. They operate from 8 locations in India. Total employee strength of 12000 employees directed by 400+ partners.
The India travel program generates over US$ 50 Million in air, hotel and car spend with the operations being managed by incumbent 2 travel management companies (TMC’s) One of the incumbents is the India arm of a global TMC major while the other is a major Indian TMC. The program generates 100000 air transactions annually and an additional 25000 hotel room nights. They have a global hotel program which is booked centrally on their intranet.
JDI has its internal team of over 8 employees who would manage their travel and BT MICE operations supported by the two TMC’s who have 14 resources implanted within the various offices nationally. The 2 TMC’s have a common Self Booking Tool application that had been deployed. Adoption was limited to less than 10%. The predominant booking mode was “ call to the book “ or “email to the book”
JDI and their project leadership, lead by their India COO and CFO commissioned ProKonsul, as their business travel consultant. The initial objectives were
- Analyze & present a gap analysis of their India business travel program
- Recommend steps to bring it in line with best practice.
JDI leadership had a general unease with the current TMC’s support, technology & financial processes relating to business travel. The operations were largely legacy with limited technology usage.
They were also challenged by the absence of strong data and insights into their program, with lots of gaps in the TMC reporting. Data was not adequately consolidated across national locations. Further, the two incumbent TMC’s followed different reporting protocols.
Step One - Program & Process Analytics™ by ProKonsul
ProKonsul initiated the mandate by conducting its tested Program & Process Analytics™ (PPA). This involved an evaluation of JDI’s India business travel program across 16 program & process parameters.
The resultant report presented by ProKonsul gave JDI’s leadership with a 360° assessment of their national business travel.
The PPA presented JDI with
- Program maturity modelling v/s industry & global best practice
- Identified what was “right” and “what could be better”
- Benchmarked all program parameters v/s industry baselines
- Identified specific recommendations and action plans to improve program ROI
Primary findings from the PPA were
- Major gaps in 12 of the 16 parameters assessed from the standpoint of program maturity
- Direct financial saving opportunity of 6%
- Extremely high cancellation charges on account of improper supplier contracts & questionable TMC operational practices.
- Need for immediate change in the incumbent Self Booking Tool (SBT ) platform
- Need to conduct RFP for the introduction of single TMC with stronger SLA & commercial terms
- Complete review of the airline & domestic hotel program.
- A total absence of the Duty of Care program despite subscribing to a global Travel Risk & Security agency
JDI was given the option to take the PPA report conclusions & implement the changes recommended directly. JDI declined that approach as they felt their teams lacked adequate industry expertise. JDI appointed ProKonsul as their business travel consultant for the project. ProKonsul was asked to lead their various teams & determine the best solution fit.
Step Two - Business travel lifecycle optimization by ProKonsul
A. 5-year business travel strategy defined
ProKonsul commenced the project with an initial definition of the 5-year Business Travel Strategy for JDI. This required multiple sessions with JDI leadership. The objective was to ensure direction & continuity in the corporate mandate for the medium term. This was the first time JDI leadership had spent any time on their business travel strategy!
B. Travel Policy refined & aligned to strategy
The second step was to reset the travel policy to align policy parameter's with the overall strategy. As with many corporations, the travel policy had actually never been truly reviewed and optimized. This brought up several uncomfortable truths that JDI leadership was confronted with. This generated a lot of discussion on corporate ideology, financial & business objectives, the safety of travelers & employee satisfaction.
The primary objective of the exercise was to ensure that the policy translated the corporate strategy into reality.
C. RFI & RFP for TMC & SBT solutions
One of the most shocking things that came out in the Program & Process Analytics™ (PPA) was that JDI had an extremely poor contract framework with their existing TMC’s. The contracts were essentially a single page MOU with service charges listed. None of the due diligence clauses that were required to protect JDI’s interest from a commercial/legal standpoint, were mentioned.
As an immediate action, addendums were executed to plug these gaps, in the interim, while the RFP was concluded.
All Self Booking Tool (SBT ) solutions that currently available in India, were invited for the RFI. ProKonsul developed a 30 point RFI document to evaluate all Self Booking Tool (SBT ) providers from different technical and operational factors.
Consequent to the RFI & the review with JDI leadership, a shortlist of Self Booking Tool (SBT ) providers who had relevant capabilities was drawn. Concurrently an RFI & RFP project was initiated for the travel management company (TMC) selection.
These finalists were called for detailed presentations with JDI’s operational leadership and finally asked to submit an RFP response. The RFP was scored on commercial & technical parameters.
A new TMC and SBT partner was identified in consultation with the JDI. A structured contract & SLA framework was built with financial penalties for shortfalls in program delivery. Incentives were also built in to ensure that the business partners were rewarded for enhanced service levels. An operational process document was built to prevent abuse, in view of current malpractices that had been identified.
Most importantly, the contract structure was revised to ensure adequate operational, financial and legal governance to protect JDI’s long term interests and business continuity program(BCP).
D. Very high cancellation charges - Operational abuse by incumbent TMC’s
JDI experienced extremely high % of cancellations and related charges. Annually, this approximated to over $350,000 in cancellation penalties alone. Far higher than the industry average in India.
This reflected two major challenges
- Airline contracts had been structured sub-optimally.
- Incumbent TMC’s tended to avoid using the designated corporate rate program. They preferred to use non negotiated market rates. When probed the incumbent TMC’s indicated that they chose the market rates based on the fact that it was lower. However, when canceled, there were severe penalties for such fares. This was a clear area of concern with incumbent TMC’s integrity of operations. It seemed apparent that the TMC’s were using market rates to secure direct incentives from airlines based on productivity linked bonuses.
As an aside, ProKonsul found multiple instances of creative ticketing, incorrect management of refunds/credits & billing integrity concerns with both TMC's.
Much of this was perpetuated due to ineffective SBT implementation and faulty payment systems for TMC settlement. This resulted in a separate project to conduct a full-scale business travel audit of both TMC’s. This will be covered in a separate case study.
E. Consolidation & review of all airline contracts
All airline contracts - domestic & international, were reviewed and re-contracted.
One clear principle followed was selecting airline networks that addressed then primary travel destinations and service requirements of JDI. Contracts were simplified and fewer fare levels were selected so administration/ control was more effective.
The further process was set up to prevent any leakage in case of preferred fare with a unique process implemented to aggregate all national ticketing on preferred airlines. Quarterly reports & review meeting was built into the contract to ensure that program goals were met.
F. Domestic hotel program reconstructed
The domestic hotel program originally had over 500 hotels. JDI’s travel team believed that if they had all possible hotels in their program, they would secure every possible benefit ..... obviously an erroneous assumption !!
When ProKonsul started the review, almost every hotel came back stating that JDI never delivered the committed volumes. There was tremendous leakage in the program. Importantly hotel reservations were not routed exclusively through the official TMC's. A lot was booked directly by the traveler or their assistants. Since so many multiple channels were used m, hotels were not reporting any data to JDI travel
As a business travel consultant, ProKonsul approached this problem differently. We initiated a chain-wide consolidation so fewer chains that offered multi-segment inventory were shortlisted. Further, the number of hotels in the program was slashed from over 500 to only 160 hotels nationally.
Again a common RFP document with pricing required for a standard set of inclusions was built. This resulted in the standardization of the rate program. Rate audits post the RFP award was done to ensure that the correct rates were loaded and bookable through the SBT & TMC operations. Direct hotel bookings were strongly discouraged through travel policy directives.
G. Duty of Care integration
Though JDI’s global operations were subscribing to a global travel risk & traveler tracking solution, the program had never been implemented in India.
A few partners had been issued with program access cards but no one really knew how to use the program. The TMC’s did not integrate ticketing reservations into the global duty of care tool.
This required multiple discussions with the global travel team of JDI as also their duty of care partner. As a second step, the incumbent TMC’s were provided with an orientation on processes to consolidate all ticketing data to the global duty of care partner.
From an almost nil tracking, within 4 months JDI had 100% tracking of air ticketing nationally on the duty of care platform.
Summary of results delivered by ProKonsul
The overall project lasted for 7 months. As JDI's business travel consultant, ProKonsul delivered the following results
- 16 step Program & Process Analytics™ that identified a 6% direct saving opportunity
- Stopped operational abuse of the business travel program by the incumbent TMC's
- Conducted the RFP resulting in the appointment of a new Self Booking Tool (SBT) & a single national travel management company (TMC).
- Reconstructed their domestic hotel program. Brought down preferred hotels from 500 to 160.
- Reconstructed their airline preferred partner's
- Implemented 100% integration of all air transactions into the global travel risk & traveler tracking system
- Delivered an actual financial saving of 9.8% YOY v/s the initial estimate 6% direct saving.
This case study illustrates ProKonsul’s approach as a business travel consultant
Want to set up your 30-minute FREE consultation with a ProKonsul business travel expert?
Drop us an email firstname.lastname@example.org or call +91-9873196115.
We would love to work with you! Call us now !!
ProKonsul ® optimizes the business travel lifecycle of its clients. It delivers domain expertise in enterprise business travel. Established in 2014, we are the pre-eminent business travel consultant in India, Asia & emerging markets. We are located in Gurgaon, India. ProKonsul ® advisory services are supplier agnostic & governed by a robust integrity policy.
2019 © ProKonsul - All Rights Reserved