Transcript
Page 1: Maverick Buying Webinar

Page 1 | Confidential

Wasted Money! Maverick Buying in Business Travel

Page 2: Maverick Buying Webinar

Page 2 | Confidential

Welcome!

Taryn McLaughlin Corporate Sales Manager Egencia UK • Strategic expertise within the SME and Key client

space • Egencia President’s club winner based on 2013

sales performance • Over 7 years in the corporate market working for

various Blue Chip companies.

Warwick Brown Manager – Corporate Account Management Egencia UK • Supporting strategic accounts • Managing a team of Large Account managers • 25 years of experience in the travel industry

Speakers:

Page 3: Maverick Buying Webinar

Page 3 | Confidential

Contents

• What is Maverick Buying? - Definition - Maverick Buying in Business Travel

• The disadvantages of Maverick Buying: - For the travelling persons - For the company

• How can Maverick Buying be eliminated: - Tips - How Live Nation reached 95% of online adoption

• Why you shouldn’t favour other methods of booking

?

?

?

?

Page 4: Maverick Buying Webinar

Page 4 | Confidential

Definition: Maverick Buying

Maverick Buying or wild purchase is a term used in procurement management. One talks about Maverick Buying when a department buys materials or services without authorisation and without involving the purchasing department. Maverick Buying is the process whereby employees “buy items or services that are outside the preferred process or system”* within a company.

“Sourcing of Services”.; Bals, Lydia & Evi Hartmann. Nova Science Publisher, 2008, New York.

Page 5: Maverick Buying Webinar

Page 5 | Confidential

Company employees look for travel services at different travel service

providers independently

They then go on to book via external channels

The means of payment used are often not permitted by the

company travel policy

Travel preparation

Travel execution Travel account

Controlling

They submit their third-party bills for travel expenses to the

accounting department

Page 6: Maverick Buying Webinar

Page 6 | Confidential

Time and productivity loss No support with booking questions

Lack of travel certainty

- Spend long time on researching travel prices

- Manual comparison of travel policy restrictions

- Use their own means of payment

- Prolonged approval process

- No customer service support

- Limited access to the correct contact person

- Lack of support when questions arise

- No support in emergency situations – no access to Traveller Tracking

- No personal travel news updates

Disadvantages: For Travellers

Page 7: Maverick Buying Webinar

Page 7 | Confidential

No Control Less savings Reduced duty of care

Lack of reporting Billing issues

- No monitoring of travel policy

- Automated approval process does not apply

- Unmanageable approval process

- No cost savings available from negotiated supplier contracts

- Loss of productivity of travellers and travel booker

- No overview of where travellers are in case of an emergency

- No/minimal assistance from operator in the event of an emergency

- No travel updates

- No centralised reports of all travel expenses

- Individual costs for different departments and travellers difficult to report on

- No reporting across several countries possible

- Invoices from different vendors in the accounting process

- Manual summary of all travel spending

- Lengthy process if invoices are lost

Disadvantages: For Travel Director

Page 8: Maverick Buying Webinar

Page 8 | Confidential

Disadvantages of Maverick Buying: A Summary

SAVINGS

SERVICE

SECURITY

- Direct Costs: TMCs have direct access to airline fares. The only potential cost benefit of Maverick Buying is, under certain circumstances, only relating to transaction fees.

- Indirect Costs: Time to research best deals and book travel as well as potential cancellations/changes to their itinerary. Also time used as the billing department summarise expenses individually.

Services in TMCs play an important role for travellers and companies: - Customer advice and booking assistance by trained personnel, which is

based on the needs specific to each company - Localised support for employees and assistance in the case of an emergency - Clear preparation and presentation of figures in order to achieve

transparency and identification of further potential savings.

Safety in Travel Management has a number of aspects: - Support for our duty of care with security management tools - Service and best price guarantees - A personal Account Manager for assistance and advice for businesses - Full cost control with no chance of cost inflation.

Page 9: Maverick Buying Webinar

Page 9 | Confidential

Why avoid Maverick Buying?

By avoiding Maverick-Buying the companies surveyed said they made an estimate of 15% savings. It is thus clear that a substantial focus will be around the reduction of Maverick Buyting in the next 10 years. Managers expect a reduction of 24% to 17% of Maverick Buying in their companies. A stronger Procurment department, clear guidelines and policies as well as discipline in the organisation will help realise these saving potentials.

* Study: Trends in Procurement; Spring Procurement GmbH, www.springprocurement.com http://www.springprocurement.com/studiezukunfteinkauf.pdf

Page 10: Maverick Buying Webinar

Page 10 | Confidential

Page 11: Maverick Buying Webinar

Page 11 | Confidential

How can Maverick Buying be eliminated?

• Management team and Travel Management must agree on uniform procedure. • Actions for the elimination of Maverick Buying must be unanimously agreed.

Agreement

• The travel policy must be clearly and precisely formulated. • Consequences of non-compliance must be explained in the travel policy (e.g. no reimbursement of travel

expenses). • Avoid a complex travel policy to make it easy to understand and follow • Define approval process for ‘special cases’. Travel Policy

• The controlling function is obtained, for example, through the accounts/finance department. • For a strict controlling of Maverick Buying, the expenses for business travel should be regularly compared

with the reporting by the TMC. • The approving persons may no longer approve business travel outside the prescribed booking channel. Travel Policy

Controlling

Page 12: Maverick Buying Webinar

Page 12 | Confidential

• Non-compliance with the travel policy can result in no reimbursement of travel expenses or even a termination of employment warning.

Penalties

• An overview of all travel costs is indispensable for cost control and serves as a starting point for negotiations with the service providers.

• The travel behaviour should be checked for Maverick Buying as soon as a change in the travel cost structure is noticeable. Cost

Controlling

• The travel policy must be made accessible at all times to the travelling persons. • Regular communication in the form of newsletters ensures the travelling persons are aware of the

importance of the travel rules. • Clearly understandable arguments for why a consolidated travel management is important and should be

given to travelling persons. Communication

How can Maverick Buying be eliminated?

Page 13: Maverick Buying Webinar

Page 13 | Confidential

How Egencia can help…

Communication with the management team

Clear formulation of your travel policy

Individual approval processes

Engagement from the very onset with management team and travel director is key to agree ensure all parties are on the same page. As your travel objectives change, Egencia can help communicate this to travellers.

We support and advise you on your requirements when finalising your travel policy. We can also point out how you can reduce cost through an effective travel policy with the help of our Consulting team .

In order to meet all your requirements, we can set up several types of approval processes for you. Together we will determine which process will work for you best.

Page 14: Maverick Buying Webinar

Page 14 | Confidential

Sanctions Yes or No?

The enforcement of sanctions is handled differently in each company. At Egencia, we primarily support the enforcement of travel policy through clever policy tools.

Detailed reporting with

one click

Travel managers can access detailed reporting at the press of a button and view the booking behaviour in the company. Egencia helps you keep track of your travellers. We will gladly give you a detailed training on our reporting functions.

Communication templates

Communication is our strength. We offer a number of possibilities to help you communicate with you travellers and bookers. Here are just a few: • Online newsletters for traveller • Templates for your email

communication or Intranet • Messages for your traveller on the

booking tool • Infoflash Banner

How Egencia can help…

Page 15: Maverick Buying Webinar

Page 15 | Confidential

Case study: Live Nation

About Live Nation • The world’s leading live entertainment and ecommerce company

The Challenge • No TMC support with their Travel Programme

The Solution • In-depth reporting to enforce travel policy compliance and control and reduce costs

• Technology to increase savings and satisfy young travellers’ expectation of an easy-to-use

online booking tool: 95% online adoption rate in the first year

Page 16: Maverick Buying Webinar

Page 16 | Confidential

Why you shouldn’t favour other booking channels

TMCs have a direct interface to the airlines and can therefore access their prices. It‘s the airlines that determine the fares, not the travel agencies. Egencia offers in some cases more attractive prices than the competition because we can negotiate better terms through our global purchasing power and as part of Expedia Inc.

Very often services are not correctly compared when looking for lower fares with other providers: • Is it really the same flight time, route and fare class, which is cheaper? • Is the supposedly cheaper price actually or only in the cache available? • Was the query only carried out until the end (shortly before booking completion)?

In addition, all incidental costs need to be taken into account when comparing prices. This is often not the case if you do not complete the booking. Often, credit cards and other ticket fees are shown in the last steps.

Page 17: Maverick Buying Webinar

Page 17 | Confidential

Recap

Define a clear Travel Policy

Control your Travel Policy through reports

Reach an agreement between the Management and Travel Management Team

Discuss penalties and see if they work for your travellers

Control costs as soon as you make changes to your policy

Communicate regularly with your travellers

Page 18: Maverick Buying Webinar

Page 18 | Confidential

Thank you for listening!

Any questions? Taryn McLaughlin [email protected] +44 (0) 77557268411


Top Related