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  • Page 1 | Confidential

    Wasted Money! Maverick Buying in Business Travel

  • Page 2 | Confidential

    Welcome!

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

    space Egencia Presidents 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 | 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 shouldnt favour other methods of booking

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  • 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 | 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 | 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 | 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 | 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 | 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

    http://www.springprocurement.com/

  • Page 10 | Confidential

  • 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 | 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 | 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 | 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 | Confidential

    Case study: Live Nation

    About Live Nation The worlds 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 | Confidential

    Why you shouldnt favour other booking channels

    TMCs have a direct interface to the airlines and can therefore access their prices. Its the airlines that determine the fares, not the