Stages of travel management excellence
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TRAVEL ANALYTICS INC. Stages of Travel Management Excellence. Industry Scores and Future Goals. Presented by Scott Gillespie, CEO. Scott Gillespie’s Background. Founder of Travel Analytics Developed TANGO™ and BRAVO™ for negotiating and managing airline supplier contracts

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Stages of travel management excellence

TRAVEL

ANALYTICS

INC

Stages of Travel Management Excellence

Industry Scores and Future Goals

Presented by

Scott Gillespie, CEO


Scott gillespie s background

Scott Gillespie’s Background

  • Founder of Travel Analytics

    • Developed TANGO™ and BRAVO™ for negotiating and managing airline supplier contracts

    • Analyzed in excess of $10 Billion of annual air spend

    • Recipient of ACTE’s Industry Professionalism and Distinguished Fellow honors

    • Named by Business Travel News as one of the travel industry’s most influential executives

  • Previously A.T. Kearney’s expert in strategic sourcing of travel suppliers

  • MBA, University of Chicago

    • Concentration in Statistics


Some past and current clients teachers

Some Past and Current Clients/Teachers

  • Hewlett-Packard

  • Hoffmann La Roche

  • Invensys

  • International Monetary Fund

  • Lockheed Martin

  • Microsoft

  • Lucent Technologies

  • Procter & Gamble

  • Nortel Networks

  • PricewaterhouseCoopers

  • Saint-Gobain

  • US Bank

  • AXA

  • Baxter

  • Capital One

  • Coca-Cola

  • Chevron

  • Compaq

  • DaimlerChrysler

  • Dell Computer

  • John Deere

  • Ernst & Young

  • ExxonMobil

  • Ford


Today s agenda

Today’s Agenda

  • Framework, Methods, Limitations and Benefits

  • Who Participated and What Are Their Scores?

  • A Closer Look

  • The Road To Glory

  • What’s Working, What’s Not?

  • Where Are We Headed?

  • Is Bigger Better?

  • What’s Needed?

  • Individual Reports

  • Appendix


Some appetizers

Some Appetizers:

  • Only 6% of firms rate their programs currently as Stage 4 (the best)

  • 98% of firms want to be either Stage 3 or Stage 4

  • The highest-scoring dimension? Senior Management

  • The lowest-scoring dimension? Groups & Meetings

  • The two most important dimensions are Senior Management and Travel Policy – True or False?

Stay Tuned!


Stages of travel management excellence

Framework, Methods, Limitations and Benefits


What is the stages of travel management excellence framework

Stage 4

Stage 3

Stage 2

Stage 1

What is the Stages of Travel Management Excellence Framework?

A set of dimensions

and criteria with

prescriptive power

World class

program;

Great support,

Excellent

results

Advanced travel

program;

good support

Basic travel

program;

limited support

No real travel

program; mostly

fighting

fires


Method for conducting the study

Method for Conducting the Study

  • ACTE and Travel Analytics solicited a wide variety of participants

    • Drawn from the ACTE Global membership base

    • Drawn from Non-ACTE travel and procurement managers

  • All surveys were self-scored – no 3rd party validation

  • Data coded and analyzed by Travel Analytics

  • 63 Elements assigned to 14 Dimensions, in turn assigned to 4 Quadrants

    • Each Quadrant given equal weight

    • Each Dimension given equal weight within its Quadrant

    • Each Element given equal weight within its Dimension

  • Each respondent given equal weight; i.e, not weighted by air spend


14 major dimensions

14 Major Dimensions

  • Senior Management

  • Suppliers

  • Transient Management

  • Travelers

  • Travel Organization

  • Travel Policy

  • Travel Strategy

  • Controls

  • Data

  • Demand Management

  • Feedback

  • Goals

  • Groups and Meetings

  • Procurement


Each dimension broken down into 63 elements

Each Dimension Broken Down Into 63 Elements


Dimensions and elements cont d

Dimensions and Elements, Cont’d.

(Deleted)

Definitions were not provided


Two levels of analysis

3

3

3

3

1

1

1

1

2

2

2

2

4

4

4

4

Two Levels of Analysis

Better

Stage 1

Stage 4

Dimensions:

Feedback

Criteria

Little or none sought

Clearly drives future actions

Obtained irregularly

Obtained regularly

Elements:

Current Score

&

Goal Score

Traveler Satisfaction

Travel Policy Compliance

Average Feedback Score: 2.0


The study focused on 3 measures

3. Gap to Goal

The Study Focused on 3 Measures

2nd Most Important

Least Important

Overall Industry Scores

2. Goal Score

(Where Are We Headed)

4.0

3.5

3.0

SOE Score

2.5

Most Important

2.0

1. Current Score

(What’s Working,

What’s Not)

1.5

Current Score

Goal Score

Scores are reported from the group’s Mean Average score


Some limitations and benefits of this study

Some Limitations and Benefits Of This Study

Limitations:

  • First application of Stages Of Excellence

  • Scores were not validated

  • Not a random sampling of the industry

    Benefits:

  • Broad and neutral scoring mechanism

  • Provides a common lens for assessing travel programs

  • Facilitates frank discussions and goal-setting


Stages of travel management excellence

Who Participated and What Are Their Scores?


Partial participant list

Partial Participant List

Eli Lilly

Ericsson

Ernst & Young

FedEx

Franklin Templeton

Ingersoll-Rand

Inter IKEA

KPMG

Lucent

Microsoft

Nike

Novo Nordisk

ON Semiconductor

Oracle

Parker Hannifin

Pharmacia

Praxair

Procter & Gamble

Schlumberger

Seagate Technology

SICPA Group

Solvay

Swift

UCLA

United Technologies

US Bank

Washington Mutual

Xerox

ABB

Agilent Technologies

Allied Domecq

AMS

Applera

Avaya

Baxter

Bertelsman

BP

Canadian Pacific

Chiron

Coca-Cola Enterprises

ConAgra

Deloitte & Touche

84 participants with $4.5 Billion in annual air spend


Key demographics of participants

Region from which the majority of travel originates

2002 Annual Air Spend

Small is < $15MM

Medium is $15MM to less than $50MM

Large is $50MM or more

Travel Operations and Management, including Procurement

Travel Procurement

Procurement of Travel and other categories

Other

Key Demographics of Participants

Sample Size = 84 Participants


How did we score

How Did We Score?

  • Very close to the 2.5 mid-point for Overall Current Score

  • Most firms aspire to one full higher stage of excellence


Are we different by spend

Are We Different by Spend?

  • At first glance, no obvious difference based on program size

  • More Large programs did better; Medium programs have higher goals


Are we different by region

Are We Different by Region?

  • “Split” programs appear strongest, but…

Non-North American sample sizes are too small to be meaningful


Stages of travel management excellence

A Closer Look


The study drew a broad sample

The Study Drew a Broad Sample

  • Fairly well-balanced distribution

  • Indicates the scales, criteria and sample are reasonable

Scale’s Mid-Point


Who s best in class

Who’s Best In Class?

  • The top 25% of all respondents based on Current Scores were assigned as Group A; the other 75% were assigned as Group B

  • Group A’s average size = $71MM; half are larger than $35MM

  • Group B’s average size = $51MM, half are larger than $21MM


Stages of travel management excellence

The Road To Glory


How do b programs get to be a programs

Stage 4

Stage 3

Stage 2

Stage 1

How Do “B” Programs Get To Be “A” Programs?

World class

program;

Great support,

Excellent

results

By taking a series of prioritized

and often difficult steps

Advanced travel

program;

good support

Basic travel

program;

limited support

No real travel

program; mostly

fighting

fires


Let s look at what we can control

…And What’s Most Critical

Let’s Look At What We Can Control…

Moderate

High

Low

Travel Manager’s Degree of Control Over the 14 Dimensions

Suppliers

Demand Management

Groups / Meetings

Senior Management

Transient Mgmt.

Data

Travelers

Travel Strategy

Feedback

Controls

Travel Organization

Travel Policy

Procurement

Goals


Why are these big six the most critical

Why Are These “Big Six” The Most Critical?

  • Senior Management

    • Clearly necessary, but not sufficient

  • Travel Policy

    • Critical for controlling traveler behavior

  • Transient Management

    • The heart of delivering a managed travel program

  • Procurement

    • Smart sourcing means big savings

  • Data

    • The building blocks of business decisions

  • Travel Organization

    • Good programs are built by good people


Why are these dimensions not as critical

Why Are These Dimensions Not As Critical?

  • Suppliers

    • Selected by the travel organization

  • Travelers and Travel Strategy

    • Good scores are more the result of a good program, rather than the cause

  • Control, Goals and Feedback

    • A function of the travel organization

  • Demand Management and Groups/Meetings

    • Often not in scope of Travel’s responsibility

Important Dimensions, Yes – but Not on the Critical Path


Are any of the big 6 more critical than others

Necessary Dimensions

Travel Org., Data

Senior Mgmt., Feedback, Travel Org., Data

Suppliers, Control, Travel Org., Data

Data, Feedback

Suppliers, Travel Org.

Senior Mgmt. - Maybe

Are Any of the “Big 6” More Critical Than Others?

(Understands and Owns Travel, Level of Support)

  • Senior Management

  • Travel Policy

  • Transient Management

  • Procurement

  • Data

  • Travel Organization


Stages of travel management excellence

What’s Working, What’s Not

Current Score Analysis

Group A vs. Group B


Both groups emphasize senior mgmt procurement transient management policy

Senior Mgmt.

Senior Mgmt.

Procurement

Transient Mgmt.

Transient Mgmt.

Travel Policy

Travel Org.

Travel Policy

Procurement

Travel Org.

Data

Data

Moderate Control

Low Control

High Control

Both Groups Emphasize Senior Mgmt., Procurement , Transient Management & Policy


Group a has done much better on the big six dimensions

Senior Mgmt.

Senior Mgmt.

Procurement

Transient Mgmt.

Transient Mgmt.

Travel Policy

Travel Org.

Travel Policy

Procurement

Travel Org.

Data

Data

Moderate Control

Low Control

High Control

Group A Has Done Much Better on the “Big Six” Dimensions

A’s avg.= 3.4

B’s avg.= 2.5


Group a does much better on 2 key dimensions than group b travel organization and data

Senior Mgmt.

Procurement

Transient Mgmt.

Transient Mgmt.

Travel Policy

Travel Org.

Travel Policy

Procurement

Travel Org.

Moderate Control

Low Control

High Control

Group A Does Much Better On 2 Key Dimensions Than Group B – Travel Organization and Data

Senior Mgmt.

Data

Data


What s holding group b back

Data

Travel Organization

What’s Holding Group B Back?

Recruiting, Career Advancement, Execution

Hotel, Agency and Other Data; Unconsolidated Spend


What s working what s not summary

What’s Working, What’s Not - Summary

  • Six critical dimensions:

    • Senior Mgmt., Transient Mgmt., Travel Policy, Procurement, Data and Travel Organization

  • Group A programs have strong scores on all six critical dimensions

    • Of the six, Data is scored the lowest at 3.2

  • Group B does fairly well at Senior Mgmt., Procurement, Transient Mgmt. And Travel Policy

  • Groups/Meetings and Demand Mgmt. are well below average at most firms

  • Group B scores below average on Travel Organization and Data – The two most critical dimensions


Stages of travel management excellence

Where Are We Headed?

(Goal Analysis)


Both groups have similar relative priorities

Senior Mgmt.

Senior Mgmt.

Transient Mgmt.

Transient Mgmt.

Data

Travel Policy

Travel Policy

Data

Travel Org.

Procurement

Procurement

Travel Org.

Moderate Control

Low Control

High Control

Both Groups Have Similar Relative Priorities


Improving supplier quality and pricing is a high priority groups and dem mgmt are not

Moderate Control

Low Control

High Control

Improving Supplier Quality and Pricing Is a High Priority; Groups and Dem. Mgmt. Are Not

Senior Mgmt.

Senior Mgmt.

Transient Mgmt.

Transient Mgmt.

Data

Travel Policy

Travel Policy

Data

Travel Org.

Procurement

Procurement

Travel Org.


Group a wants it all

Moderate Control

Low Control

High Control

Group A Wants It All

Senior Mgmt.

Transient Mgmt.

A’s avg.= 3.8

Travel Policy

Data

Travel Org.

Procurement


Group b wants a better steering wheel

Data

Goals

Feedback

Controls

Moderate Control

Low Control

High Control

Group B Wants a Better Steering Wheel

Senior Mgmt.

Transient Mgmt.

Data

Travel Policy

Procurement

Travel Org.


But why is travel organization near the bottom for group b

Senior Mgmt.

Transient Mgmt.

Travel Policy

Data

Travel Org.

Procurement

Moderate Control

Low Control

High Control

But Why Is Travel Organization Near the Bottom for Group B?

Senior Mgmt.

Transient Mgmt.

Data

Travel Policy

Procurement

Travel Org.


Where are we headed summary

Where Are We Headed - Summary

  • Both groups set high goals (3.5+) for Senior Mgmt., Transient Mgmt., Suppliers, Travel Policy and Data

  • Group B wants much stronger ability to control their programs

  • Both groups put Demand Mgmt. and Groups at or near the bottom

  • Group B puts less emphasis on Procurement and Travel Organization (3.4, 3.3)

    • Travel Organization is ranked the second-lowest goal

This looks like a self-imposed “Travel Ceiling”


Stages of travel management excellence

Is Bigger Better?


Having a large program does not mean strong scores on travel organization or data

Senior Mgmt.

Procurement

Procurement

Transient Mgmt.

Travel Org.

Senior Mgmt.

Transient Mgmt.

Travel Policy

Travel Policy

Travel Org.

Data

Data

Moderate Control

Low Control

High Control

Having a Large Program Does Not Mean Strong Scores on Travel Organization or Data


Medium programs show 1 stage difference

Senior Mgmt.

Transient Mgmt.

Procurement

Travel Policy

Travel Org.

Moderate Control

Low Control

High Control

Medium Programs Show 1-Stage Difference

Transient Mgmt.

Senior Mgmt.

Travel Policy

Procurement

Travel Org.

Data

Data


Small programs also show 1 stage difference

Small Programs Also Show 1-Stage Difference

Senior Mgmt.

Senior Mgmt.

Travel Policy

Transient Mgmt.

Procurement

Travel Policy

Data

Travel Org.

Procurement

Transient Mgmt.

Travel Org.

Data


Stages of travel management excellence

What’s Needed?


Better use of numbers and people

Better Use of Numbers and People

  • Deliver better data across the board

    • Airline O&D data should be an “on tap” commodity

    • Hotel folio data will drive better deals for everyone

  • Develop integrated systems for stronger control of data, travel policies, goals and feedback

    • More executive dashboards and balanced scorecards

    • Likely anchored at the point of sale

  • Eliminate the ‘Travel Ceiling” – real or perceived

  • Re-write the role and reputation of the travel manager


What role are we talking about

Key Management Challenges

What Role Are We Talking About?

The Travel Manager, or…

  • General Manager

  • President

  • COO or CEO

  • Mission-Critical Processes

  • Globalization

  • Operations

  • Cost Control / Bottom-line Impact

  • Supplier Management

  • Strategic Sourcing

  • Customer (Traveler) and Stakeholder Satisfaction

  • Change Management

  • Staff Development

  • Distribution Channels

  • Information and Internet Technology

Travel Management Is a Great Career Opportunity…

…But Not Without Risk

(Sales and Manufacturing)


Upgrading a travel program one full stage is a big challenge and therefore a risk

Upgrading a Travel Program One Full Stage Is a Big Challenge – and Therefore a Risk

  • Get the best resources

    • Especially Travel Organization and Data

  • Don’t accept budget constraints as an excuse

    • Most Dimensions can be improved at no significant cost

    • Build a solid business case for those that do

  • Set priorities carefully – you can’t do it all at once!

    • What’s really on the critical path?

    • From whom can you learn and leverage?


All set for take off

Where We Are Today

Where We Want to Be

Stage 1

Stage 2

Stage 3

Stage 4

All Set For Take-Off

With the Right Vision Our Industry Can Really Take Flight!


Stages of travel management excellence

Individual Reports


What does an individual report include

What Does an Individual Report Include?

  • Your responses are benchmarked against

    • The entire ACTE/Travel Analytics peer set

    • A peer set based on your spend

    • Overall Group A

    • Overall Group B

  • Covers Current Scores and Goals

    • For all 14 Dimensions

    • For all 63 Elements

  • Custom benchmark groups can be arranged

    • Need more European participants for Regional Benchmarking


How can you get an individual report

How Can You Get an Individual Report?

  • If you contributed a survey by April 18th:

    • You will want your individual report for Tuesday’s session

      • Interpreting Your Stages of Excellence Report

      • Tuesday, 4:15 to 5:30 pm in the _____ Room

    • Pick up your sealed report at the podium after this presentation, or leave a message for Scott Gillespie at the Cyber Cafe

  • If you contributed your survey between April 18-25th

    • Your report will be e-mailed to you next week at no cost

  • If you’d like to obtain an individual report:

    • $300 fee for current ACTE members and conference attendees

    • $600 for all others


Ordering an individual report

Ordering an Individual Report

To obtain an individual report,

1. Download the Stages of Excellence Scoring Tool from

www.travelanalytics.com/mainfree.htm

2. Submit the scored file by e-mail to

[email protected]

Your report will be e-mailed to you within 10 days


Discussion please

Discussion, Please!

  • What other conclusions can be drawn from this data?

  • What works well about this approach?

  • How can the Stages of Excellence framework be improved?

    • What’s missing?

    • What’s misunderstood?

    • What could be done better?


Stages of travel management excellence

Thank You!


Stages of travel management excellence

Appendix


Stages of travel management excellence

All Programs


What s working what s not

Stage 1 (0.5 – 1.4)

Stage 2 (1.5 – 2.4)

Stage 3 (2.5 – 3.4)

Stage 4 (3.5 – 4.5)

What’s Working, What’s Not


Top 10 elements current scores

Top 10 Elements, Current Scores

Group A, Overall

Group B, Overall


Bottom 10 elements current scores

Bottom 10 Elements, Current Scores

Group A, Overall

Group B, Overall


Tall goals small goals

Stage 1 (0.5 – 1.4)

Stage 2 (1.5 – 2.4)

Stage 3 (2.5 – 3.4)

Stage 4 (3.5 – 4.5)

Tall Goals, Small Goals


Top 10 elements goal scores

Top 10 Elements, Goal Scores

Group A, Overall

Group B, Overall


Bottom 10 elements goal scores

Bottom 10 Elements, Goal Scores

Group A, Overall

Group B, Overall


Big steps little steps

Big Steps, Little Steps

Top 4 Are The Same

All Within ½ a Stage


Stages of travel management excellence

Large Programs

Air Spend $50MM+


Big steps little steps large programs

Transient Mgmt.

Travel Org.

Travel Policy

Senior Mgmt.

Travel Policy

Transient Mgmt.

Travel Org.

Procurement

Senior Mgmt.

Procurement

Big Steps, Little Steps: Large Programs

Data

Data


Stages of travel management excellence

Medium Programs

Air Spend $15MM-50MM


What s working what s not1

Senior Mgmt.

Transient Mgmt.

Procurement

Travel Policy

Travel Org.

Moderate Control

Low Control

High Control

What’s Working, What’s Not

Transient Mgmt.

Senior Mgmt.

Medium Programs

Travel Policy

Procurement

Travel Org.

Data

Data


Tall goals small goals medium programs

Senior Mgmt.

Transient Mgmt.

Procurement

Travel Policy

Travel Org.

Moderate Control

Low Control

High Control

Tall Goals, Small Goals: Medium Programs

Transient Mgmt.

Senior Mgmt.

Data

Travel Policy

Medium Programs

Data

Procurement

Travel Org.


Big steps little steps medium programs

Travel Policy

Travel Org.

Travel Org.

Procurement

Travel Policy

Transient Mgmt.

Transient Mgmt.

Senior Mgmt.

Senior Mgmt.

Procurement

Big Steps, Little Steps: Medium Programs

Data

Data


Stages of travel management excellence

Small Programs

Air Spend Less Than $15MM


What s working what s not small programs

Moderate Control

Low Control

High Control

What’s Working, What’s Not: Small Programs

Senior Mgmt.

Senior Mgmt.

Travel Policy

Transient Mgmt.

Procurement

Travel Policy

Data

Travel Org.

Procurement

Transient Mgmt.

Travel Org.

Data


Tall goals small goals small programs

Senior Mgmt.

Senior Mgmt.

Transient Mgmt.

Travel Policy

Travel Policy

Transient Mgmt.

Procurement

Travel Org.

Travel Org.

Procurement

Moderate Control

Low Control

High Control

Tall Goals, Small Goals: Small Programs

Data

Data


Big steps little steps small programs

Transient Mgmt.

Senior Mgmt.

Travel Policy

Travel Org.

Procurement

Big Steps, Little Steps: Small Programs

Senior Mgmt.

Travel Policy

Transient Mgmt.

Travel Org.

Procurement


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