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7-Step Strategic Sourcing Process. Step 1 – Define Strategic Opportunity Step 2 – Baseline Current State Step 3 – Industry Analysis Step 4 – Go to market Strategy Development Step 5 – Selection and Negotiation Step 6 – Execute and Implement the Contract Step 7 – Monitor Results.

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7 step strategic sourcing process
7-Step Strategic Sourcing Process
  • Step 1 – Define Strategic Opportunity
  • Step 2 – Baseline Current State
  • Step 3 – Industry Analysis
  • Step 4 – Go to market Strategy Development
  • Step 5 – Selection and Negotiation
  • Step 6 – Execute and Implement the Contract
  • Step 7 – Monitor Results
global hotel strategy

A Case Study

Global Hotel Strategy
  • We outsource the process. We conduct hotel spend analysis using data from Agencies, major hotel chains, credit card and T&E systems.
  • Solicit preferred hotel preferences from administrators and top travelers in your key global markets that may not be captured in the data due to direct bookings
    • Understand your travel profile –
      • Why do you travel? What type of hotels are needed for the type of travel you have?
      • What ancillary items are in your hotel folio data that your travelers use and that are expensed?
  • Compile a list of all hotels used – Case study: 1400 hotels used and 980 hotels where we had spend in the previous year with over 100 room nights in the market. I combine meetings and events and corporate travel spend to be sure we leverage our contribution.
  • RFPs are sent and we narrow the selection. Case study: Narrowed to 410 hotels where we had substantial spend or the property was requested as a preferred by travelers or administrator.

Selection

and Negotiations

Execute and

Implement

Contract

global hotel strategy1

A Case Study

Global Hotel Strategy
  • We negotiate preferred properties based on the following:
    • Location – Near offices and customers
    • Cost competitiveness in the market including ancillary costs
      • Internet, breakfast, shuttle service, – cost identified in expense data
      • (Note: Don’t negotiate for items your travelers never use.)
    • Business Travel needs – Mix use 3 and 4 star properties, full service and limited service properties.
    • We subsidize with dynamic pricing in secondary markets
    • We do take commissionable rates when it is most cost effective
    • Feedback from travelers and arrangers

Selection

and Negotiations

Execute and

Implement

Contract

global hotel strategy2

A Case Study

Global Hotel Strategy
  • Each year we try to reduce number of properties.
  • In 2012 we identified the purpose of travel and solicited additional 3 star properties to fit the need. This reduced our Average weight hotel room night cost
  • Rates begin loading in the global preferred agencies online and offline systems for booking on December 1. (Hotels must load the rates). 2 formal audits are held through out the year to make sure the rates are loaded and used. We also do spot audits through out the year.
  • Estimated Global savings for 2013 is 13% below preferred rates in 2012 despite industry predictions of 5-9% increase.
  • What is keeping me up at night?
    • Loading additional special rates – Small meetings, government rates, project rates etc.
    • Multi-year deals with strategic properties
    • Consistent availability of my rate
    • Booking source on Hotel Room nights and security tracking

Selection

and Negotiations

Execute and

Implement

Contract