The Knowledge > Corporate case study
How to... PUT THE SQUEEZE ON SPEND
Travel manager Angela Smith managed to slash 28 per cent off her travel spend last year. Gillian Upton found out how she did it
Angela Smith TRAVEL MANAGER CARILLION PLC Angela has 12 years travel industry experience, the last six at Carillion, and has handled the merging of three travel programmes following the acquisition of Alfred McAlpine in 2008. She handles an annual UK travel spend of around £12million and is responsi- ble for supplier negotiation and travel policy. Angela is a member of ITM.
SUPPORT services company Carillion’s values are openness, collaboration, mutual dependency, professional delivery, sustainable profitable growth and innovation. Quite a list in fact. Not surprising then that some 18 months ago on its regular review of costs the company embarked on an internal company-wide campaign to reduce travel spend and improve efficiency. The task of meeting that goal on the £12million annual travel spend was met by Angela Smith, travel manager at Carillion. Smith is responsible for Carillion’s largely UK spend, spread across air, rail and hotels and including a small percentage of international flights, averaging ten a week. Rather than a self-booking tool, Carillion manages travel across its four business units with more human contact, utilising an implant with some 500 bookers. There is only a mandated bookers list in one business unit, and the company polices every request which falls outside policy to minimise non-compliant bookings. The travel policy is constant across all four business units. Read on to find out how Smith rose to this particular challenge and managed to save an impressive 28 per cent on travel last year.
Step 1 The first step was to look at
the travel policy and identify where it could be tightened up. Various ideas were gathered through brainstorming sessions held with its TMC, Omega. “We were involved fully,” says Omega’s Louise Fletcher, and the savings from each idea were looked at in great detail. Some ideas were discarded, such as changing the business class allocation from four hours to eight hours on International flights – this was not deemed a worthwhile exercise mainly due to the low number of International flights taken. Another idea was a pre-approval process for all travel. This too was rejected, deemed as a step too far. Instead, the focus was on approving
those trips which fall outside budget levels and on buying smarter. “As well as policy changes we looked closely at the suppliers we were using and looked to re-negotiate deals where possible,” explains Smith.
Step 2 The decision was made to begin the savings programme with tighter travel policy controls and this helped bring transaction numbers down by two per cent. Carillion had already come up with a list of scripted answers in order to support the TMC when employees raised questions about the changes. A communication was also sent to all employees outlining the changes and explaining why these were necessary. All senior managers who were able to approve travel were also contacted to explain the need for them to really understand the reason for travel on all requests. As well as the policy changes, weekly reporting and conference calls with senior management were also introduced. By reporting weekly the senior teams were able to keep on top of their spend and deal with non-compliant travel. Tele, web and videoconferencing are already massively encouraged within Carillion with many UK sites having access to videoconferencing. As employees were expected to reduce their travel to internal meetings these alternative meeting methods were promoted in each travel communi- cation. As a result, travel to internal meetings reduced from over 50 per cent to just 35 per cent. On the travel portal managed by Omega employees can see at a glance which sites have videonconferencing equipment.
Step 3 With hotels, Carillion
has a three-star only policy with a preferred list of suppliers but none of it was mandated.
Smith took the decision to mandate hotel policy and consolidated the list of suppliers too. However, if any traveller finds a cheaper hotel in that city they are allowed to book it. The mandation of the programme has been a success with non-compliance sitting at only two per cent of the total room nights. Any employee wishing to book a non- preferred property must gain approval from an authorised signatory. A second RFP was also completed with the preferred suppliers in 2009
6 I THE BUSINESS TRAVEL MAGAZINE
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