Reviewing travel and printing costs

2 January 2003

02 January 2003

Q: Travel and printing costs are very high in my company and I've been asked to review them. Could you advise me on how to go about this? I need to know how to find the best companies and also how to measure their performance in the future.

A: AIan Hall, European director of non-production items at Unilever and past chairman of the Institute of Travel Management, writes: Broadly speaking, a review of printing and travel should follow a classic strategic sourcing process.

The steps are as follows: profile the market and request information, develop a sourcing strategy, build a supplier portfolio, issue a request for proposal, and select and implement.

This should of course be balanced by the company culture and business objectives. Senior management buy-in is vital to achieve success, especially where policy needs to be reviewed.

For travel, sourcing falls into two categories, direct and indirect. Direct sourcing includes primary suppliers such as airlines and hotels, whereas indirect sourcing includes travel agencies, corporate cards and expenses management tools.

It may be useful to review your travel agency supplier, as it acts as the conduit for most or all direct travel purchases. It is possible to obtain significant savings on air travel and hotels if you have not carried out such a review previously.

However, transport tends to be easier to tackle than hotels, as there are fewer suppliers and generally greater internal cost management through audit approval procedures.

Printing sourcing needs to be focused with clear a understanding of requirements before you go to market.

Surprisingly, experience has shown that internal customers are often vague regarding requirements and either take a decision without consideration of cost or leave style, design, and so on to the printing supplier.

Measuring both areas requires clear service level agreements. Printing can be measured against the finished product and against service provided, using time scales, for example.

This is more difficult with travel, but it is not impossible. For example, travel agencies can be measured on service, such as correct tickets, as well as the time taken to respond to calls and complaints.

Information on printing and travel is available from CIPS. Specific travel information is available from the Institute of Travel Management, a specialist association for corporate travel managers. And advice from peers or third-party consultancies are also effective ways of gaining good knowledge of the marketplace and current "best performers".

SMjan2003

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