VolkerWessels opted for outsourcing to transform its corporate travel programme.
As a Dutch-based construction firm made up of five companies building rail, road and airport infrastructure with a turnover of nearly £1bn in 2018, ensuring a cost-effective, efficient and controlled travel programme is key. This was the challenge taken on five years ago by Ben Rowe, group procurement manager for VolkerWessels. The company resolved to outsource travel management to Click Travel.
According to Rowe, travel management is a challenge due to the large number of projects running simultaneously, with “about 150 contracts on the books, along with 3,000-4,000 high-end labourers, around 7,000 people could be working at one time”.
But the “sporadic” nature of the travel management system in place previously, controlled at a local level, caused a “mismatch of data” which meant it was hard to track costs 100% and manage travel accordingly.
Speaking at The Business Travel Show, Rowe said: “My challenge five years ago was that we had Click Travel dealing with at least one of our companies, but in the five companies we were very ad hoc about what we were doing.
“We had a PA who did a lot of booking, we had direct accounts with Premier Inn and Travel Lodge, we had some local accounts, we had some agreed rates tucked away in a draw, we had invoices coming in from different people, and travellers putting things on personal expenses.
“When I asked our accounts manager how much VAT we’d be getting back, I found out the hotels couldn’t actually tell me whether we were getting all the VAT back on not.”
He added: “We were cost-coding 100%, we believed we were spending approximately £5-6m for hotel, ground and air travel. But we weren’t totally sure because we were so sporadic in how we procured it, so there was great opportunity to do it better and we partnered to do that.”
Rowe said the company mostly focused on running contracts and business resource costs, so it was procurement that said to the board: “We need to procure our hotel travel suppliers better”.
Multiple stakeholders and challenges made it a complex procedure, so dashboards of data were useful. This was where the focus on using a data-focused TMC was established.
Rowe said: “Certainly in construction they’re very busy, focused people and if you write them a report that goes past two pages they won’t read page three. So, you need data to support your argument and a dashboard that coordinates the truth so they can look at it and understand in a clear, concise manner.”
With a procurement team of 40 people working alongside Rowe, few had time to manage travel systematically as well as procure all the industrial resources needed for ongoing business projects, and for this reason outsourcing to TMCs was found to be the best option.
Rowe said: “Click [Travel] account management in my eyes is very much our travel buyer. If you can’t really afford to have your own team it’s sometimes good to outsource it.”
Data reports can help demonstrate improvements, track savings and boost compliance. Rowe said: “Our company culture is that we want people to come on our journey, and what you’ve got to do is have very good solutions because if you’re dragging people along, then you need to be able to prove to them that what you’ve done is substantially better than what they’ve done previously.”
He added: “I got to a stage where we’ve got £6m of hotel, half a million of air flight and half a million of our associate travel spend going through Click and we need to test how good it is. Once a year we run an RFP price procurement exercise and services are set up on our behalf so we get first response on that. Once a year we’ll sit down with our buyers and we’ll go through it one by one and take a view on why we’ve got a policy and why we’ve got a slightly more aggressive policy in some places.”
Rowe said procurement professionals rarely turn down a good set of data. “Anybody in any procurement will love data. While we are buyers by nature, we’re not finance people, so we like making deals and trying to save a pound, but effectively if you give us a spreadsheet and some numbers we get quite excited by that,” he said.