It’s often said that innovation in corporate travel doesn’t keep pace with advancements in consumer travel. Some accuse travel management companies of being stuck in the status quo. Others point fingers at booking technology providers for failing to adequately update systems. These may be fair criticisms, but travel managers shouldn’t shy away from recognizing who looks back at them in the mirror, or at least who those people work for.
Companies are risk-averse. They’re bureaucratic. They have legal departments keeping them out of trouble. Amid heightened attention to data privacy and security, they have IT teams reviewing everything employees use.
Those can be apps on mobile devices, new booking systems or other non-traditional vendors. Sometimes individual travelers are the first to adopt innovative products and services. Think TripIt, Airbnb and ride-hailing platforms. Those forced responses from travel program managers.
“We are not quashing innovation because we don’t want it to happen,” said Rita Visser, Oracle global travel GPO/executive travel services, speaking during a teleconference last week. “Legal’s first thing is to make sure my internal customers — Oracle employees — are safe and protected at all times. It’s the legal team, corporate security and internal boards that are saying, ‘Wait a second, we have to make sure these things are being done on the up and up for all travelers.’ ”
Uber and Lyft were great examples. In corporate travel circles, the early reaction to the ride-hailing platforms was concern from a duty of care perspective. “But we found ourselves in that cycle,” Visser said. “If we say no, how do we get it to stop? In the end, myself and others said this is not something we can stop so how do we make the best of this scenario? What relationship can we put in place to protect us and protect our travelers? You can either say, ‘No, not on my watch,’ or be open to it and see the options.”
Larger companies are more likely to have turf wars and red tape, but many small and midmarket companies are just as circumspect.
“Even though we are not as large [as Oracle], we have a lot of layers,” said Dart Container travel services manager Cheryl Benjamin, also speaking during the call. “Most of our departments understand what travel is. IT understands our needs, legal understands our concerns. With us, it’s more of a corporate culture issue. We tend to be a little more conservative, and I think that’s maybe where some of the small to midmarket companies fall in.”
AmTrav Corporate Travel president and co-founder Craig Fichtelberg said many among his clientele of small and midsize companies behaved differently and were “willing to take chances outside the norm.” In those companies, trying new things is easier for decision makers who are “closer to travel programs,” according to Fichtelberg.
Listen to a recording of the live teleconference.
For larger companies, he said, “I wonder how much information about travel is getting lost as you go up the chain and bring in all these different departments. Do they understand the content challenges, NDC and all these nuances in business travel? When reporting up to people that don’t really have that deep of a grasp, I could see that stifling change. Do these people understand how big of a deal some of these things are? It’s not only about money.”
Even when the travel department gets the requisite green lights, change is hard. The cost of switching certain types of providers can be big and change management can be daunting. It’s often easier to stick with the incumbent provider or maintain programs that seem to be working well.
“That has been a model in travel that has been really difficult to overcome,” Fichtelberg said. “Once you establish a relationship, every day you are loading in profiles and building relationships through the TMC. It gets harder and harder to unwind from that and move into another relationship.”
For many travel managers, it’s worth it. When TMCs buy, build or partner for technology, it means clients don’t need to hunt around for solutions themselves and take on all the vetting. If nothing else, according to Visser, that’s a smoother path.
“We don’t have to figure out how to pay another supplier, if everything can happen through the TMC,” she said. “That’s when and where life is easy, but that doesn’t mean it is always the right choice. When I have to do that myself, that’s when it becomes a challenge internally.”
Moving forward, who do travel managers expect to be industry innovators? They could be additional online travel agencies or other leisure travel players adapting for the corporate market. They could be technologists from other industries or from academia, or college kids working in dorm rooms on the next big thing. It’s sensible to hope TMCs are among those pushing the envelope.
“TMCs want to be everything to the customer; if people need something, they can go there,” Visser said. “Is it true on technology? Maybe, maybe not. We are looking at some different solutions now, some through our TMC and some not through our TMC.”
Benjamin and Visser provided pointers for travel managers facing these issues. They both said it was important to listen to all voices. That includes travelers, people outside of travel and even suppliers going over the travel department to sell to top management.
“The best thing to do is to not try to shut it down immediately,” Benjamin said. “It never hurts to listen. I am finding out what is out there in the market. Maybe I am too close to the problem to see it and someone else in my company sees it differently than I do.” She acknowledged that by running an ARC-accredited Corporate Travel Department, she’s in a better position than many peers to have a finger on the pulse, control a budget and make decisions.
“We’ll have any conversation we are asked to have,” Visser said. “If there is a great solution out there that we have held off on, or from a financial standpoint doesn’t make sense, we go back to that person [who suggested it] and explain why it is not good for us. Don’t cut them off at the pass. That helps no one.”
What has worked best for Visser is to get all parties involved. She’ll inform the legal department about Oracle’s options — either try a new product, system or process, or don’t. A hands-off approach could sacrifice cost savings and improved traveler experiences, and leave the company blind to what some travelers may be doing anyway, she said.
Benjamin won’t run ideas up the flagpole unless she feels like she’s on solid footing. “There really needs to be a good sound business reason,” she said. “In some ways, that may be what causes us to be risk-averse on innovating technology within our companies. You really need to have a good strategy in place before you go in.”
Even so, Benjamin watches for new and better ways of doing things. She was “blown away” by the new entrants, startups and other would-be disruptors that showed up at the Global Business Travel Association convention in San Diego this summer. “They are trying to bring new products to the market that you may have never realized you needed, or solving an issue you never thought you’d be able to,” she said. “If it makes sense, I can bring it in for an executive review. It’s not always about the money, but what it will bring in terms of experience for us and for the travelers.
“If we don’t make innovation a priority in some way, we are not doing the right thing by our companies,” Benjamin continued. “You have to be looking; you can’t be afraid of it. Maybe you put it on the shelf for a few years because you don’t have time, and maybe it’s not going to be the bright, shiny new product when you have time to implement it, but at least you are aware of what is going on.”
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Great piece as always Jay and team. Is there some sort of an adoption scorecard by region that can be shared to understand who adopts well and why/how? In my experience, travel managers are open to the conversation of adding new content and suppliers but the internal cost of change is high and gets lost in upward communication. Can’t blame them, a flawless (ha!) implementation has more invisible costs than planned historically and leaders want assurance on how to best tag the revenue/cost targets.
Great article and fantastic advice and observations made by both Visser and Benjamin. The bottom line is with the rapid pace of disruptive technologies being adopted that improve the traveler experience (Uber & Lyft) for example, it’s virtually impossible to fight the trends regardless of the dictates of your corporate travel policy. If improving productivity on the road means breaking policy, corporate travelers will break policy every time. We see it in the data with all the corporate clients we work with. Even those who have policies that prohibit the use of the sharing economy products and services out there, we are reporting large and growing spend volumes in all these categories. As Visser mentions it’s virtually impossible to buck the trends especially when you take into consideration the upside benefits and value they deliver. Productivity while on the road is king and the primary driver behind traveler behavior. Ever try and hail a cab to the airport in downtown NYC when it’s raining?
This is always going to be a hot topic with as many opinions as there are options. Data security is a global issue and allowing a (new) third party to have access to travelers and their data has inherent risks. I am on the same page as Rita in that if you can rely on the TMC to be the (new technology) integrator it can accelerate the process and also ensure that the new entrant can interoperate within the TMC/GDS ecosystem. It’s not as simple as just “app approval,” and the due diligence that slows down a process is a necessary guardian of the Corporate Gates (portal).
Great point about the data security issue, although it’s no longer just about “data security,” it’s also about “data privacy.” While the two go hand and glove this has become a more pressing priority for company IT departments who have moved away from delivering innovative technology solutions and are now the new gatekeepers for (new) technologies being adopted. IT is the governing authority over what technologies get approved and for whom they allow access to employee data (I call this duty of care for data). It’s now imperative that the new tech being adopted (apps or third parties) survive the rigors of the new IT audits and regulations. Regulating bodies BSI (British Standards Institution), ISMS (Information Security Management System), and QMS International (Quality Management System) regularly examine and audit whether or not a third party or app is ISO compliant (International Organization for Standardization) for both commercial and personal data. IT organizations must also require these new technologies be EU GDPR complaint (data privacy) and if credit cards are involved CPI DSS complaint (Payment Card Industry Data Security Standard) before approving that third party or app as a “safe” or “approved” technology provider for their employees. But it doesn’t end there, most reputable IT organizations will hire independent technology auditors to perform (PENS) penetration testing and conduct ethical hacks before sanctioning the new technologies. Cyber Insurance coverage is something that didn’t really even exist before the year 2000 but now most companies require third parties carry the coverage. At the end of the day, any new technology (app, platform, solution, POS, GDS, TMC…) that has access to, or is processing personal employee data is vulnerable and share the same inherent risks regardless of how much data protection software and best practice protocols are followed. If anyone has any doubt about this all they have to do is turn on their TV and watch the news.