Projects

Changing Travel Behaviours stops over $3m Flying out of the Door

The Client

A UK FTSE 250 world leading provider of mobile power solutions with a staff of 6000 who deliver solutions to clients in over 100 countries.

Odesma was engaged to provide expert support and deliver savings, enhance skills and deploy technologies that would accelerate the organisation’s procurement excellence programme, a key component of a company-wide global transformation programme.

Within weeks of being appointed, Odesma had undertaken significant analysis of the procurement operation and third party spend data. This identified a number of areas where significant savings could be made.

Being a truly global organisation, travel and expenses are necessary for both internal and client facing operations. There were 23 different travel policies in operation covering different regions and locations across the globe.

From previous experience, Odesma knew there would be an opportunity to drive compliance to policy delivering significant savings, particularly after reviewing incidences such as Business Class flights being booked from Rotterdam to London and First Class flights from Bordeaux to London.

Authorisation for travel and accommodation was handled locally by managers within a culture that was very rare to find anyone saying “no”.

The Objective

To centralise and standardise travel bookings within the organisation

Odesma Impact

From the original 23 different travel policies in place and having reviewed the historical data, processes and systems in place, Odesma put in place one new travel and expenses policy.

The first wave of this concentrated on air travel and hotels. The new policy provided very clear instructions for example within air travel, to qualify for Business Class, you must be SLT -2 and the flight needs to be >7 hours…and within hotels, a local price cap was put in place within each of the business’ key global cities e.g. Glasgow is £90/ night.

In parallel to creating and implementing this new travel and expenses policy, Odesma created an internal training and communication programme that made everyone question the need for travel as the default position.

  • Polycom video conferencing, a system that had already been installed throughout the business, was pushed hard through training, highlighting the benefits of using it as an alternative to travel.
  • Views of what best practice looked like were published internally…highlighting the costs involved in any deviance from this e.g. the cost of you changing airline ticket less than two weeks before you were due to fly.
  • Managers were encouraged to think about these costs and about what alternatives might exist before signing off.
  • The Travel Management Company (TMC) were pushed to be more questioning before blindly accepting a booking

 

The Results

This programme will deliver a saving of $2m per annum on air travel and a saving of $1m on hotel rooms per annum – almost 11% of the spend, mainly through a change in mindset and behaviours, but complemented by technology and negotiated rates.