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Why Organizations Should Leverage a TCO Approach

Why Organizations Should Leverage a TCO Approach for Travel, Meetings, Payment and Expense Programs

Most organizations focus their time and resources on reducing costs in areas with the lowest opportunity.

However, areas that have a greater potential to impact the bottom line — such as program bypass, card payment, or compliance — are taken for granted or ignored completely.

When employed for a travel program, a strategic TCO (Total Cost of Ownership) approach looks at the entire travel ecosystem and value chain — including payments systems, workflows, transaction processes, bypass spend and other factors.

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TCG Consulting's Q1 2018 Newsletter

TCG's initial 2018 Newsletter installment "Innovation, Ideas, and News" is available.

Featured in this issue:


TCG Consulting Assessment - AEGBT’s Acquisition of HRG

TCG has posted an initial response to last week’s announcement regarding American Express Global Business Travel (AEGBT)’s acquisition of Hogg Robinson Group (HRG), based on feedback from multiple internal TCG subject matter experts.

THE IMPLICATIONS OF THIS ACQUISITION ARE SIGNIFICANT AND RUN MUCH DEEPER THAN MERELY A SUPPLIER CONSOLIDATION EVENT.

THIS EVENT SHOULD SERVE AS A CATALYST FOR ORGANIZATIONS TO FUNDAMENTALLY RETHINK PROGRAM STRATEGY, SUPPLIERS, MANAGEMENT AND OPERATIONAL DELIVERY.

  • Due to regulatory and other closing requirements – which are still pending - the current Travel Agencies are likely to remain separate for an extended period
  • Based on benchmarks from similar historical transactions, this period will range from six to 18 months
  • We expect that with a very few “special” exceptions, there will be no immediate impact felt by organizations – some unique client specific situations only
  • TCG has forecasted this accelerating trend of supplier consolidation in response to the changing role of the Travel Agency for supporting organization programs in the market
  • While the large agencies continue to consolidate in an attempt to maintain or grow market share, benchmarks show that 71% of organizations managing global programs use two or more travel agencies, sourcing best in breed suppliers to support company strategic plans vs. the traditional agency bundled support model
  • Historical benchmarks show that 1 in 4 of the large agencies would elect not to bid in a competitive global sourcing event - this consolidation will further disrupt the market dynamic and force organizations to reassess the sourcing event business case and ROI projected outcomes as part of a broader program strategic roadmap
  • The continued aggregation of suppliers, combined with maturing of global programs, dictates that organizations approach agency sourcing, oversight and program operational enablement in a fundamentally different way
  • Regardless of agency or program size or scale, market benchmark averages still show only $0.59 of every dollar of total program spend is managed by the designated Travel Agency(s)
  • Leading organizations continue to look holistically at how best to manage, integrate and optimize total program spend across Travel, Meetings, Payment and Expense Management – leveraging the agency(s) as operational enablers of a broader Total Cost of Ownership (TCO) strategy

If there are imminent strategic or program issues created by this latest supplier consolidation, feel free to contact TCG Subject Matter Experts for a more in-depth discussion.


Delivering Innovation: Managing and Optimizing Corporate TMPE

Join TCG Consulting for our upcoming online Executive Brieifing and learn how similiar organizations are leveraging a turnkey external program management strategy and management approach solution to proactively address the following issues:

  • Travel and Meetings are an organization's #2 indirect cost - and one of the most controllable
  • As organizations grow and expand via globalization or M&A, they get caught in a "No Man's Land" - Current oversight, management tools and processes no longer provide effective control, but hiring a full time Program Manager is not justified
  • Internal ownership is fragmented, resulting in lack of strategic direction
  • Reliance on a traiditional travel agency centric support model drives increased cost and ineffective program oversight
  • Little to no integration of Travel, Card and Expense Management tools or processes creates reduced user acceptance and increased risk
  • The value a strategic program assessment & roadmap - improve oversight, reduce cost, improve user acceptance, streamline workflows, reduce risk
  • Policy - How to benchmark & upgrade + align to organization culture and strategic priorities
  • Optimized and integrated sourcing of Air/Hotel/Ground contracts + program enablers including Travel Agency, Card & Expense Platforms, Mobility, etc.
  • Create effective Meetings oversight and integration

2016-2017 Corporate Hotel Programs - Marriott/Starwood Merger & Sourcing Innovation

Following the approval of the merger between Marriott/Starwood, TCG Consulting's Global Hotel Practice has issued our analysis of what the immediate implications and impacts will be for Corporate Hotel Programs, including an assessment of what could be expected in the future.

We also highlight NEW Innovation coming out of the Global Hotel Practice for driving savings and achieving program optimization during the 2017 Sourcing season.

Scroll down to view the content in its entirety or via the link Hotel Innovation April 2016.

Hotel-Innovation-Campaign-April-2016


Assessment, Issues, and Implications for SAP’s Potential Acquisition of Concur

Based on numerous client requests, Jim Coufal, TCG Consulting’s Global Payment and Expense Management Practice Director, has developed a concise and informative early review and assessment of the intended acquisition and its potential market impacts and implications.

SAP Purchase of Concur - TCG Consulting Review of Impacts & Implications