Airline Services & Expenses Category Procurement Intelligence Report

Business Travel market around the world is undergoing rapid transitions that have a massive potential to influence the way companies strategize for Airline Services & Expenses procurement and the cost they have to incur. The availability of advanced technologies has prompted travel and event service suppliers to heavily invest in them to improve efficiencies and customer experience. However, most have learnt that technology alone is not a replacement for the human touch when it comes to customer service. As a result, suppliers are spending on both counts - technology and customer service staff. Till the time a formula for perfect balance between the two is discovered, buyers should expect to bear some of this increased OPEX of suppliers.

With regional and national boundaries blurring in today's corporate world, companies increasingly find themselves with a latent need to bring together geographically distant teams, customers and stakeholders. Therefore, the demand outlook for Airline Services & Expenses is expected to remain strong.

As costs rise, companies will be pushed towards finding better cost efficiencies in their travel and entertainment programs. Buyers are leveraging new management tools to analyze the costs using a Total cost of trip/event approach as against cost of an individual trip/event cost item. It is now also expected of suppliers to assess the cost effectiveness of any service they provide from a more holistic point of view.

It has become imperative for category managers to remain as agile as possible in terms of their procurement practices. However, it is not always easy to quickly spot and implement alternative practices in a category like Airline Services & Expenses. To help quick decision making, this report advises on several procurement best practices that have worked well for category managers.

For example, Category buyers should invite bids from all potential service providers that have the ability to meet the overall requirements. Bids must be evaluated based on pre-defined parameters such as financial strength, reputation, service offerings, geographical presence, and track record. Buyers can use standard scorecards to evaluate service providers and provide necessary feedback to rationalize the given scores. This helps in the effective documentation of decision-making processes.

Investing in benchmarking studies help category managers enhance their knowledge about market pricing or billing rates based on job roles and functions. This allows them to not only save costs but also negotiate with suppliers. For example, while negotiating on rates of bundled services, buyers can save significantly on a single service by cross verifying the rates quoted by suppliers against industry benchmarks.

Large organizations seek engagement with global category suppliers. However, they must try to achieve the right blend of regional and global suppliers in order to ensure availability of management services at locations where global players do not have necessary capabilities.

Airline Services & Expenses procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Airline Services & Expenses procurement. Some examples include: