Caroline Allen is the European Regional Director for the Association of Corporate Travel Executives (ACTE), which has partnered with the Sourcing Industry Group (SIG) on SIG’s next London Regional Roundtable (taking place March 15). We got together with Caroline to find out more about her association, and why the partnership makes sense for travel professionals and procurement specialists alike.
Outsource: Caroline, you’re the Regional Director (Europe) for ACTE: can you tell our readers a bit about ACTE itself?
Caroline Allen: ACTE is the Association of Corporate Travel Executives. The organisation was set up as a non-profit trade association for the corporate travel sector in 1988 by people from the industry – both from the buy and the supply side – that were looking for an opportunity to be able to exchange ideas, discuss industry challenges, innovations, trends, and be able to find a neutral platform to debate those issues – and help find solutions, so that people weren’t having one-sided conversations, and weren’t just having sales conversations.
So we provide a platform through face-to-face education, (and now through a series of webinars as well) and also supplemented with online conferences – so we provide about 75+ events a year, including five global conferences, and we engage around about 10,000 senior execs from the corporate travel sectors from around the world – from over 100 countries on five continents. Our HQ is in Washington, but over 50% of what we do, for many years, has come outside of the US. We do have small offices but we’re a very lean organisation, relying heavily on volunteers that are full-time employees of the industry.
O: ACTE has partnered with SIG on their next London Roundtable: what prompted that partnership?
CA: When we connected with SIG we discovered that we share a lot of similar value sets and approaches to, for example, education and information sharing. I was invited to attend a SIG event in London last September, and I brought a procurement specialist who contributed well to the forum; I just felt there was a real synergy, and an opportunity to help leverage the networks we both have. Many of the procurement professionals working for SIG’s members had indicated that they wanted to have better visibility and understanding of the corporate travel sector. It was a natural fit for both of us.
O: What do you see as being some of the main challenges that some of your members are facing now, which you think are going to be front and foremost in mind and which working with SIG might help them address, both at the London event and going forward?
CA: Well, from listening to some of the challenges that were shared at the SIG event that I attended, the language is very similar (although some of the acronyms are a bit different!), and some of those challenges remain the same, from a procurement-specific function and a travel-specific category: virtual teams; national communications; social demographics; the supply chain risk, and people and data and asset risk. So some of these subjects are very similar, and a lot of our travel specialists and travel professionals do report in in some way to a procurement function or work alongside that function, so I think there’s a great opportunity for better understanding between those two areas, and to really hone the communications between the functions and improve the strategic directions that the travel category can take within the procurement environment. Ultimately, cost control, technology, communication, increasing value are some of the things that we see as potential gains.
A lot of the travel function over the last decade or two has increasingly been connected to procurement, and the travel function on its own has grown from historically a business travel unit, that managed a national program and then globalised, so the industry has grown organically over the last 25 years: it didn’t set out to be a profession. A lot of the people running travel programs have come from within the industry and they’ve grown as the sector has professionalised; but we then started to see the procurement function take ownership of travel as cost control started to become a major focus in many different areas of business.
A lot of travel professionals have learnt a lot of the procurement tools and techniques and apply them very rigidly to procurement and the sourcing process in the travel category. It’s still an evolving process, and a lot of companies are still learning some of those tools and tricks, and we are seeing a greater professionalisation of the sector as a result of that.
O: Do you feel that there’s enough formal training and ongoing professional development in place to help your members develop in that area?
CA: Well I think this is an area that many organisations are looking to focus on, and as we’re coming out of that glum period of the recession, we are seeing them investing in people – albeit there are fewer people to do the same number of jobs, and I don’t see that changing too much, but I think there is a development. We are looking at providing some sort of training – we are introducing online training courses – but I think the procurement training that SIG offers could also be a useful tool for some of the travel category specialist.
O: Do you feel your members are sufficiently up to speed with the technological developments that will be affecting your sector in future? The Outsource editor will be speaking at the London event on ‘Artificial Intelligence in the workplace of the future’, for example: do developments like that occupy your members’ thoughts?
CA: One of the survey questions we put to buyers at our Australian conference in December was: “Where do we think the biggest challenges are going to come from in the next 12-24 months?” And technology and integrating industry outsiders are two challenges very high on the agenda. So integrating technology is a very major piece. We are seeing a lot of change in the way business intelligence (as opposed to data) is captured and how that can support other parts of the industry.
But I think we’re still at the moment very travel-centric in our understanding, and I think having a view about what’s happening outside will help us see what’s coming over the hill, and be able to see within the industry how we can harness some of those innovations – and indeed some of those industry outsiders might well come from left field: some of the new providers to the corporate travel sector may well come from an area that’s not currently envisaged. That doesn’t specifically refer to AI though: I’m talking about technology development in general terms.
O: Taking a step back from technology (but perhaps encompassing it): how do you see your industry changing over the next few years and what are going to be the bigger drivers for that? And how can procurement play a role in solving some of the challenges coming over the hill?
CA: I want to share with you some of the predictions that were made at our buyer conference in Sydney in December, because that might answer the question. Firstly, 90% of delegates are meeting with and working with and considering different industry partners than they were considering three years ago.
That could mean different things: it could mean that there’s more tendering and more business changing, contracts moving, where they may not have moved that much over the last couple of years – so we could see that there is more movement in the market; or what it could indicate is that there are more players coming into the market, new industry players.
That would probably be underpinned by the biggest industry challenges that people expect to be facing: 46% think that technology is going to be a big challenge, and that could be integrating different technology platforms, it could be seeing new technology development (we all know it’s moving at the speed of light).
Moreover, 31% also believe that industry outsiders are going to be a big change in the industry; and we also think of payment solutions as being a challenge and a big change – that landscape is changing with near-field communications, paying on mobile phones in different ways and with different virtual cards, and different types of solutions – and we do see a real connection there with procurement and finance because they will drive a lot of that decision-making.
And 79% believe we will book and manage travel differently in the next 24 months than we have done in the past, and that’s phenomenally high, in terms of speed of change; 81% believe we will use sharing economy providers in some way in the market (now we don’t expect the baby to be thrown out with the bathwater: we don’t expect all of a sudden that there will be no hotels being used and for it to be all Air BnB, that’s not the case, but we are seeing Uber making traction, for example, and others similar to them in the market).
What is interesting is that 80% believe the focus is moving back to service over savings – so it’s not just about saving money, it’s about making sure that the travelling community, the employees, the stakeholder are happy, they stay in their jobs. We’re seeing an opportunity there for business intelligence to establish whether there’s connections between staff turnover and the policies that have been put in place.
The top three challenges, really, are always time, technology and compliance.
O: To what extent has the outsourcing model been adopted by the members of your industry, and do you feel that that’s been a success – and if not, what could providers do to cater better to your members?
CA: Well it varies by market, and there are a number of different factors. We might find some business markets a little bit behind: Russia and the Middle East, and Asia are a little bit behind the more mature markets, such as the UK, the US, France, Germany.
In some cases we’ve seen outsourcing in a slightly different way than you would interpret it: some suppliers have had their key accounts staff outsourced to their customers; we’ve seen some of that in the industry for several years. But we’re also seeing some companies in-source certain functions, perhaps taking on some of what has historically been a supplier function.
O: Finally, if you could wave the proverbial magic wand over your industry, what changes would you make?
CA: We had a global planning call for our conference coming up in October, and we had a number of different buyers on there, and some interesting ideas came up. One word that really struck me was “simplification”. We are a very complex industry, we have so many different moving parts, and it’s actually been in a supplier’s best interest to create complexity because it creates differentiation, but I think we’re often trying to do far too much. We would like to see some simplification in the process, and I think technology has the potential to do exactly that – or exactly the opposite, depending on what it is and how it’s deployed! Simplifying the sector would be quite welcome.
The process is complex from sourcing to expense management to paying the bills; there are so many lengthy steps and the actual sourcing process in the corporate travel sector can be anything from weeks to years, depending on the product and now nimble they are, and depending on the value of the contracts. But in a globalised corporate travel world, with many different geographies and cultures, it can be very difficult to achieve the desired standardisation and simplification. If there could be some tools, technology, apps that could go some way towards the standardisation of data, to be able to support business in a more effective manner, that would actually be quite a welcome development, I believe, throughout the industry.