“The report of my death was an exaggeration,” wrote Mark Twain.
In recent months, much discussion has ensued about the value of the travel management company RFP and its future place, if any, in the TMC sourcing process. Are TMC RFPs outdated and antiquated in thought and approach? Some may say yes and offer up seemingly new methods of evaluation: short-listing based on consultant recommendations, culture- and value-alignment reviews and face-to-face interviews and discussions.
Actually, though, these approaches have always been part of a smart TMC sourcing strategy. The weight given to and the place for each in the process may vary, as may the decision to use an RFP. But can travel buyer and seller really create a mutually successful partnership without the TMC RFP? Maybe, but there is a lot at stake to consider. We believe 2019 will continue to see buyers working within a formal process—more often than not, the TMC RFP—to evaluate suppliers and build successful business partnerships. Here’s why:
Supplier Offerings Are Complex
Technology, service configuration, fulfillment and integration with microservices vary greatly from supplier to supplier. Documented, formalized evaluation methodologies and criteria help identify optimal solutions and relevant services for the buyer. These methodologies and criteria, often documented within the RFP, also help parties build agreements during the process. Buyers know that the worst place for all concerned is working out differences near the end of the process, when contracts are negotiated—or worse, at time of implementation. All parties, including the travel buyer’s senior management, can lose confidence in the process and the chosen supplier, often creating an unsurmountable obstacle as the relationship begins.
Execution Wins
Travel buyers will require additional hard validation of supplier offerings. Bleeding edge services are valued only once proven, not when they’re still promises. Innovative service centers, newly deployed technology, artificial intelligence capabilities, third-party integrations, customized client reporting and next-level metrics will be most welcome, but only if they’re actually deployed and creating real value. Proof here requires documentation, not just discussion. Travel buyers both will increase their reliance on the reference process and will integrate key deliverables into the mutually decided upon service level agreements. The proliferation of new service models will offer opportunities beyond travel 101 but only if actually realized.
Cultural Alignment
In the near future, travel buyers will judge the organizational similarities between their own companies and their suppliers as never before. Evaluation of the supplier’s soft offerings will be formalized. Corporate responsibility including diversity, philanthropy, community service and green initiatives, to name a few, will be included objectively in the overall review. Suppliers will need to prove claims about their culture, beyond their website missions and value statements. Travel buyers will want specifics, and the RFP will evolve to address this to document that suppliers are who they say they are. Things can and occasionally do go wrong. Recovery, readjustment and restoration are most effective with aligned buyer/supplier values.
Sourcing will always be a blend of face-to-face collaboration and formal documentation, and the RFP will evolve and play its role here. Suppliers will continue to prefer in-person meetings and discussions with travel buyers, creating more space in their processes to accommodate those requested interactions. Mature programs will continue to formalize their review processes: to document agreements, provide objective and quantifiable evaluative review and create manageable understandings of complex offerings, all in order to lead to a well-reasoned business decision.
Consider another Mark Twain quote, which one could apply to suppliers and the qualities they would enjoy facing across the negotiating table: “All you need in this life is ignorance and confidence, and then success is sure.”
RELATED: Hogan Lovells Ditches the TMC RFP Process—one law firm's path in sourcing a TMC via cultural comparisons and fact-to-face discussions rather than via a traditional RFP.