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Travel manager Angela Smith managed to slash 28 per cent off her
travel spend last year. Gillian Upton found out how she did it

SUPPORT services company Carillion’s values are openness, collaboration, mutual dependency, professional delivery, sustainable profitable growth and innovation. Quite a list in fact. Not surprising then that some 18 months ago on its regular review of costs the company embarked on an internal company-wide campaign to reduce travel spend and improve efficiency.

The task of meeting that goal on the £12million annual travel spend was met by Angela Smith, travel manager at Carillion. Smith is responsible for Carillion’s largely UK spend, spread across air, rail and hotels and including a small percentage of international flights, averaging ten a week.

Rather than a self-booking tool, Carillion manages travel across its four business units with more human contact, utilising an implant with some 500 bookers. There is only a mandated bookers list in one business unit, and the company polices every request which falls outside policy to minimise non-compliant bookings. The travel policy is constant across all four business units. Read on to find out how Smith rose to this particular challenge and managed to save an impressive 28 per cent on travel last year.

STEP 1: The first step was to look at the travel policy and identify where it could be tightened up. Various ideas were gathered through brainstorming sessions held with its TMC, Omega. “We were involved fully,” says Omega’s Louise Fletcher, and the savings from each idea were looked at in great detail.
Some ideas were discarded, such as changing the business class allocation from four hours to eight hours on International flights – this was not deemed a worthwhile exercise mainly due to the low number of International flights taken. Another idea was a
pre-approval process for all travel. This too was rejected, deemed as a step too far.

Instead, the focus was on approving those trips which fall outside budget levels and on buying smarter. “As well as policy changes we looked closely at the suppliers we were using and looked to re-negotiate deals where possible,” explains Smith.

STEP 2: The decision was made to begin the savings programme with tighter travel policy controls and this helped bring transaction numbers down by two per cent. Carillion had already come up with a list of scripted answers in order to support the TMC when employees raised questions about the changes.

A communication was also sent to all employees outlining the changes and explaining why these were necessary. All senior managers who were able to approve travel were also contacted to explain the need for them to really understand the reason for travel on all requests. As well as the policy changes, weekly reporting and conference calls with senior management were also introduced. By reporting weekly the senior teams were able to keep on top of their spend and deal with non-compliant travel.
Tele, web and videoconferencing are already massively encouraged within Carillion with many UK sites having access to videoconferencing. As employees were expected to reduce their travel to internal meetings these alternative meeting methods were promoted in each travel communi-cation. As a result, travel to internal meetings reduced from over 50 per cent to just 35 per cent. On the travel portal managed by Omega employees can see at a glance which sites have videonconferencing equipment.

STEP 3: With hotels, Carillion has a three-star only policy with a preferred list of suppliers but none of it was mandated. Smith took the decision to mandate hotel policy and consolidated the list of suppliers too. However, if any traveller finds a cheaper hotel in that city they are allowed to book it. The mandation of the programme has been a success with non-compliance sitting at only two per cent of the total room nights. Any employee wishing to book a non-preferred property must gain approval from an authorised signatory.

A second RFP was also completed with the preferred suppliers in 2009 in which they were asked to support Carillion in its bid to improve efficiency. Most were happy to reduce their rates based on the extra volume they would receive from a mandated programme.

Carillion was able to put 40 per cent of its hotel spend with one major hotel chain and this resulted in a deal being struck in late 2009 to include an upfront discount.

STEP 4: With rail, Smith took a different approach as “there was not much fat to skim off,” explains Omega’s Louise Fletcher. ”Here it was about education as people are booking late and rail prices are rising,” adds Smith.

She worked with internal communications to send out various guides on how to buy smarter, including the benefits of booking early and the difference between the ticket types – advanced tickets and anytime tickets, for example. Webcast sessions were also held with bookers with a strong focus on rail.

“The message was to empower the bookers to challenge the travellers and push policy. We also gave them tips on how to do it,” explains Smith. Carillion also introduced pre-trip approval on any rail spend over £150 to match the approval for air. “It seemed silly that you couldn’t book a flight over £150 without approval yet there was free rein on rail travel,” she explains. Rail was also promoted heavily as a lower carbon alternative to flying domestically. “We educated employees on the benefits of rail travel, such as being able to work on board,” explains Smith. The strategy worked as last year Carillion bought more rail tickets but for less. Rail ticket volume increased by 25 per cent but spend reduced by two per cent.

STEP 5: Group conference and events was the next low hanging fruit and here Smith made amazing strides. “We did have a problem with people getting quotes directly so we’re constantly telling bookers not to do that and to book through Omega,” she says. Adds Omega’s Fletcher: “Employees were booking haphazardly and overnight we stopped it.”

As a result of introducing an approval process, Carillion witnessed a 78 per cent drop in spend. “It made them say, ‘Is this meeting really necessary?’,“ says Smith.

The new procedure has just four very senior people who can approve meetings spend and employees have to justify the reason for not holding the meeting on-site.

Carillion has also recently introduced an online booking system for meeting room facilities at four of its main sites.

STEP 6: Looking to the future, there’s more on the agenda. The travel department still runs annual roadshows at offices to talk to bookers about the benefits of booking early, and have recently established a travel focus group. This is made up of ten key bookers throughout the company and in August Carillion began a two-month trial of Evolvi’s rail self-booking tool with 48 hand-picked bookers.

”I’ll look at all the MI before and after and make a decision,” says Smith. “I’m very excited by the rail SBT pilot scheme,” adds Omega’s Fletcher. Smith believes that by having an SBT it will encourage people to book earlier and bring the average ticket price down.

Fletcher is also hoping Omega can tackle the high-touch area of cancellations and amends as Carillion clocks up some 700 rail cancellations and amends every month. “It isn’t a straight-forward purchase but it’s an interesting time to trial the product,” says Fletcher. Carillion has set a goal of a 75 per cent adoption rate on the new rail tool.

“I’m happy with 28 per cent savings over the year,” concludes Smith. She still reports weekly to senior management and is still looking at ways to keep costs down in 2010, mainly through deals with preferred suppliers and keeping up a high compliance to policy. Things have changed and travellers realise that they have to cut down and keep it all in place.

“Communication is the key to implementing any kind of change,” says Smith. “I believe if employees understand why it is being done and what the benefits are then they are more likely to comply with the policy.”

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