Re-Wire the TMC Sourcing Process?
In October, we challenged the industry with our call to action to ‘Rewire the TMC RFP’. Why? During several client listening exercises, we noticed a theme. The TMC RFP is seen as a necessary but time-consuming activity in our industry and one that can fill those on both sides of the negotiating table with dread. For buyers, the RFP process takes months out of their lives and other projects and programme maintenance can grind to a halt. From a TMC perspective, the RFP process rarely allows them to shine and demonstrate the creativity that they would like to.
We had an overwhelming response to our campaign, a special thanks to all those who contributed. When we started this process, we thought there must be a better way…and now we are sure of it!
What did we hear from the TMCs?
- Is this a request for proposal, or a request for partnership? There is a key distinction.
- The TMC community would like buyers to stop, take a breath and think about why they are going to RFP?
- Could your existing TMC still be the right partner? Be bold and say ‘we don’t need an RFP’ even if that is what your management expects.
- There is little focus on the total cost of travel, it always comes down to transaction fees in XYZ market.
- Scoring and evaluation criteria can change mid process, this makes it almost impossible to respond in the right way.
- TMCs would love buyers to be honest about the purpose of the RFP and provide the opportunity for more dialogue in advance. The TMC may rightly choose to ‘no bid’ if they don’t see a good fit, which saves time for all parties
What did we hear from the Buyers?
- Those getting the best results recommended ‘getting out there, meeting the suppliers, seeing their offices, people and technology in action’.
- Not one Buyer felt like long questionnaires were helpful.
- Regular engagements prior to the RFP saw good results and helped to better understand suitability.
- TMCs are not flexible enough and didn’t truly listen to their needs.
- A sales mentality dominated with little contact with operational or client management folk.
What surprised us?
1. Neither the Buyer or the Supplier sees value in the process
When asked why we persist with the RFP process, both parties cited each other as the reason! TMCs stating buyers won’t change and the buyers stating TMCs can only work in this very structured and formulaic way!
2. Use of consultants is seen as good & bad
Some consultants were accused of over complicating the process in order to justify their involvement, it was also noted when the consultant’s role is clearly defined and they are truly representing the client, they can add real value and be a lifesaver. Some TMCs (in a prospecting role) welcomed the use of consultants stating a higher chance of change of TMC.
What do we recommend?
We have taken everything we heard and overlaid this qualitative data with the 100+ years TMC buying experience we have across our team to create the Festive Road way.
The Festive Road 3 C’s sourcing model
Currently there is an imbalance across these 3 critical areas for a TMC/Corporate relationship to succeed. Not surprisingly the focus is on the commercials. We would advocate for an even balance across Capabilities, Culture & Commercials to ensure the right choice of TMC is selected.
A good capability meets commercials intersection example would be to look at a TMC Technology roadmap, is the investment to improve their profitability or improve the clients total travel budget?
Or the capability / culture intersection. A TMC may have the most amazing profile solution to provide great service but if the values are not shared across the 2 organisations, the way in which this is delivered will collide and create tension in the relationship.
How can we help?
Here at Festive Road, we understand that there is a time and a place for a traditional RFP. If your company is highly process and compliance driven, then this makes sense. It appears however that somewhere along the line, this model was built and agreed as the standard for all organisations. One alternative approach would be to simplify the entire RFP into three manageable stages: 1, high level marketplace evaluation to assess capability, 2, targeted meetings with selected key players to assess capability and culture and 3, finally decision making with commercials. However, we believe each RFP should be tailored to each client’s unique situation.
We’re ready to Rewire the TMC RFP, are you?
About Festive Road
Festive Road helps companies grow through better engagement. Headed by Business Travel Thought Leaders Paul Tilstone & Caroline Strachan, together with their network of international associates, they provide engagement, strategy, insights and event services. The Festive Road team has been recognised multiple times in prominent industry leader lists and industry awards as leading lights in the global business travel market since 2007.