Category Management and Travel: Two Essential Tools for Success

DB-0316By Deb Blowers, Senior Consultant

We have all managed procurement travel projects where there is a significant interest in the outcome of the project. What supplier will be chosen? Why was a particular supplier awarded the contract? And many times, you have competing interests that can bring the project that you think is going great to grinding halt. If only you could have a magic genie right at that moment!

Unfortunately, most projects don’t imitate fairy tales, meaning you will have to look for other ways to do the near impossible – satisfy your stakeholders and work towards common goals. Thankfully, using category management practices and tools can assist you in reaching your objectives and breaking down the barriers that exist along the way.

Category Management Overview
Let us begin by defining category management using the graphic below:

Screen Shot 2016-06-27 at 3.14.24 PM

Category management generally does not have a single definition, but here we will define it as:

  • Disciplined approach to view a discreet area of spend holistically
  • Cyclical by nature, given dynamic changes in the business and marketplace
  • Step process using a collection of tools/methods to deliver a competitive advantage
  • Foundation embracing different thinking to gain better and more strategic results

The travel category is a discreet area of spend that has many needs and opportunities, including its sub-categories: Air, Hotel, Strategic Meetings Management Program (SMMP), Ground Transportation, the Travel Management Company (TMC), Corporate Cards, and Expense tools. These sub-categories can be looked at independently to focus on smaller areas of spend when required.

Tool #1: Category Plan
To help organizations define their strategy, category managers frequently develop a category plan, which encompasses the elements defined in the above graphic. This plan becomes a living document, which serves as a guide to the long and mid-term strategy of the category. Turning the plan into actionable items utilizes the tools that every category manager has in their toolkit, and can be customized to fit the purpose and objectives of any procurement project.

Tool #2: Business Requirements Analysis
One such tool is the business requirements analysis. To help organize the requirements many categories managers can use the application of AQSCI (Assurance of Supply, Quality, Service, Cost and Innovation) as shown:

Screen Shot 2016-06-27 at 3.14.39 PM

Assurance of Supply is at the foundation of the illustration, with the differentiators at the top. Below are a few key requirements for each of the five aspects of the AQSCI as it applies to a service or good being sourced:

  • Assurance of Supply – Guaranteed availability of regulatory compliant services or goods
  • Quality – Quality design of processes and reliability
  • Service – Response times, call centers and quality staff assigned to client account
  • Cost – Current and future requirements, reduction or cost avoidance, and transparency
  • Innovation – Use of leading technologies and market driven innovation

This application is a great way to gain a deeper understanding of business strategies and drill down on the organization and category-specific customer needs. If done collectively with the category and the travel manager, it can provide great insight into each individual’s objectives and goals. While this may be some of the hardest work for the team, the benefits are many, because you are building a foundation in the development of the Service Level Agreement, increasing stakeholder support for the category strategy, and providing the basis for the RFP.

While having a magic genie isn’t possible, achieving common stakeholder goals and objectives is! Practicing the category management methodology, building a long-term category plan and using the category management tools, including the application of the AQSCI, can go a long way to bridge the gaps in stakeholder interests and get the project back on track.

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