Multinational taste and nutrition company Kerry Group
employs 24,000 people in 140 countries and, according to its most recent annual
report, realized 6.1 billion euros in revenue in 2016. It wasn't always that
way. The North Kerry Milk Products cooperative started 40 years ago with just
40 employees. Since then, it has acquired more than 100 companies, diversified
its offerings and gone public. It has established innovation centers not only
in Ireland and the U.S., the home countries of its founders, but also in
Africa, Eastern Europe, South America and Southeast Asia.
Olive Kavanagh entered the organization in 2015 as part of a
global unification strategy that executives called 1 Kerry. The initiative
aimed to unify the company's diverse interests and streamline operations, data,
branding and culture. Kavanagh joined as part of a group of six global buyers
focused on transforming direct and indirect spend categories. As a veteran of
Microsoft's travel management team, Kavanagh brought sophisticated supplier
strategies and deep operational knowledge to rebuild and globalize Kerry's
midsize travel program.
Within days of starting, "I was sitting in front of the
CEO, senior executives and business presidents," Kavanagh said. She
relished that strategic position. "I quickly understood their wish list in
terms of gaining efficiencies and standardizing the program, but I was also
expected to bring innovation to the table with every partner."
Wish Lists
Executive stakeholders wanted visibility into travel spend.
They wanted periodic reports to help them manage budgets. "There was a lot
of work to do on the data side," said Kavanagh, noting that much of the prior
reporting had been ad hoc and relied on incomplete or inaccurate data sets.
Even those in the corner office, though, focused on
travelers themselves. "We had a lot of conversations about the traveler
experience," said Kavanagh, including its effect on recruitment and
retention. Those conversations motivated Kavanagh to begin her journey with a
traveler survey, which the company had never done. "There had been TMC
surveys but nothing to capture a holistic view of the program," she said.
Without that view, Kavanagh knew her change management strategy would be less
compelling.
She asked about travelers' perceptions of travel policy;
their experiences with existing corporate travel technologies; whether they
knew who to contact in an emergency; what resources they used to answer
questions about how to travel on behalf of Kerry. Each inquiry came with
multiple-choice responses, but Kavanagh also offered travelers open-ended
questions about their top three wishes.
The results were not entirely surprising: When travelers
needed to know something, they asked more senior colleagues because there was
no clear line to a travel manager. Many believed policy required them to go
through the travel management company for flights but not for hotels.
Colleagues counseled that they should use online booking for certain content
but they'd need to go elsewhere to find other information. Few travelers knew
what to do in medical situations or emergencies, even though Kerry contracted
with International SOS.
The survey showed positive aspects, as well. "We got
great feedback about the agency and the agents," said Kavanagh, adding
that Kerry had a 19-year partnership with BCD Travel in North America and a
shorter relationship with FCM in Asia/Pacific. On the downside, travelers complained
that the Concur online booking tool was clunky and the results did not make
sense. They also wanted mobile technology, which Kerry had not adopted for
travel, and "like most corporate travelers, they complained that rates in
the corporate tool were more expensive than those they could find on the
leisure market," said Kavanagh.
Basics & Beyond
Kerry's loosely formed travel program reflected the company's
growth by acquisition: Disparate agency partnerships led to different
strategies in different regions, and no travel manager was tasked with bringing
the pieces together. In North America, for example, BCD Travel negotiated air
and hotel contracts on behalf of the region. In Asia/Pac, FCM Travel Solutions
had only just started to negotiate volume deals. In Europe, the company
contracted directly with suppliers despite partnering with BCD. The disjointed
approach caused Kerry to miss contract targets for certain suppliers and also
led to a few unmanaged contracts, some of which were never implemented.
Globalizing the travel program was methodical for Kavanagh.
She scoured the TMC data, credit card data and expense data to ground herself
in frequent city pairs and locations where Kerry could negotiate volume hotel
deals. Old air contracts revealed, at the minimum, the volume thresholds Kerry
could not meet. She also switched from a management fee model with her TMCs to
a transaction fee model, and she negotiated hard to minimize those fees.
To optimize airline deals in Year One, Kavanagh removed one
of Kerry's joint-venture partners from the playing field, increasing market
share for the remaining two. To keep travel program benefits competitive with
Kerry competitors', she introduced a coherent business class eligibility
policy, making the overall air package more attractive to partners. She struck
two-year agreements at thresholds she was confident Kerry could achieve.
Those were the basics, but she'll be looking for more next
time around. "Our contracts will come up this year," she said. "We
will be having very different conversations with the carriers than we did two
years ago."
What excites Kavanagh is the innovation she brings to the
table. "I came from a very mature program. I was eager to show what a
difference I could make," she said, and she did not accept the assumption
that a midsize program wasn't ready to step up its game.
"Suppliers were sending account managers to me who
couldn't even talk the language," said Kavanagh. She sent them packing. "I
swapped out 95 percent of my account managers. I asked for the people I wanted,
and I got them. Why shouldn't Kerry Group have a traveler experience and
program that is as sophisticated as a $1 billion program? We should. The size
of the program is irrelevant."
Kavanagh broke away from "a lot of legacy stuff"
as she globalized the hotel category, contracting with hotel solutions provider
HRS. "Kerry is not in typical business locations. We are just outside of
those markets, so our need for independent properties is high," she said.
Access to independent properties is a strength HRS has over traditional global
distribution systems, whose higher fees can restrict participation by
independent hotels.
Kavanagh had to deliver content at the most competitive
rates and with the best benefits for the program. In markets with at least 250
room nights annually, Kavanagh sourced strategic hotel partners, about 230
hotel partners globally, both large chain properties and independent. She also
analyzed HRS's best-available rates for locations where Kerry booked 50 to 250
nights to see if there was value in negotiating, given the lower volumes.
Kavanagh concluded that it didn't make a difference, and she wanted travelers
to access the broader content. "I could either spend the next three years
trying to get people into the program, or I could give them the content they
want," she said. "This way, I get the same savings and it's simple
for employees."
Going with HRS opened other benefits, according to Kavanagh.
First, the commissions pass-through terms were more transparent with HRS than
with previous TMC partners. Second, the hotels no longer had the distribution
cost, "so we wanted to see that reflected in our rate. They engaged in
that conversation with us," said Kavanagh, noting that the returns on these
hotel deals allowed her to reinvest funds in her program.
Likewise, Kavanagh tapped deeper strategies with all her
supplier agreements to help fund her program initiatives. Her TMCs and other
partners agreed to early signing bonuses and back-end rebates for achieving
target thresholds. TMCs reached into technology funds to deepen the
relationship. BCD also kicked in services from its consulting firm, Advito, to
help Kavanagh with the upfront data analysis for her global airline sourcing.
Kavanagh would need those returns to support additional transformation plans.
"You never want to walk in the door at a new job and
ask for more funding to drive your program goals," she said. "I didn't
leave anything on the table."
Technology, Technology, Technology
Kavanagh heard over and over from her travelers: "Why
is the technology so clunky?" She knew the Concur booking tool wasn't up
to the standards of leisure sites, but "Microsoft had deployed Concur in
numerous locations globally and I knew that it should be working much better
than what the travelers were describing to me."
She took the case to Concur, but the company was slow to
assist. Ultimately, she engaged third-party consulting firm Opteva to assess
the issues and looped in BCD Travel for a 120-day global reimplementation. "We
have three sites—Europe, North America and Mexico—and while we knew there would
have to be certain local nuances, we wanted to provide all travelers with a 1
Kerry experience." After 120 days of discovery and strategy, Opteva spent
a weekend reprogramming the Concur tool.
The traveler response was immediate, according to Kavanagh.
Online booking adoption in North America jumped 14 percent. And the complaints?
They dropped to nearly zero.
"The tool had been badly implemented in the first
place," said Kavanagh, plus Kerry had not run updates or refreshes for
more than two years. "You can't do that with technology," she noted.
Kavanagh established a travel technology refresh program and supplier
performance metrics.
Always Pushing for More
Mobile support was a big technology gap for travelers, as
well. After researching four providers—BCD TripSource, Concur, HRS's hotel app
and Roadmap—Kavanagh is leaning toward TripSource; she expects BCD to integrate
more third-party technologies, even if some compete with its own solutions.
Kavanagh also is piloting hotel personalization app Conichi and ridesharing
provider Groundscope to see where next to push innovation in the Kerry travel
program. Starting in March, Kerry will pilot HRS small meetings solution
Meetago.
"I'm always willing to try new things," said
Kavanagh, adding that she wants to help suppliers launch innovative solutions. "If
suppliers are not presenting innovation as part of our reviews, I actually get
concerned."
Even as she drives innovation, she knows it doesn't count
for much without a solid foundation and tight data for accountability. "Our
data is second to none now," she said, noting that she delivers monthly
executive dashboards in Microsoft Power BI to the executive set and provides
both high-level and drill-down details.
"It's amazing where we've come. We've been able to show
how the behavior changes made in 2017 are directly reflected in the P&L.
Therefore, the business presidents have committed to real targets in advanced
booking and internal trips. I've never seen... business presidents entertain
those discussions," she said.
Kerry Group has actually increased its rates of
travel—without increasing spend. That's a big check on the executive wish list.
Travelers got their wish list covered, as well. "I
returned the original survey results to them with notes about how we've
addressed their high-priority issues," she said. She also asked them in a
follow-up whether the travel department met their expectations with the program.
The feedback? "We did."