Finastra travel leader Mauro Ruggiero is taking a dynamic approach to keeping his travelers in the air. The U.K.-based financial technology company, a client of BCD Travel and Advito, is swapping the traditional air RFP process for a Dynamic Program ManagementTM sourcing strategy. He expects to save time and money.
Ruggiero is asking airlines for contracts without expiration dates. He and the carriers will tweak the terms, as needed, during quarterly reviews.
Dynamic sourcing opens the door to more savings
Recovering the time spent on the RFP process drove the innovative approach, Ruggiero told Business Travel News. “The RFP process is quite cumbersome and very inefficient. The length of time to get it done was a big pain point.”
Advito’s Olivier Benoit said the traditional air request for proposals process also erodes savings. “A dynamic approach is to be constantly renegotiating and providing more incremental savings,” Benoit explained in the BTN article. “Even one month after a program has started, you can identify elements that could be better.”
RFP cost-cutting opportunities decline
Advito calculations show that a corporate air program that uses a dynamic approach to sourcing benefits from 50% higher savings than a program reliant on RFPs, Benoit said. He estimates the average incremental savings from RFPs to be about 1% today, a percentage point lower than it was two years ago.
Focus on partnership
Ruggiero said dynamically managed air contracts better fit Finastra’s project-based business (top traveler destinations shift all the time), and the approach aligns with the way he likes to do business. A quarterly review should be “about how we’re helping each other, rather than just, ‘Here’s what we’ve done,’“ he said.
“I like to treat the vendors I use as partners,” Ruggiero said. “The goal is to create a win-win environment for both sides. If you have a true partner relationship, you should be talking to them anyway.”