Russ Howell, BCD Travel’s executive vice president of Global Technology, says there’s a lot of chatter in the marketplace about how travel management companies handle technology. “Customers ask: Do we build or buy our technology solutions? The answer is we do both, and that allows us to be agile in meeting customers’ needs.”
Let’s start with a little background. What has led us to the build-versus-buy conversation?
In the 1970s, ‘80s and into the ‘90s, TMCs built many of their own tools to deliver on quality-control requirements, reporting, online booking capabilities and other vital functions. But more recently, that’s changed as the managed travel and general technology marketplaces evolved and technology specialists entered the market. Today, TMCs have options they’ve never had before. They can choose to build technology, buy it—or do both. The right strategy can hinge on lots of factors, including a TMC’s own technical maturity, capital requirements and whether their clients need a national, regional or global footprint.
What’s BCD Travel’s position?
Well, first of all, we’re a travel management firm. We’re not a technology-only company or a security firm or VAT reclaim specialists. We’re known for our skill at providing, adapting and integrating the right services and tools for each client. We also have a long and successful track record of prioritizing the right things to deliver maximum value to our customers. When it comes to technology, we deliver capabilities to our customers in three ways: proprietary offerings, customized third-party tools and configured third-party tools.
Explain the strategy behind proprietary offerings.
Proprietary means that we build it and maintain it ourselves or we pay a third party to do that for us. If it’s the latter, we don’t allow that vendor to sell the technology to others in the market. So, it’s ours—totally ours. You’ve got to remember that proprietary offerings are quite capital-intensive. It takes a lot to support a proprietary tool throughout its lifetime—so we pick our proprietary targets carefully.
What are some examples of proprietary technology?
We’ve invested in the development, ongoing improvement and maintenance of key tools like DecisionSource®, our business intelligence solution. DecisionSource, which we built and are now enhancing though our relationship with MicroStrategy, is an essential part of our customer relationship. Over the coming months you’ll hear more about our ongoing investment in DecisionSource as we introduce new business intelligence capabilities.
In addition, we’ve engaged a team of mobile travel experts to build TripSource®, our mobile app. Because we will own this important distribution channel, we’ll have total control of that aspect of our service delivery and can make it distinctive. The mobile app will integrate a variety of third-party services or capabilities, such as FlightStats, to provide a compelling package.
It‘s important to note that even proprietary offerings have ‘industry standard’ underpinnings from major technology players. This is true of almost any proprietary offering in our industry. Some of the underlying technologies we use are provided by firms such as Microsoft, Oracle, MicroStrategies and SAP.
Tell us more about customized third-party tools.
We often work with specialist companies to customize or adapt great third-party tools for our use. Their developers might add features that are uniquely ours, or we might layer on unique workflows that provide the information or outcomes our customers require. We don’t own the tool, but the customization is uniquely ours, and that gives us a capability that is advantageous. COMPLEAT is our mid-office automation software, and it’s a great example of a tool that we customized with our own collection of routines and workflows. So, in the end, we use in unique ways. Our value lies in the way we use these tools on behalf of clients. Our competitors who use the same tools sometimes claim that their offerings are proprietary. They just aren’t.
What about configured third-party tools?
We have lots of third-party tools that are simply woven into our service mix — without software customization. Online booking tools, PI Benchmark (multisource data consolidation), and Taxeo (VAT reclaim) are good examples. We may wrap them up with unique services or use them in distinctive ways, but the software is available to anyone. The vendors we choose to work with are experts in their fields, with experience that often goes beyond the travel industry. Our deep knowledge of these third-party tools, our relationships with these vendors and our vast experience in operational integration allow us to match our clients’ needs with the best solutions on the market. That reinforces our value as a trusted adviser, able to make recommendations from a broad base of possibilities.
How do you decide which technology strategy is the right one for a particular situation or client?
In the end, our decision to build or buy a technology solution hinges on whether the functionality reflects one of our core capabilities; how quickly we can get it to market; how much time it would take to maintain a proprietary tool; ongoing innovation in the market; and our investment priorities and requirements. When we choose to buy, our partners invest in developing and maintaining the technology, and we put our capital into integrating it and bringing solutions to life for our clients.
Why is there so much talk these days about build versus buy?
Our competition is talking about it and drawing some erroneous conclusions. For one thing, the technology some of our competitors claim as ‘proprietary’ is really third-party technology customized or configured for their use. In fact, other TMCs—including us—may use the very same third-party technology that underlies these so-called ‘proprietary’ tools.
Some competitors also assert our capabilities are inferior because all of our solutions aren’t proprietary. But logic and history are on our side when it comes to our technology strategy. Most of our clients, after all, rely on third-party applications for their own non-core functions and use third-party technology for functions like payroll and HR administration. We’ve learned lessons by observing what’s happened to other TMCs that made multi-million dollar investments in proprietary technology, only to abandon the tools when the market surpassed them or they became too costly to maintain. Any client should respect our ability to learn from competitors’ missteps.
How does BCD Travel’s technology strategy help meet client needs?
Our build-and-buy strategy gives us extraordinary flexibility. We don’t need customers to fit into any rigid box. Instead, we listen to what clients need and respond with targeted solutions. Our client base spans every shape, size and need; their requirements and expectations are constantly on the move. Our solutions have to be as well. By working with a mix of technologies and multiple vendors, we’re equipped to offer the best solutions in the market, geared to each customer’s needs.