Overview:
Very large buyer with nearly $500 million in annual airline spend and a presence in over 60 countries around the world. Buyer works with multiple TMCs around the world, ranging from mega-TMCs to local market agencies. Client had limited data consolidation globally and little insight into contract value and performance, outside of at a regional or local level.
Approach:
Immediately began global contract gathering process and initiated discussions with the client’s larger TMCs. This initial effort achieved coverage of approximately 36 countries and 71% of global spend. Over the next 12 – 24 months, continued data and contract gathering efforts yielded another 18 countries covered and 22% of spend, bringing total coverage to 54 countries and 93% of net spend. The team’s goal is 100% coverage in the next 12 months.
Results:
These efforts enabled the client to undertake its first ever truly global RFP, generating in excess of $5 million in incremental savings per year. In subsequent years, the procurement team saw an additional $1 – 2 million related to visibility of new opportunities to expand existing deals or enter into new ones. The global team can now leverage volumes in its larger territories to procure more favorable pricing and goal terms for the smaller territories. Buyer now holds both regional and global QBRs to discuss and review contract performance and opportunities and views its airline vendors as strategic partners. This visibility to ongoing consolidated data has also enabled the client to move away from the necessity of bi-annual airline RFPs as they now can capture opportunity savings as they present themselves, mid-contract.