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Case Study

Outsourcing

Background

‘Company D’ is a privately owned provider of design, engineering, construction and excavation services to the Australian mineral and construction industries.

With an annual travel spend of $800k, Company D began outsourcing its travel activity for the first time with the aim of reducing expenditure and increasing internal efficiencies. RTM was selected as the company’s travel management provider of choice.

Objectives

To achieve min. 10% travel savings through outsourcing to a professional TMC

In outsourcing to a professional TMC, Company D’s key objectives were to:

  • achieve minimum 10% travel savings through outsourcing
  • report real-time data on travel activity and costs to the Executive Management Team and Board
  • increase internal efficiencies
  • provide a consistent point of contact for travel bookings and administration

Road Blocks

In migrating the company’s internal travel booking processes to an external provider, RTM encountered and addressed a number of challenges. These included:

  • the false perception that outsourcing would increase costs
  • a general resistance to change from staff

Solution

After a detailed analysis of Company D’s existing travel practices, trends and expenditure, RTM was able to implement the following solutions to best achieve the client’s goals:

  • the negotiation of discounted airfares through preferred supplier agreements with two key airlines, representing an average 10% saving per sector
  • the implementation of an Online Booking Tool and pre-trip approval process to maximise efficiencies and compliance
  • a dedicated travel consulting team for reliable and accessible support
  • introduction of regular consultation and sharing of statistical data with the Executive Management Team and Board to foster top-down buy in

Result

12.5%* reduction in travel expenditure

with a profit to fee ratio of 2.7:1

26k** saved in internal staff efficiencies

by outsourcing to a dedicated TMC and implementing internal procedures such as a Pre-Trip Approval Process and Online Booking Tool

Quartlerly reporting established

including industry benchmarking to highlight additional potential savings opportunities

A dedicated consulting team

and After Hours Support Team providing 24/7/365 access to bookings, reporting and administration

By combining RTM’s wealth of industry experience, leading edge technologies and professional expertise, RTM was able to achieve and exceed all of its client’s objectives.

* 12.5% cost saving based upon first quarter results
** $26k cost saving based upon projected annual salary savings as a result of increased efficiencies achieved during the first quarter