IDC consolidates travel in-house

IDC consolidates travel in-house

The Industrial Development Corporation of South Africa (IDC) recently launched its own dedicated travel company to cater for its travel needs and those of its three subsidiaries. Debbie Badham speaks to head of department: support services, Busisiwe Khumalo, and corporate travel manager, Maureen Masuku, about the logistics of bringing travel in-house.

THE idea to launch IDC Travel, a dedicated travel office to serve the IDC and its three subsidiaries – Foskor, Sefa and Scaw Metals – was brought about by the alignment of several different critical factors.

At the same time that the IDC entered its tender process to bring on board an external TMC, it also became evident that the amount of travel being booked by Foskor Travel – a travel and procurement department that was launched in early 2012 to handle the subsidiary’s travel requirements  – was not sufficient to warrant its Iata licence, which it received in February last year.

Foskor, which was previously the only one of the four companies falling under IDC’s banner to have its own Iata licence, was previously awarded the licence through the determined efforts of Maureen Masuku, who headed Foskor’s travel procurement at the time (see Travel Buyer’s June 2013 profile). When it became evident that Foskor’s licence was not being put to optimal use, IDC began to engage with Foskor, Sefa and Scaw Metals about the possibility of consolidating their travel services.

“We began to question what the outcome of combining all our travel into one complete programme would be,” says Busisiwe Khumalo, who heads up IDC Travel. Significant engagement between the four companies took place, resulting in an IDC exco decision to launch IDC Travel.

Khumalo notes that any change brings a certain amount of discomfort but adds that those at the company were confident they were embarking on the right course. The IDC set about analysing the travel programmes belonging to other corporates, noting their success stories and creating a benchmark accordingly.

The result was IDC Travel – a dedicated travel team of eight, which is based at the IDC’s head office in Sandton. Each subsidiary has its own dedicated consultant, who all report back to Masuku, who then reports directly to Khumalo.

The merge

Aside from having to adapt to the biggest change (i.e. from previously relying on an external TMC to handle travel requirements and now handling all travel in-house), a number of other changes resulted from the introduction of IDC Travel.

Most significantly, where IDC and its subsidiaries previously made use of different suppliers, this has now been consolidated so that all four companies are now required to use specific suppliers. The challenge was that where subsidiaries had acquired VIP status with certain preferred suppliers, they now had to shift to others, where they didn’t have the same status.

The upside is that, having consolidated its travel spend, IDC Travel is now able to negotiate better deals with suppliers. In fact, the transition has enabled the company to place far greater emphasis on enhanced service and cost-saving.  “Our mission has been to ensure we attach value to every cent spent,” says Masuku.  

She adds that there remains room for growth, with the potential to incorporate other subsidiaries and company partners into the travel programme. “What’s more, the bulk rates we acquire from our corporate travel bookings can be enjoyed by staff when they book their own leisure travel.”

Bulk rates are not the only advantage of IDC now having its own Iata licence. The company is also able to earn commissions directly and has the opportunity to form greater relationships with its suppliers. “As IDC Travel belongs to the IDC, we now own our travel policy, giving us far better control of our programme,” Khumalo says.   

The transition  

IDC’s first and greatest challenge was the acquisition of quality consultants. Khumalo says the company was determined to pull together a team consisting of the best in the industry. “The problem was that some of the individuals we had identified to join our team were already locked into long-term contracts and our date of implementation was looming.”

IDC’s determination paid off and the company managed to assemble a team that, together, has a wealth of experience in the travel industry, says Masuku. “There is a great sense of accountability and ownership among our team members.”

Another challenge was getting buy-in from the subsidiaries, which naturally experienced some discomfort from the ensuing changes. “It is for this reason that, for the first six months of the travel programme’s implementation, we decided not to implement any drastic changes and to use this time to continuously engage with and educate travellers.”     

As far as back-office operations are concerned, a number of adjustments were necessary. Where the IDC would previously have received its reconciled travel reports from its TMC, input these into its systems and create management reports, it now had to incorporate the reconciliation process into its systems.

While Khumalo reveals that this has slowed the pace at which IDC’s travel management is able to process reports, she says it is merely a case of adapting. “Further engagements to assist with that side of our operation are taking place and we are optimistic that we are going to get there,” she says.  

The improvements

Presented with the opportunity to create new group policies, the IDC has taken the opportunity to improve specific programmes. “We specifically wanted to improve our service level, part of which has entailed creating one centralised number that employees can call to make their travel arrangements. We then installed a system that allows us to track consultants’ calls with employees via a central screen so that we can monitor as well as mitigate where there could be potential challenges,” says Masuku.

“Then in cases where we see a particular travel request is taking longer than it reasonably should, we can  intervene and assist the consultant in question,” adds Khumalo. “We can also ensure that there are no travel requests left unattended to.”

Both Khumalo and Masuku feel that this is a particularly innovative feature of IDC Travel’s programme, noting that they have not come across such a system in any other travel programme.    

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