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Article Excerpt
Procter & Gamble's recent decision to outsource travel management to IBM is the latest of several developments in which companies large and small use external, non-agency resources to leverage travel services and expand purchasing opportunities.
From Lucent Technologies' decision in 2000 to entirely outsource travel management to Alliente, to Hewlett-Packard sharing travel services and contracts with one of its spinoffs, these non-traditional configurations often are prompted by unrelenting cost pressure. Nevertheless, reliance on other firms for travel management has produced varying results.
Meanwhile, despite failed attempts among buyers to enter into collective bargaining arrangements, such smaller companies as Tokyo Electron, International Sematech and others are aggregating volumes to increase buying power--attempting to overturn what is considered a taboo among vendors.
Procter & Gamble last month announced that it is outsourcing travel, expense management and relocation services, among other functions, to IBM through a 10-year, $400 million agreement. IBM will support upward of 98,000 Procter & Gamble employees in 80 countries, with 800 P&G employees to be offered employment with IBM's team. P&G will maintain its "overall strategic direction," and all travel management employees will be retained or transitioned to IBM, a P&G spokesperson said. IBM on Jan. 1 is expected to take the...
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