Travel Procurement Outsourcing Continues Despite Negative Perceptions

Image via Flickr by Hunter-Desportes

The term “outsourcing” usually brings to mind negative images including loss of control over key processes and lowering morale within the organization. However, businesses continue to outsource their travel procurement on a large scale, and new research tell us this is not likely to change anytime soon. In fact, many professionals in the industry are speaking out in defense of the practice.

In 2012, the travel procurement outsourcing market grew between 10 and 15 percent. This growth came on the heels of a 15 percent growth during the previous year. In 2012, the market reached $220 billion in client spending. A survey conducted by Procurement Leaders in conjunction with Capgenini of 190 senior procurement executives found that almost half (49 percent) of executives expected to increase their travel procurement outsourcing, 38 percent expected to see no change in how much work they’re outsourcing, and only three percent expected the practice to decrease.

Officials from the outsourcing firm Procurean recently contacted the media to report that their total client travel and entertainment spending had passed the $1 billion mark. Their top rivals, IBM and Accenture, are also experiencing strong growth. High level executives from these companies do not feel that the negative perception is warranted. In fact, one executive stated that the industry faces one-third positive perception and less than half of companies which have a negative perception of their services.

Still, the fence is split. Many executives feel that outsourcing and an internal travel management team cannot coexist together for very long. Inevitably, the internal travel manager will lose her job and the outsourcing company will take over the work. However, Porcurean and its competitors insist that most of their clients do keep their internal travel management teams in place over the long run, and the outsourcing team merely becomes their assistant.

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