Op Ed: Bryan Holmes On Next-Gen Corporate Travel Service Level Agreements And KPIs

Consultant Bryan Holmes dissects the components of thoughtful service level agreements in corporate travel management company relationships. Imagine you are a doctor faced with a patient exhibiting puzzling symptoms and debilitating pain. In this critical moment, where effective decision-making is key to relief, you would turn to a blend of clinical evaluation (gathering symptoms) and a range of tests (gathering data) to diagnose the ailment. This integration of observation and data is universally trusted in medicine for improving and saving lives. Similarly, in the realm of corporate travel, adopting a balanced methodology is essential. By designing thoughtful service level agreements (SLAs) that mirror this approach, we can alleviate traveler “pain” and better optimize travel programs. Building on this medical analogy, effective SLAs in business travel should mandate the measurement of both outcome-based and process-based key performance indicators (KPIs). Outcome-based KPIs in business travel, akin to a doctor evaluating a patient’s overall health, focus on end results such as traveler satisfaction and cost savings. Meanwhile, process KPIs, similar to diagnostic tests, gather essential data on operational efficiency. In the corporate travel context, these could include metrics evaluating the speed and accuracy of booking processes, ensuring travelers receive prompt and correct support during their journeys. Just as doctors don’t rely solely on either symptoms (outcomes) or data from test results (processes) — but rather integrate them — in SLAs we must combine outcome-based and process-based metrics to create a cohesive whole and gain comprehensive insights.

The Nuances Of Process-Based And Outcome-Based KPIs

While this idea of a holistic view into a travel program sounds good in theory, issues can arise in practice. For example, many travel managers argue that process-based KPIs, like average speed of answer (ASA), fail to fully encapsulate the traveler experience. They may suggest that a hurried agent interaction might meet ASA criteria while sacrificing traveler satisfaction — and they are right. Conversely, a travel management company (TMC) might argue that certain outcome metrics unfairly penalize them for issues beyond their reasonable control. Consider how harsh winters distort scores. Despite a TMC’s heroic support with handling disruptions caused by weather, negative traveler feedback might tell you more about the travel industry than your TMC. This underscores the argument from TMCs that tying incentives to ambitious outcome measures isn’t reasonable — and they are right.

Recalling my experience as a former travel manager at Broadcom, I often faced situations where temporary fluctuations in agent coverage led to dips in our ASA performance. These short-term declines did not immediately impair our traveler satisfaction scores. Nonetheless, if our ASA had continued to flounder, this surely would have eroded traveler satisfaction over time. These insights from both travel managers and TMCs highlight a common pitfall: the tendency to over-rely on one type of KPI while failing to effectively connect process- and outcome-based metrics. A more strategic approach is to not just balance, but rather integrate these KPIs, recognizing their critical interdependencies within the service delivery chain. For example, pairing process indicators like call response time with outcome metrics such as Net Promoter Score (NPS) offers a more comprehensive view. This integrated approach can uncover underlying issues, such as inadequate staffing or insufficient training, which might impact traveler satisfaction. Conversely, a decline in traveler satisfaction despite stable process metrics suggests the need to explore other factors, like recent user interface changes or wider industry shifts. This method ensures a more dynamic and responsive SLA framework, better aligned with the complexities of corporate travel management. Intriguingly, as we delve into mapping the service delivery chain and selecting appropriate metrics, we uncover an emergent KPI. This KPI uniquely resides at the intersection of process measures and outcome indicators. It’s a hybrid metric, transcending the boundaries of being purely procedural or solely perceptual. This metric offers unparalleled visibility into the complex interplay between operational systems and traveler sentiment. The following section expands on the nature and implications of this novel metric.

Emerging KPIs And Communication Channel Considerations

Just as the advent of genomic sequencing in medicine is revolutionizing patient diagnosis and treatment, so too is the landscape of business travel undergoing a significant transformation. With the introduction of modern communication channels like chat, including AI-enabled chatbots based on large language models, we find ourselves at a juncture where new metrics are needed, heralding a more nuanced approach to measuring and managing traveler interactions. “Channel switching” emerges as a pivotal metric in business travel. It measures when travelers transition between different communication channels. For instance, a traveler frustrated by chat miscommunications with an agent might choose to pick up the phone and call another agent, thus switching channels. This channel switching concept offers valuable insights into potential traveler pain. By encouraging TMCs to incorporate channel switching metrics into SLAs, buyers and their TMCs can gain deeper insights into a crucial aspect of traveler friction. This metric helps identify when a specific communication line needs more attention from the TMC. Alongside foundational metrics like ASA and traveler satisfaction, integrating such emerging KPIs based on the expanding communication lines enables a more comprehensive analysis of the travel program.

Negotiation Reluctance And Margin Considerations

In SLA negotiations, understanding how KPI management affects TMC margins is key. When TMCs hesitate to pledge rigorous process-based KPIs, buyers should take note. Such reluctance may signal the TMC lacks faith in its service delivery, or it could indicate the TMC is actively managing staffing allocations below what the client would desire, all in an effort to protect its own financial performance. This is critical. By modulating process-based KPIs outside of the view of the travel buyer, TMCs can control margins, trading metric performance for profit. As such, customers should wield SLAs to compel accountability and financial transparency from their TMCs. Importantly, when negotiating contracts, only process-based KPIs should trigger financial penalties for underperformance. Meanwhile, outcome-based metrics should be tied to visibility protocols, enabling buyers to set more ambitious satisfaction targets. Without the risk of penalties, TMCs are more inclined to agree to elevated outcome goals. For these traveler satisfaction metrics, the contract should outline an escalation protocol and require a good faith effort by the TMC to review and collaboratively address dips. This balanced approach helps calibrate accountability between operational metrics under the TMC’s direct control, without losing sight of aspirational traveler satisfaction metrics prone to external variability. Aligned visibility protocols and collaborative target-setting further strengthen the governance model to optimize the traveler experience.

Next-Gen SLA KPIs For Effective SLA Management

Having explored strategic considerations for managing KPIs within SLAs, let’s examine practical applications. The following tables present suggested process and outcome metrics across three areas: online booking, offline services and overarching travel program management. They serve as a model for travel managers and TMCs to visualize effective, balanced SLAs tailored to their unique priorities. Online Booking KPIs

* Classify as an outcome KPI without penalty if using a third-party online booking tool Offline And Agent-Assisted Booking KPIs

After reviewing these KPIs, it’s important to consider some notable program variables. Firstly, when after-hours or VIP services are segmented, the same offline metrics should also be partitioned accordingly. This ensures a more precise and targeted analysis of service efficiency and quality. Additionally, the categorization of KPIs as process- or outcome-oriented is often fluid, shaped by contract structures. For example, in a per-trip contract model (as opposed to a per-transaction model), a paradox emerges. The position of process metrics like touchless transaction rate becomes complex; each agent interaction, while enhancing traveler support, also adds to operational costs without extra revenue in a per-trip charge model. This creates a dizzying situation where the TMC might deprioritize maintaining high performance in process KPIs, such as average speed of answer, indirectly encouraging travelers to opt for online solutions. Consequently, this leads to an intriguing KPI migration: a traditionally process-focused KPI, such as touchless transaction rate, transitions to become an outcome-oriented KPI that sits downstream of process KPIs. This change in the landscape of KPIs can have significant effects. While touchless transaction rates might decrease, this could be at the expense of traveler satisfaction. This scenario highlights the critical need for travel managers to thoughtfully analyze all KPIs, understanding how each one interacts within the broader operational context. A one-size-fits-all approach simply doesn’t fit. Ultimately, it’s the savvy orchestration of these diverse and sometimes dizzying elements that determines success, with every decision influencing the delicate balance between TMC service quality and financial performance.

Thoughtfully Designed SLAs For Next-Gen Travel Programs

Just as physicians carefully diagnose and treat patients to ensure their health, well-constructed SLAs underpin the health of modern travel programs. A deep understanding of the nuanced interplay between process and outcome metrics is essential for travel managers seeking a holistic view of performance drivers. Furthermore, the judicious application of a balanced KPI framework refines TMC partnerships. It’s not just about reducing traveler inconveniences; it’s about the ongoing modulation of a system that continuously elevates traveler satisfaction. Anchored by robust SLAs that are meticulously tailored to align with program priorities, travel managers can confidently navigate this dynamic landscape, ensuring the sustained well-being of both their travelers and the broader travel ecosystem. This Op Ed was created in collaboration with The Company Dime‘s Editorial Board of travel managers.