Thanks for coming this far. As part of this 3 blog post series, this is the second blog post where we’ll be covering two more problems.
In the previous blog post, we covered TWO big problems — 1) travel companies and travelers spending too much time on manual unproductive tasks, and 2) Non-standardization of GDS PNR and Passive Segments. If you missed reading this post, I strongly recommend you read it first here.
Let’s get started
I was at a family New Year party on 31st Dec 2016 when my cousin mentioned the worst booking experience he had while booking from Seattle to Mumbai to come home for holidays on an internal Online Booking Tool (OBT) which every employee was supposed to use for booking business trips. He was a child prodigy who had scored some 200-odd rank in IIT-JEE (India’s toughest engineering entrance exam, kinda like SAT for the world) and was working as a Software engineer for a Fortune 50 company.
I was immediately intrigued because I thought to myself, ‘If a Fortune 50 company was using an OBT and millennials are having unhappy experiences using it, I immediately gotta know everything about it’ — This is where sometimes the biggest ideas could come out from.
In the middle of the party, I dragged him to open his laptop to share the problems he faced on the OBT, and I was appalled. The first thing I noticed was the overall design and user experience being so ugly, chaotic, and enterprisey. At the same time I noticed the kind of features, functionalities, and depth it had to allow large enterprise companies to manage business travel at a huge scale (think grade/department wise travel policies, approval workflows etc), which was definitely admirable. I thought apart from the design problem, they’ve absolutely killed it by being a SaaS based cloud-driven OTA (for business travel) which allows large companies to book and manage business travel at scale.
I started talking to more folks working at large companies who are using such OBTs, to understand the pain points deeper, find other similar products and if there was an opportunity to build something significantly better that solves a big burning problem.
The market leader today is Concur which still has over 85% global market share in the OBT space among the Fortune 50 and Fortune 500 companies. They have a very comprehensive Expense Management Tool which ruled the last 2 decades in the enterprise segment and based on customer feedback, they expanded into the OBT ecosystem too, before getting acquired to SAP for over $8bn in 2014.
I remembered my Problem ONE (manual cryptic work on blue screen) and Problem TWO (passive segments as free-text fields) and thought to myself — these OBTs have probably solved these problems by simply integrating with the GDS API in the back-end and the companies comfortably self-book online and the travel companies use the same platform to book on the cloud platform itself, along with all the analytics, invoicing etc happening on it as well, without the GDS cryptic stuff being in picture. Only to realize that NO — that wasn’t the case and to my surprise, it revealed the big Problem THREE.
Going forward, I’m going to use one term ‘TMC’ (Travel Management Company) which is used for travel companies that specifically serve corporations for business travel purposes and doesn’t act as an OTA like Expedia, MMT, Cleartrip etc. which mostly serves the consumer market.
After speaking with 5–10 folks around the world, below was the high-level conclusion:
- Like consumers in the B2C world that use Expedia, MMT, etc for booking flights and hotels and these OTAs have their in-house engineering and product teams which builds the product, the companies in B2B world use TMCs like CWT, BCD, Amex GBT, FCM which don’t have their own technology solutions with in-house engineering teams, and hence offer these OBTs to their clients.
- The OBT is just a software to book business trips, and doesn’t operate as a TMC (which does service fulfillment too by partnering with travel sellers like airlines, hotels etc.)
- Also, most of these OBTs don’t act as a software for TMCs to manage their internal processes hence Problem ONE remained unsolved.
- The leading OBTs were built by working closely with large TMCs and hence the non-scalable approach of creating passive segments wasn’t questioned, and hence the Problem TWO remains unsolved.
Now the most hilarious thing is that instead of OBTs solving the two problems, it gave rise to Problem THREE i.e. building a cloud software with an architecture that works like an on-premise software operating in silo.
Let’s take an example
- Say there’s a multinational company ‘Freedom Inc’ with 10 offices in 10 different countries with 500 employees in each, totaling 5000 employees.
- Freedom works with a TMC that has a partnership with OBT A, requiring all Freedom employees to use OBT A for booking business travel.
- OBT A now requires Freedom to setup a unique site per country, and on-boarding for just one country takes several weeks. This is too time consuming and a big learning curve for Freedom and hence the TMC does the entire setup and on-boarding process for 10 different countries (sites) on behalf of them.
- What does a site mean here? It means that the 500 employees within each country can only see what’s happening in its OBT A’s site, and the other 4500 employees can’t see what’s happening outside. To give a simpler example — Say if we use Slack/Zoom for communication and we can only interact with the colleagues within our country.
- What if the Freedom CFO and finance teams want a global spend analysis of their business travel program to drive data-driven negotiations and cost-savings? It’s like the VP of engineering sitting in the US not allowed to see code written by their engineering teams in Ukraine.
- What if the Freedom US employee booked a trip to their Dubai office and now he’s stuck at a local car company while check-in and the Dubai travel team wants to help him (because he’s now in Dubai) but they can’t access his trip because it’s a different site. I can literally just go on and on thinking about 10 different examples where this site-based approach falls completely flat on everyone’s face.
Sounds like Freedom Inc has their freedom taken away.
If we thought there were only three problems, here’s another big beast
- Consider Freedom Inc again with their 10 offices in 10 different countries
- Now say the offices are in US, Canada, UK, Spain, Ukraine, Dubai, HongKong, India, Australia, and Philippines.
- Freedom uses TMC A for the first 6 countries where it offers OBT A for the first 6 countries.
- Freedom uses TMC B, C, and D for HongKong, India, and Australia for its local expertise on negotiated fares, better support etc. None of these TMCs have a partnership with OBT A hence offers another booking tool specific to their local region.
- Freedom uses TMC E for Philippines which is a small boutique travel company, doesn’t use any OBT, hence serves Freedom via emails (think Problem ONE like in my Dad’s company)
So the beautiful diagram looks like this
Imagine what would happen to companies with offices in 30/60/100 countries? Their Finance, HR, Travel, and Admin teams would go completely crazy managing so many different vendors, software and instead of focusing on making data-driven decisions to improve the traveler experience, safety and travel program efficiency, they’re spending hundreds of man-hours every year doing unproductive work using inefficient technologies and processes.
Now this isn’t a problem specific to one software/product/process, but an overall ecosystem problem. Just the way the overall travel industry operates with local TMCs having leverage over local negotiated prices, SOTO fares parity, and language support — it seemed like a challenging but interesting problem to solve. Let’s term this as Problem FOUR
If you’re thinking “wasn’t this enough already”, it really wasn’t! In the next and last blog post, we’ll cover the Problem FIVE and how we think about solving them, and what’s going to really cost us to get us there.
To learn more about Zenmer, visit our website.
— Nikunj Agrawal, Founder & CEO, Zenmer