When Rich Phillips became COO OF Maritz Travel about two and-a-half years ago, he sat down and took a hard look at the big industry picture.
It wasn't pretty.
"We had some serious systemic issues," says Phillips.
Post 9/11, bookings had declined in every area of the travel industry but travel for corporate meetings and group travel - which is Maritz Travel's specialty - had been hit especially hard. For many companies, holding meetings in far-flung locations, flying employees around the globe to convention cities and warm-weather resorts is a matter of choice, not a business necessity, and thus a highly controllable expense. If a company was going to spend travel money, it was going to want more, a better return on its investment. Consequently, Maritz had to find ways to innovate and grow in an environment in which its customers were acutely cost-conscious. Plus, Maritz's customers wanted new levels of service and they wanted them now, not later.
Phillips knew Maritz had to change, and change fast.
Turning the Ship Around
It's no small matter to change business processes, let alone change them quickly. The challenge becomes even greater when you're big and complex. Known as the global leader in its category, Maritz Travel represents the biggest business unit in the $US1 billion-plus privately-held Maritz. Every year it helps send hundreds of thousands of people on trips including conferences and incentive travel vacations (used to reward employees in fields such as sales) on every continent.
Phillips, who started his professional career with a 10-year stint in IT at Citigroup Mortgage and several divisions within Maritz, began his makeover effort with a value-stream analysis in order to map the business and identify what was working and what wasn't. "We had some process issues that we needed to address," he says. The first big one? "I had process integrity issues," he says. "There was no linkage from one phase to the next" - for example, between the sales and the delivery organizations. And he needed to speed everything up. "The market was shifting. Our customers were demanding that our cycle time improve," he says.
Phillips first turned to a data repository initiative to tackle the disconnects in the company and to address new Sarbox-related compliance demands. This work led him to a business process management (BPM) revamp beginning in July 2006.
Today, BPM isn't just a project at Maritz; it's an ongoing way of life, with a continuous improvement team staffed by IT and business-side execs churning out process-related changes on a monthly basis. "From selling to billing, everything we do is now touched by BPM," Phillips says.
To date, the process revamp has helped reduce Maritz's SG&A (selling, general and administrative expenses, better known as overhead) by more than 10 percent. "This has allowed us to improve profitability while simultaneously increasing client-facing resources as a percent of our total expenses," Phillips says. Maritz has also used these productivity gains to accelerate investment in product innovation around areas important to clients, including data management and compliance.
His keys to BPM success? For starters, ensure a tight IT and business relationship. And think big.
"I've observed many BPM projects that dealt with a subprocess, like recruiting candidates or billing," he says. "We went wide. For example, we looked at how our organization delivers to clients. Then we went deep."
If you get bogged down in subprocesses too quickly, he warns, you'll miss your overall goals.
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