“We are in a very commoditised market and we have to change and we have to change fast,” says Eric Tyree, Chief Data Scientist of Carlson Wagonlit Travel, a $23 billion global business travel organisation. Tyree described the pressures of market commoditisation, transformation and the role of data to a packed Horizon CIO podcast roundtable dinner.
Tyree, who joined CTO Andrew Jordan at Carlson Wagonlit Travel in November 2016 says the organisation is using: “Data driven technologies to help ourselves and our clients to execute change very quickly,”
Carlson Wagonlit Travel provides business-to-business services in travel management, meetings and events. It began its history as a provider of sleeper railway carriages in the first golden age of rail travel. Today the business is truly global with a headquarters in Paris, 18,000 employees in 150 countries and major operating centres in the US and London’s Docklands.
Tyree joined CTO Jordan’s team having had a diverse data career. “My background is in the AI data driven space. Applying it to large banks and stock exchanges, applying AI to decision support systems in fraud and anti-money laundering and the hedge fund industry,” he says on the Horizon Live CIO podcast from the recent event. Tyree has applied AI in financial services and professional services organisations such as Capita.
Tyree explained to the CIO community that data is the asset that many organisations fail to realise in a business transformation and that data is essential to the modern CIO looking to create revenue streams. In his three years as chief data scientist for outsourcing service provider Capita Tyree helped the organisation move from being an organisation that was good at reducing costs and discover new revenue opportunities: “I became the data monetisation fairy for Capita and I went all around the businesses and looking at where there are interesting assets,” he says. Interestingly Capita has just issued a profit warning. Capita operated the TV licence at the time and Tyree and his team were able to turn the data into a revenue driving asset by offering the TV licence data to the banks because the data is so accurate.
“My job was to look at data and ask can I generate revenue from selling or doing something else with it,” he says.
Data in travel management
“So there is a need to disrupt and CWT decided to be the disruptors rather than be disrupted. My job as a Chief Data Scientist is very very simple, to create revenue with data.”
“When you travel you leave an extraordinary data trail. What is really bizarre is when you think about how much data travel produces and that data is left on the shop floor, so I started looking at it and putting some proposals together and it dawned on me that the corporate travel space had not had a data revolution,” he says of joining Capita Travel and Events.
Tyree joined Carlson Wagonlit Travel because they realised that the market was commoditised and had to develop new products to differentiate themselves. The sector had got itself into the same problem that the facilities services sector finds itself in today. Each and every player in the market offers an identical service and the buyers just ask for a discount, which the suppliers then compete for. The result has of course come under a harsh spotlight recently with the collapse of Carillion in the UK and the realisation that large businesses were offering discounts – amongst other practices – that undermined their business models. “There is a massive compression on revenues going on,” Tyree says.
“So there is a need to disrupt and CWT decided to be the disruptors rather than be disrupted. My job as a Chief Data Scientist is very very simple, to create revenue with data.” Tyree goes on to tell the CIO podcast that his strategy has been to develop business solutions and not build a data warehouse. “If you build a massive data warehouse, you’ll build it for everybody and please nobody”.
“I started with the CFO,” he says. Many organisations have no real understanding of the return on investment (RoI) from travel costs. Now Carlson Wagonlit Travel is able to offer organisations not only travel, but a data analytics service to discover and understand the RoI of travel. It is a common problem all of us have seen in organisations, the travel budget is cut and it upsets the workforce, yet it remains the second or third largest cost to organisation. Teams can rarely demonstrate the RoI to travel either.
“There is a way to measure. You need to integrate data sources. So we take the travel database of everything you have booked and everything you have paid and then I need to know demographics and then I need to know pay grades. I take the HR data and integrate that with the corporate finance system and now I have a 360 degree view of travel, who is travelling, the business and more importantly how the business expenditure correlates to travel.
“Then you can say for every individual, every cost centre I can correlate your revenue back to travel expenditure and the correlation and then you can create a KPI,” Tyree says.
The Chief Data Scientist believes organisations can use corporate travel to improve business performance and increase productivity.
“How do you justify spending a little bit more on travel? You can save money by sending people first class,” Tyree says; adding that CFOs look at him like he was mad. Tyree’s data work demonstrates that if business travellers book a first class rail ticket three to four weeks in advance it will be at the same and sometimes less cost than a ticket purchased three to four days before travel.
“If you have travelled standard class you will not get much work done. Your laptop won’t work by the time you get to Edinburgh,” Tyree quips in a story we have all lived through. “I can work out your time costs. If I assume that on your trip to Manchester you will do one hours more work than you would do in standard class it turns out you don’t have to be earning much before that first class ticket is already paid for,” he says.
“So you introduce a policy of, ‘if you are travelling in the UK if you book two or three weeks in advance you can go first class’ and if you tell people they can go first class, shock horror they start booking in advance and they’re booking the hotel in advance as well so we are saving money there so the total savings increases,” Tyree says.
“If you try to make that argument anecdotally to a CFO they will laugh you out of the room if you show them in data you can make a business case. It is not just the CFO, we also talk to HR directors because a lot of people don’t realise there is a big people management issue with travel so they are keen to talk to travel management firms.”
Tyree has seen his travel data being used to help organisations with talent problems, tracking levels of travel, age and experience and how organisations can better manage travel to ensure they do not lose high quality staff because they have become mothers for example.
“Make sure that people can consume the data; so if you are sending it to a finance department they can consume it in a spreadsheet. Believe it or not, this is how they consumer information. You can give them the most fantastic Tableau dashboard and they will ask for it in a table so they can stick it into Excel,” Tyree tells CIOs to a number of laughs. “You can have the best data warehouse the best data sets but if people cannot consume the insight then it is utterly worthless.
“That is something we have found. It is really important we don’t just drop the same interface in front of CFOs, HRDs and travel managers, we think about how do you go from an insight into a business process,” Tyree says.
Tyree uses an anecdote from outside of corporate travel to demonstrate how important visibility and solutions are and not data warehouses. The probate legal market was disrupted by an organisation that understood the value of data. In probate law it is the bankers that actually benefit the most, probate cash is placed in a bank account by the the probate lawyer and it sometimes stays in the account for some time, that is funds that is liquidity for the bank to use. Tyree explains that probate lawyers do a lot of research and as a result have a major data trail. Ultimately a disruptor realised this, created a data service that they offered to other probate lawyers and to the bankers ultimately securing themselves an exclusive deal with the banks.
“They analysed the value chain and the people making the most money were the banks so they created a way to make more money out of the banks, which is laudable. So there are two lessons, they focused on the value chain it is the classic John Dillinger quote, ‘why do you rob banks? Because that is where the money is’,” Tyree says.
“Avoid data warehouses and focus on the value.”