iLodge delivers extraordinary savings to clients through long standing service provider relationships.
The Challenge
A subsidiary of a valued iLodge client failed to make use of a service outsourced to iLodge regarding accommodation bookings for a project in the Secunda area. The subsidiary failed to adhere to the client’s procurement directives to engage iLodge for the delivery of all food, accommodation, and transport requirements for any offsite project resources. The preferred booking process was not followed by the subsidiary in question and a booking was made directly with an iLodge Service Provider (SP). iLodge was not aware of the direct booking. The subsidiary did not receive the iLodge pre-negotiated rate, and thus also not the daily saving that is available to all iLodge clients. Upon discovery of said booking, the client enquired if it was possible to reverse the pre-arranged, un-solicited booking. This meant that the resources in question would therefore need to be checked-out and re-booked under the iLodge account.
The Solution
iLodge immediately contacted the service provider to request whether they would consider an ownership change of the said booking to allow iLodge to offer the discounted rate to their client. Even though the SP realised that they would be financially disadvantaged, they agreed to the change, based on their long-standing relationship with iLodge and a joint, pre-agreed pricing structure. iLodge has spent numerous years developing a service-level and related daily-rate standard by which clients are billed for their offsite accommodation, meals, and transport services according to a rate determined by their specific requirements. The rate is influenced by, et al, length of stay, availability, level of accommodation required, sharing of rooms and bathrooms, meals required with or without specific dietary requirements, and whether transport to and from site is included. This not only ensures a high level of standardisation across all areas of service delivery, but also ensures cost predictability around project budget preparation and tender submissions by their clients.
The Result
iLodge was able to confirm that the favourable and agreed upon rates were available to the client as if the booking had been made directly through them. The client calculated that a saving of R100 000 could be realised if they cancelled the booking with the said service provider. However, due to the complexity of several external factors such as formal booking confirmations provided, purchase orders already raised, etc., the client decided not to amend their booking. Therefore losing out on a significant project saving. A process has now been agreed upon and enacted by the client to ensure that their subsidiaries are aware that accommodation bookings should all be completed through iLodge and that they are of a valuable financial benefit.
“If the booking was originally done through iLodge, and not directly with the Service Provider, our organisation would have been able to realise about a R100 000 savings on the project accommodation costs for the two-month duration of this project”, – Head of Procurement, Africa.
