Strategy

Travel Expenses, Down to Earth

Some thoughts on keeping your global spend from flying off in all directions.
Esther SheinJanuary 29, 2007

For Matthew Hackett, “power traveler” is hardly a glamourous label. A Waltham, Massachusetts-based business designer with the Global Consulting Oracle Practice of Computer Science Corp. (CSC), he spends 80 to 90 percent of his working hours on the road.

“I’ve been caught in situations where I’m not sure where I’m going from one week to the next,” says Hackett. Not surprisingly, when he books travel, Hackett simply wants to see the best options, without any hassles.

At CSC’s headquarters in El Segundo, California, Emily Rademaker faces broader issues. As director of Global Travel and Fleet Management, she monitors the spending of thousands of employees like Hackett. In fact, says Rademaker, about one-third of the company’s 79,000 employees travel for business — half of them, frequently.

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Conflicts between personal travel concerns and companywide financial expenditures are a challenge for many organizations. Managing those differences effectively depends on an ever-changing balance between software, policies, and people.

Making Your Connection

Like most business travelers at CSC, Hackett relies on a web-based booking tool from GetThere, a division of Sabre Holdings. GetThere’s online tool, says Hackett, lets him review his previous travel, see where he’s scheduled to go next, and make close-in travel plans a little as four hours before a flight.

Back in El Segundo, data from GetThere feeds an online database called PowrPac, from Carlson Wagonlit Travel. Rademaker uses PowrPac to capture and analyze all of CSC’s travel-related expenses and bargain for the most competitive rates. When she negotiates with hotels, for example, she can confidently assert that “I have this amount to spend in this property, and I want a rate that’s commensurate with my spend.”

CSC employees can also call the company’s preferred travel agency to make their arrangements, but Rademaker notes that most employees prefer to book online. “The tools have come a long way in their ability to offer full content,” she says.

Indeed, competitive rates for airfares and hotels are just a jumping-off point for the latest web-based corporate travel systems. American Express Business Travel and Rearden Commerce recently launched what they describe as “an online personal concierge for business travelers.” AXIOM (the American Express Intelligent Online Marketplace) enables employees to find, purchase, and manage not only flights, car rentals, and hotel stays, but also related services like dining, ground transportation, event tickets, package shipping, and audio/web conferencing — more than 135,000 suppliers in all. At many companies those “ancillary” items are unmanaged, according to American Express Business Travel, yet they may account for as much as half of T&E.

After a traveler enters the basics of his or her trip, AXIOM automatically recommends related services; the completed itinerary can be loaded to Microsoft Outlook or Lotus Notes, and invitations can be automatically sent for calendar items such as a business breakfast or a teleconference. Updates are sent automatically, by voice, email, text, or fax, if any booked item is changed.

From the home-office perspective, booking tools like AXIOM and GetThere offer another advantage. Industry observers say that compared with many travel agents, online tools attempt to rein in free-handed employee spending by confronting travelers with “visual guilt.” For example, they show the employee how much he or she could save the company simply by flying a little earlier or later.

“A lot of employees will tell you they didn’t know they were supposed to use a particular airline or how much to spend when taking out a client,” notes Henry Harteveldt, a vice president and principal analyst with Forrester Research. Speaking of AXIOM in particular, Harteveldt says that it “helps people do the right thing when they’re traveling or when they’re shipping a package and making dinner reservations. It’s the equivalent of an administrative assistant or someone who has been at a company for a long time and knows the ins and outs.”

Hackett of CSC says he has “re-thought trip options based on what has come up” in GetThere’s recommendations. That’s especially true, he adds, when he’s planning to fly to a city for the first time and discovers that it’s a hub for a carrier he may not have considered. Last year, while managing a team of 20 employees located across the country, Hackett also conducted spot-checks in the GetThere tool to make sure the employees weren’t overspending on flights or hotels.

At CSC headquarters, Rademaker’s department also studies the company’s air-travel trends, and each quarter her department identifies travelers to educate about purchasing tickets further in advance. A traveler who books his or her flight less than a week before departure, she observes, could save the company a considerable sum by booking 21 days in advance. The endeavor is educational and not punitive, stresses Rademaker, “because there may be legitimate reasons why you couldn’t book further out.”

Rademaker also says that PowrPac lets her benchmark CSC’s travel spend against that of its peer companies. For example, if a hotel offers CSC a $100 rate in a particular city while a similar customer with a similar spend receives an $80 rate, PowrPac helps her bargain for a similar deal. Forrester’s Harteveldt observes that hotel rates are projected to increase this year between 2 percent and 8 percent, leaving little room for price cuts, but he adds that benchmarking can help companies track down value-adds like breakfast, or free parking, or complimentary Internet access.

One in four business travelers has access to a corporate booking tool, according to Harteveldt. Smaller and midsized companies are likely new customers for such services, he adds, since they may not have enough finance people to track the more nitty-gritty expenses. “They may be fairly diligent about travel because those are big expenses,” says Harteveldt; “it’s the web conferencing and shipping that may be slipping through the cracks.” A tool that can determine the cost per web conference and track how many are held each week for example, might enable the company to negotiate a lower rate.

Online tools also provide a benefit beyond booking that big business trip, says Harteveldt; they also help out with “the day-to-day, mundane stuff.” At the end of the day, he adds, these tools “allows the CFO do to their job without having to play the heavy.”

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