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Evaluating corporate travel automation.

Article Excerpt
The emergence of big-brand business self-booking products with fulfillment and telephone support has some corporate managers wondering whether customized buying of booking technology is a core role. Even though they are just building their full-service agency services and their technologies hardly integrate with other corporate systems, Expedia, Orbitz and Travelocity are catching eyes with their $5 fees for fully automated transactions.

Profitability remains elusive for managed booking technology providers even after years of market presence, and some clients' returns on investment have buckled under the weight of weak adoption. The test presented by the Big Three online agencies thus far is more on the user experience and stripped-down pricing than in extensive built-in policy parameters or deep reporting of both online and phone reservations. As such, the story is defined by client size.

According to the latest research, very large travel accounts in 2003 doubled their average annual domestic air adoption rates to about one-third. Dozens of the big providers' most committed large clients now are well past the 50 percent mark, and an emerging focus for them is how to cut agency support costs.

By contrast, just 14 percent of companies that spend $2 million or less annually in the u.s. on air travel offered travelers a "managed" product, according to a BTN poll published before the launch of the online agencies' business products. About half said travelers are allowed to book on airline sites and online agencies and just 6 percent said they had bought a booking tool, while three-quarters had no plans to do so.

The real battle is for the midmarket, or companies that spend between $2 million and $1 2 million in the united States on air, where agencies have resold products from corporate booking providers with a mixed degree of success. The percentage of bookings made online by companies in this category was half that of the smaller businesses, at 9 percent versus 20 percent. while about one-third had bought a managed travel tool, nearly a quarter said they had no plans to do so.

As leisure-oriented booking companies increasingly compete with vendors that call the business market home, expense management providers continue to battle such bigger enterprise software firms as Oracle, PeopleSoft and SAP. In the software sector addressing what truly puts the business in business travel, larger clients now are processing more than half of their expense reports online, versus about 40 percent for midmarket and more than 20 percent for small firms. In other words, there still are plenty of transactions to be had as recent consolidation could be moving such providers as Concur and Extensity closer to profitability.

The following guide details automation of the travel management cycle, from trip planning through management reporting and reimbursement:

I. THE TRAVEL MANAGEMENT CYCLE

A. Think of travel management as a cyclical process involving the following main steps:

1. Trip planning and authorization

2. Making reservations

3. Optimizing reservations through quality control and fare checking

4. Pre-trip travel management, or using information from bookings to identify potential savings opportunities and policy compliance

5. Document distribution: electronic tickets/receipts versus delivery of paper tickets and travel itineraries

6. Taking the trip

7. Post-trip management information reporting to the travel office and to senior management

8. Expense reporting and expense reimbursement

9. Internal expense accounting and reconciliation

B. As a start, take stock of how effectively each process works for you now in terms of:

1. Support for the overall business objectives determined by your company, including the balance of travel cost versus service

2. Support for the goals of your travel management program, for example:

a. To assure the company receives an optimal return on investment for travel spending, and identify any and all cost-avoidance opportunities

b. To improve service to the company and its travelers, and improve traveler productivity on the road

c. To enhance administrative efficiency and hold down the head count of support personnel

3. Compatibility with the company's corporate culture and its quality improvement programs

4. Support for the company's investment in long-term technology and business-to-business e-commerce strategies

C. Assess the broad areas where you can make the greatest gains through automation. Corporate buyers should ask these questions:

1. Can your travel management program be improved through automation?

2. Are the basic underpinnings of a travel management program, such as a formal travel policy and preferred supplier programs, already in place?

3. Can your travel management budget be better spent by focusing on other efforts, such as a global program?

4. How can you simplify the travel process?

5. Where are you having problems?

6. What big expenditures can you reduce or avoid?

7. Do you need to improve the decision-making process?

8. How prepared is the company to market...

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