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Evaluating corporate travel automation.

Article Excerpt
Many companies are reporting a return to a level of internal technology investment not seen during the past four years, following the Year 2000 computer glitch, the late 2000 economic downturn and the tragedies of Sept. 11, 2001, but often such purchasing decisions are out of the hands of business travel buyers.

Travel buyers have had more than a hand in some decisions, most notably in the embrace of online booking tools by most managed travel programs and about one-third of mega agency transactions.

Some buyers are working to drive not just adoption of online booking tools, but also the percentage of transactions that are completed without manual intervention.

Many buyers have put time and resources into developing travel platforms on their corporate intranets that create travel program portals, which hold the travel policy, preferred vendor information and online booking capabilities.

In some companies, other internal groups, such as finance and accounting, are making travel technology decisions, particularly those regarding expense systems. Procurement organizations have played growing roles in making decisions about travel management and procurement technology, as has senior management. Decisions outside of travel, involving enterprise resource providers, such as SAP or Oracle, or other companywide technology platform decisions also figure heavily in the equation. Some companies are moving away from homegrown travel intranet sites and using those tools instead. Travel buyers should communicate with those other corporate decision makers.

Travel technology requires a significant investment, which means it comes under corporate scrutiny and requires collaboration from selection through implementation.

Technology solutions must fit company needs. The benefits of automation largely are derived from the reduction of labor costs. Each company needs to determine for itself the level of expertise and manual intervention that it needs. Technology advances can enhance business, but locking into a solution prematurely can make a company less flexible.

That flexibility seems even more important in light of developments surrounding the recently deregulated global distribution systems. As content for discount agreements begin to expire toward the end of this year, new deals between airlines and GDSs will determine the value of emerging GDS alternatives.

The jury is still out as to how many survivors there will be in the online booking marketplace and among GDS legacy and new entrant players. Travel management companies and travel buyers alike will be forced to make decisions based on content and economics. The continued growth of low-cost carriers and their ability to survive without being included in the GDS makes the need for a universally accepted profile and a "super PNR" critical. Until all bookings can be done in a single medium, there will be no happy medium, only fragmented bookings and lost productivity.

Meanwhile, furthering buyers' long-held technological dream of having automatically prepopulated expense reports was recent news that American Express has begun transmitting hotel e-folio data for 15 clients using six hotel chains.

Travel management technology changes rapidly, so buyers need to focus on long-term objectives and whether vendors can adapt to changes and fulfilling strategic needs.

The following guide shows how to apply automation to the travel management cycle, from trip planning through management reporting and reimbursement:

I. THE TRAVEL MANAGEMENT CYCLE

A. Following the establishment of policies, budgets and possibly trip models, travel management operations are a cyclical process involving the following main steps:

1. Trip planning and authorization

2. Making reservations

3. Optimizing reservations in fulfillment through quality control and fare checking

4. 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 reimbursement

9. Internal expense accounting, reconciliation and auditing

B. Before beginning to evaluate which parts of the cycle to automate, 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 quality

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 corporate culture and initiatives

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

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

1. How can automation improve your travel management program?

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 company manage travel spending more effectively by focusing on a global program?

4. How can you simplify the travel process?

5. Where are you having recurring 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 the use of technology to travelers and travel arrangers, and to enforce policies designed to change their behavior?

9. How does travel purchasing fit into other corporate technology initiatives? Is your company's IT strategy to outsource some functions or consolidate...

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