Travel buyers from five companies shared insight on payment
and expense policies, technology and practices at a roundtable discussion in
May just prior to Business Travel Media Group's Tech Talk event in Chicago.
Harman International global corporate travel director Sally Abella, BDO USA LLP national director of procurement and
travel Cynthia Gillen, Citigroup
managing director Mick Lee, Liz
Claiborne Inc. global mobility, T&E and meetings director Rafael Rosario and former Tellabs
indirect strategic sourcing global travel administrator Patty Little met with BTN's
Mary Ann McNulty. An edited transcript of the discussion follows.
BTN: End-to-end
automation has been a hot topic for 20 years. Where are you in deploying
booking-through-expense technology?
Patty Little: Tellabs transformed its entire
travel program from multiple small agencies to one global. They wanted a credit
card system, wanted an automated expense system, but didn't realize that they
would need the credit card first. They really had no data to work with due to
the manual systems in place. They wanted to integrate booking through expense,
collect all data on the back end and at some point compare booked to actual,
because that's where the value is.
Cynthia Gillen: We've not pursed an end-to-end
scenario. Our current expense integration enterprise resource planning program
would not be supportive of that.
Mick Lee: We're not fully end-to-end. We're
in over 100 countries, and the majority of those countries have Concur. We have
60,000 frequent travelers. Those travelers are profiled through the Concur
system, and we're using Cliqbook as our pre-trip tool. We've just launched—and
in next couple months to a year expect to have fully—one single data
consolidator. Our next step is to compare booked to actual data and pull those
two pieces together. That's our goal certainly for year-end, but for us the
majority of the work was getting as many countries as we could on Concur. Right
now, more than 84 percent of our expenses are through Concur and 70 percent of
our travel is through an online product.
BTN: Expense data is
the purest and what you needed to drive your program?
Lee: Yes. There
is such a disconnect between booked and actual data. Actual obviously is going
to give you a truer picture.
Gillen: Actual
[expense data] is going to pick up the ancillaries, taxes, surcharges and just
the costs of doing business, so the expense data is the most important. We're
on Oracle for our expense, Cliqbook for booking.
Lee: One of the
things we worked on was partial reimbursement for anyone who doesn't book
through the designated travel agency to help us to get closer on the disconnect
between booked and actual data. My popularity of course tanked as soon as that
[policy change] took effect.
If you don't book through the DTA, you're only reimbursed
for 80 percent of what you spend. The only people who can grant exception
authority on that are the CEOs. There are only a handful of CEOs that our
60,000 travelers report to who can approve exceptions.
The people who actually get exception approval have true
exceptions. For example, if you're running to the airport to jump on a plane,
that was something that was applicable. You wouldn't mind granting the
exception there. We tied it into our security program. Obviously when a plane
goes down or something happens, the way to find out where employees are is
through our DTA, pre-trip reporting, etc. By forcing the issue, it's not about
expenses, it's safety and knowing where our travelers are.
BTN: How is compliance?
Lee: We
implemented in October. It was a painful 90 days, as you can imagine. But the
exception levels and numbers have gone down considerably. There were very few
for the month of March—we're talking 20 exceptions in comparison to hundreds in
October. A lot of it was education. It wasn't that people were trying to do the
wrong thing, they just didn't know the policy.
Gillen: What was
the focus of your education message to end users?
Lee: We had a
90-day communication plan prior to Oct. 1. We held traveler and travel arranger
seminars. We ran it on television monitors throughout buildings. All the
profiled travelers got information about it.
And we used recent successes in getting our people out of
Egypt. In January, we reemphasized the importance of knowing where our
travelers are. Safety and security is paramount—that's our most important
thing. The way we know where you are and can take care of you when you're on
the road is when you book through the DTA. By the way, there are some financial
benefits to it too, but that's secondary to taking care of you and knowing
where you are.
Sally Abella: It seems like after a disaster,
such as what happened in Japan or in Egypt, all of a sudden you get this influx
of people saying, "Now I get it," especially when you're reaching out
to them at midnight, talking to them—"I know you're in Japan, we have you
secured on a flight, we're talking to your family"—and they're like, "This
is great." It wakes them up a little bit.
END-TO-END BENEFITS
BTN: Sally, what are
the benefits of your integrated booking and expense systems?
Abella: You're
finding out as you implement these things that there's so much more. For
instance, we just integrated our online booking tool and offline reservations
into our expense system with IBM. They have a trip manager linked to an expense
report. When they process their expense reports, they attach the itinerary.
Now, it's interesting to see what's happening to the employee once they leave.
What's happening at check-in? Are they upgrading themselves to club level? Did
they buy premier seating to get a better seat on the airplane? Why is there
such a big discrepancy between what they booked to what they expensed?
It's also interesting to see how you can start capturing
ancilliary fees to find out what travelers are really buying. Are they buying
Wi-Fi in the hotel? It was interesting for me to see a hotel where we were
doing 2,000 room nights a year and how much we're spending on Wi-Fi there. You
go back the next year and negotiate Wi-Fi into the room rate. There's all this
information coming at you. It's great. It's also really great to report on
actuals, to see what you really spent—not what you booked, but what we really
spent.
BTN: Is that variance
as much as 20 percent or more?
Abella: Yes, it
is, but you're also looking at other costs. You never really looked at what the
real trip cost was until you could actually capture everything—ground
transportation, meals, all the other stuff that goes with that trip. Now you
can see what would a trip from Los Angeles to New York or four days in Europe
would actually cost us It's really going to be interesting to see how these
expense systems evolve, because I think they are all really new.
Little: Even
mileage reimbursement is clearer. We found many who had a car allowance were
also submitting for mileage. When everything is manual, you don't see that.
Abella: You can
run a report to find those buying fuel who didn't rent a car. What's that all
about?
Rafael Rosario: Also on the mileage side,
Concur came up with a solution with Google Maps, so when you click on mileage,
the map shows where you are, where you went and they calculate the mileage for
you. It doesn't allow the travelers to estimate.
Little: We
discovered a lot of employees were putting in for mileage, and when you looked
at their entire mileage for given period, it was like, how did they have time
to work? They were on the road driving all the time to travel that many miles.
BTN: Rafael, now that
you've integrated booking through expense, what have you been able to identify
that you couldn't before?
Rosario: The way
I implemented our process is that you need to book through the online booking
tool or the agency, but that record is audited before it's booked. If you're
not in compliance, the record isn't processed. In 2010, compliance was at 87
percent. The 13 percent not in compliance was because people booked conference
hotels or hotels outside of our preferreds to meet with a vendor or customer.
Being that I manage booking, expense and the corporate card
program, I can see what people are doing. I can see the upgrades at the front
desk and the overcharges by a ground transportation provider. We run exception
analysis reports and cost opportunity analysis to show the opportunities if we
would just change this or that. Before, no one did anything with all this
information.
Little: I think
that's part of where we get into rubber-stamping of expense reports. Managers
don't know that the rate should be.
Abella: When we
first launched automated expense reporting in my company in 1999 and I first
started going to all these customer summits, it was all finance people. Finance
has no idea what the policy is.
Rosario: You can
also create policies based on the expenses. We reduced one cost category from
more than $4 million three years ago to less than $800,000 as a result of
policy changes on samples.
Lee: It goes back
to the fact that the role of the travel manager has completely evolved. We don't
care what your seat assignment is—that's what the travel agent is for. It's all
about strategic management, expense leadership, bringing together technology
and looking at the end-to-end solution, whether automated or not. Anyone I talk
to in benchmarking groups, we've all evolved.
Rosario: It also
allows us to advance ourselves within our organizations.
Abella: Our
T&E auditing now falls under the travel department. They don't report to
me, but there's a dotted line to me. This tool gives you information for your
internal auditors.
TOO MANY COMPETITORS?
BTN: Sally, you
mentioned that some of the expense systems are still so new, but I'm struck by
the number of systems—more than 40 currently on the market. That includes some
that are only web-based or made for the iPhone or Android, but there are still
20 to 30 marketed as enterprise systems. Is that of any concern to you or your
travelers?
Abella: No. If
you have a managed expense system in your program, you're going to have the
whole integration and the card upload that makes it easier for your travelers.
The traveler really doesn't want to go outside the system if you do it right.
Rosario: The only
way you get reimbursed at Liz Claiborne is if you use our expense system.
Otherwise, you don't get money.
BTN: Do travelers
complain that your system doesn't have all the features of the more
consumer-based options?
Gillen: You bring
up a good point. I don't worry about those systems, but I'm very aware of them
and I want to know what features they're offering. If they are features that make
sense for our business environment—and many of them will—I'd like to introduce
them before employees bring it to us. Once they've found it, it's very hard to
take something away. You want to give it to them before they've found it.
In the growing Android, BlackBerry and iPhone markets, there
are a tremendous number of features and tools—something like 30,000 travel
apps. They all do one or two things extremely well, some better than our mass
tool, which does everything. The question is, how do you look at your mass tool
versus some of these? We look to have a position and strategy in place before
the questions occur and make the appropriate choices early in the game.
Abella: You
really need to do your homework before you select your tool. If, like at Citi,
you're launched in 100 countries, that is a lot of work. You've spent a lot of
time, energy and company money to get this thing launched. Last thing you want
to do is say, "I just spent this money, but now we're going to change."
You really want to make sure the partner you select has that vision like
yours—if you're going to bring things to the table, they take it seriously and
work with you to get it onto your program.
Lee: Competition
is good. We continue to look at what everyone is doing, then we just bring it
back to our provider and say, "Here's the list of things you need to be
working on. Give us timelines."
We've done as much as we can to embrace all the social
media, because we know that's what people are looking for and what they want.
We have essentially an internal Citi Facebook, where we have blogs on travel
and have people voice their opinions, and that's managed. It's a great way to
get the word out to 60,000 people all at the same time.
It's a combination of benefits, safety and security and
information we need them to have real-time. We're working on several apps to
deliver messages real-time, everything from your flight is delayed by 30
minutes to your expense report has been processed and paid. We're trying to
embrace everything that's out there because it's not going to go away. That
competition helps because it keeps the existing vendor on their toes.
DEMAND FOR MOBILE
EXPENSE?
BTN: Mobile has been
a big part of what vendors talk about. Is mobile something you and your
travelers want?
Abella: I'm very
interested. There's nothing I hate more than to get an email that you have an
expense report to review and approve, but I'm sitting on an airplane. If only I
could process it on a mobile app. I know they're working on it, and I'm looking
forward to having that feature, but they need to get it out there.
Rosario: I agree
100 percent, but when it comes to approving expense reports on an Android or
iPhone, there's not much you can do. You have to run audits. Besides the
manager, we have someone who audits and sends back reports that are
noncompliant.
Abella: That's
your safety net. We're 100 percent audit. We know our approvers are
rubber-stamping.
Lee: Isn't the
average length of time expense reports are open by approvers like 2.3 seconds,
which illustrates the point?
Little: It will
be really interesting to see that rate after it goes mobile—it will be even
faster.
Abella: At
Harmon, we knew we had some rubber-stampers out there, so we talked to HR and
had some people take a mandated, escalated approver training to show what to
look for on expense reports.
ALL ABOUT RECEIPTS
BTN: Another feature
some expense vendors have announced is using smartphones to capture receipt
images. Is that something you use?
Rosario: Great
feature, but not everybody knows how to take a picture. We have it enabled and
have had a lot of communication and training. But in reality, not everybody
does it right.
Gillen: It's good
for audit control, but it's not going to help for expense management. My
concern is those visuals captured make people think we have the corporate data.
Unless the information is added in manipulatable columns, it doesn't do us any
good.
Abella: One
feature I'm really looking forward to is the ability to be in a cab, pay a fare
and quickly type in "$42, airport to hotel, Chicago." Then when you
log into your expense tool, you have the cash charges you sent to your profile.
That is going to be slick, and I think our employees will really like to have
it.
BTN: How soon do you
expect that?
Abella: I don't
know, but I'm at the front of the line waiting for it. This is for the cash
stuff, when you buy a cup of coffee. Many don't keep track of the receipts. We're
100 percent receipt. We moved to that in 2008.
Lee: What do you
do if there is no receipt?
Abella: There are
exceptions, people have to explain. Then we run reports on who is losing
receipts all the time. The move to 100 percent receipts was a tough one.
BTN: Do you allow employees
to take pictures of receipts and submit those?
Abella: We accept
the scanned receipts for payment, but the employee is still responsible to turn
it original receipts. We warehouse all receipts. The employees manage their
receipts, file their expense reports and every month or quarter send all
receipts via interoffice mail to accounting.
Rosario: We also
warehouse receipts. We use all the original receipts for value-added tax
recovery. That's the reason why companies still require original receipts.
BTN: Have you
made any other changes to expense policies of late?
Abella: I hate to
tell you this, but we are not reimbursing for tips any longer, except when
associated with a meal. We don't have a limit on meal tips—we encourage 15
percent. But we're not reimbursing for bellmen, cab or shuttle drivers. I still
tip, but it's out of the goodness of my heart.
BTN:What was the rationale?
Abella: We had a
lot of employees who reported $20 in tips. I don't know what for, but I know I
had them. We just found there was some abuse with tipping. When we changed to
100 percent receipts, we eliminated tips. It was difficult at the beginning.
When you're traveling, you feel like you represent your company. Hopefully our
employees are doing a good job out of the kindness of their heart. But it's
saved us quite a bit of money.
Rosario: You're
right about that, there's abuse of tips.
Abella: I think we've
all gotten really tighter on what we're allowing, whether because of
Sarbanes-Oxley or other reasons.
Gillen: It's the
visibility of good business practices.
BTN:How do you learn what others do on expense
and receipt policies?
Lee: There's a
Wall Street benchmarking group that gets together every other month or so. We'll
never talk pricing, but policy issues like we're discussing here. More and more
in recent years, it is the first question that executives ask: "What are
other banks doing?" We want to make sure we're balanced both from
attracting-talent and shareholder perspectives. Whenever I propose a policy
change, I automatically come in with who is doing what.
Rosario: I belong
to a retail-wholesale benchmarking group that talks every quarter and meets
once a year. We share a lot of policies and talk about issues in our program
that could benefit each other.
Gillen: There are
just so many more communication channels for information on this. Questions I
ask every supplier are, "What are you hearing from other customers? What
are they looking at right now?" Hearing this perspective is interesting
because it's often what's coming down the pike. Whether we're buyers or
suppliers, we all have the same goal: profitability for our companies. They're
developing products to meet my needs, they want to meet my needs, so they need
to hear what I and other customers want.
PIN-AND-CHIP VS.
SWIPE
BTN: Buyers recently
have noted that their globe-trotting travelers complained that their corporate
cards don't work in automated kiosks in Europe and Canada, where pin-and-chip
has been adopted as the security standard instead of the magnetic stripe used
in the United States. Is this an issue?
Gillen: Every
vendor is required to take the card if it has an agreement with a card
provider. But a traveler who needs to buy a train ticket, instead of going to
one of 30 kiosks, needs to go to the terminal window in a building next door
because there they can run the [mag stripe] card. That seems to be the option
presented to us at this time. We've asked if there is a solution that can be
offered. We're told not at this time, but the question is being brought up
repeatedly by corporate customers. We're not talking just kiosks, but
convenience stores or other places where you might be utilizing the card—the
merchants are just not able to accept it. Many of our travelers overseas now
have to carry more cash or look at other payment systems and direct-payment
scenarios.
BTN: Are you looking
at secondary cards for those overseas travelers?
Gillen: Travelers
all have U.S.-based addresses, so they're subject to U.S. credit law. There are
no U.S.-based credit card companies that will issue pin-and-chip that we've
been able to find. Another issue is, do we want to support dual payment systems
into all our systems? It's a pain point; it's not a decision-breaker now. A lot
of our approach in travel and expense management is to try to think of the
problems down the path. This is going to be a big issue in 12 months. Right now
it's just a little bit of a gnat.
Rosario: Let's
say a traveler is in London in a particular area with a high level of fraud. We've
found that the mag stripe credit card is declined because of that [higher
fraud], not because of a lack of funds. That's been a trend in the last year.
BTN: Is there a
resolution for your travelers?
Rosario: No, [our
card vendor] said there was nothing we could do. Our travelers sometimes put
expenses on their own personal cards, which has other problems.
Abella: This
surprises me because I've not heard one word about people having trouble using
their card. We really do encourage our employees to withdraw cash when they
arrive at the airport, withdraw a couple hundred dollars from an airport ATM
and have that with them. I've just not heard that, so I'll look into it.
BTN: We're also
hearing more about card fees and surcharges. Have you addressed this?
Gillen: We
address it as a contractual issue. We will not sign any contract with a
supplier that has surcharge for credit card payment. We also write in the
contract that we have the option to pay with a credit card if we choose to.