Amex Doubles Consulting Unit, Adds E-Commerce

<B> Amex Doubles Consulting Unit, Adds E-Commerce</B>

By Sarah Welt

<I>New York</I> - American Express Consulting Services is doubling its staff to 80 people, adding divisions to handle e-commerce, purchasing and improving existing T&E management consulting, and for the first time, it is opening its doors to non-American Express clients.

The electronic commerce division, set to launch June 1, will help customers build a strategy, establish software requirements, and select and implement systems. It will offer a full range of consulting services and, like IBM's consulting practice, be "completely autonomous in recommendations," said vice president and general manager Rusty Carpenter.

Referring to American Express' own automated booking system, Carpenter said that "if a client hires us to select an electonic commerce travel tool, we will evaluate AXI, but recommend what is best for the client."

He said the new focus on consulting of all kinds is in keeping with the demands of the market, where "travel managers historically have been working hard at managing costs and have done an excellent job--but they are continuing to be asked to take more costs out." As a result, the organization has seen a "500 percent increase in requests for process reengineering work over the past year."

The company has been recruiting both internally and externally to form a workforce with consulting expertise on par with the "big five" consulting firms, Carpenter said. Two-thirds of the hiring has been completed, with 14 of the 16-member leadership team in place, and Carpenter expects to be fully staffed by July.

American Express Consulting Services is broken into four competencies: supplier management; process reengineering; policy, benchmarking and publications; and e-commerce--all of which now focus on both T&E and purchasing.

<B><CENTER>Procurement Takes A Role</CENTER></B>

Historically, American Express had organized its consulting services under three pillars--T&E purchasing, policy and process reengineering. But now, new areas of expertise are being added to the mix, including e-commerce and a broader "procurement-purchasing function" that includes travel as well as office supplies and temporary staffing. That's a tack also being taken by Microsoft (see story, page one).

Where in the past clients were looking for recommendations of programs for travel managers to institute, now they are looking for solutions, Carpenter said.

An example of the change in focus for Amex is last fall's formation of Performance Assessment Services, designed to help travel managers better communicate their achievements to senior management. The model "walks through each area of T&E, showing cost per mile, average ticket price and a benchmark against like companies of its size in the industry."

It also looks at T&E as a percentage of a corporation's total expenses and as a percentage of sales, comparing figures year over year and quarter over quarter. The final result is a report of about four pages that a "non-T&E person is able to read without explanation."

The unit also recently developed strategies to help clients maximize savings in fortress hubs, and is working on its car rental consulting approach to more accurately predict spend and discounts in different markets. After noticing a flux in surcharges, "we have done a fair amount to understand how to negotiate surcharges in order to build that into the cost structure," Carpenter said.

In addition, the company is expanding its practice to take on new customers outside of its existing client base. So far, Carpenter said, the Consulting Services unit has a great track record.

"We have found a tremendous payback in the services we've delivered. There has been a minimum of $1.57 returned to clients on every $1 invested."

To boost visibility, the Consulting unit is offering a free diagnostic assessment of major expense management program areas to its current customers.