<B>Dell Eases In Booking</B>
By Cheryl Rosen
<I>Round Rock, Texas</I> - Dell Computer Corp. may well have set the slow-rollout record for online booking, holding out for a full year after signing a contract until its online supplier and travel agency came up with a process that involved no human intervention. But the patient approach has paid off. Today, 20 percent of Dell's bookings are coming in online--and close to 90 percent of those are what Dell calls "frictionless."
For those agentless bookings, Dell is paying Maritz Travel Co. "in the $30 to $40 range," for a typical full-service transaction cost, a 40 percent reduction in the cost of a transaction for online booking. "We said an e-commerce transaction has to behave like an e-commerce transaction. As soon as you have it out on the floor and have agents working on it, the e-commerce part becomes a moot point," said Dell's sen ior manager of global travel Julie Thomte Rabern (formerly Julie Thomte, who got married in March). "We held off our rollout because I didn't think the functionality was there and also because I felt I had to demonstrate a cost benefit by reducing the cost per transaction."
Rabern and preferred travel agency Maritz Travel brainstormed on how best to handle the process of fulfilling online bookings, beginning by moving those reservations out of her onsite office at headquarters to a reservation center.
Rabern said she "actively went out and investigated the alternatives, but quite frankly found the market wasn't there." While Sabre said it would be getting into the low-cost fulfillment business, it was "pretty much in the infancy of defining what that means for them as a company."
Some agencies were handling online fulfillment on the leisure side, but "no one had yet leveraged that into a corporate model, where the whole reporting and data side make the transaction more complicated."
For Dell, the available choices were not acceptable. "The focus of travel management has been to drive reductions in cost through increased use of preferred suppliers, and no one was seeing a reduction in operating expense through online tools because no one had created the efficiency," she said. "The onus is now on the agency community to create efficiencies, and the onus on us is to drive transactions--to drive the functionality of the tools, and then train our people to use them. I thought, we've got to step out of the traditional mindset of how we approach a transaction and file finishing. So I set the expectation with Maritz that an e-commerce transaction should be significantly lower in cost and that I had a short timeline to achieve that."
Maritz responded with a proposal to handle Dell's online bookings through its new eCom Solutions Center in St. Louis (<I>BTN,</I> April 24), while full-service transactions will continue to be handled through the onsite.
Convinced the system would work for the corporation, Rabern began testing for customer reaction last summer. After a beta test with 300 travelers, she waited through three updates of BTS, designed to speed up the process. By October, she felt the system was ready.
Not every piece of the puzzle has been completed yet, Rabern acknowledged, with the hotel booking piece still lagging noticeably behind. But she is focusing on the hotel capability for this year.
"The obstacle is the functionality of the tool," she said. "It's not the easiest module to use and it's limited in the number of hotels that come back in the display. But we see hotel as a rich opportunity to drive increased bookings through the program."
Indeed, like most travel managers rolling out online systems, driving usage of the system is the biggest challenge at this point. But she considers herself lucky to be in "the perfect environment to deploy this kind of tool, with the full support of my senior vice president. It mirrors the Dell model and our whole e-commerce strategy."
When BTS adds a little more functionality, probably next year, Dell is likely to mandate use of the online booking system. "Dell is not a real mandate culture, so the product has to be there," she noted. "And when I have a pricing model in place, it'll be a much easier sell."
Already, though, 20 percent of tickets are coming through the online channel, and Rabern's goal is to push that to 40 percent by year-end. But she is a patient woman, and again, she is waiting for the next release.
"If I'm happy, I'll drive the product from a senior management point of view," she said. "But I don't want to leverage that senior level until it's the right time to do so. I don't want to pull that cart twice."
Unlike some corporations that are mulling charging back the cost of reservations to individual travelers, Rabern likely will begin charging back the differing cost of telephone versus online bookings to each division, so senior managers feel the impact--and share the savings--of using the system.
"When the individual travelers take accountability for the cost, it becomes a much more compelling story, and eventually that's the way I want to go," she said. "But the charge for the reservation doesn't always show up at the same time as the charge for the transaction in the billing cycle, and doing it that way also gives travelers so much visibility of the cost that they start asking why we are paying at all. I don't want to have to explain that to 25,000 travelers. That's a discussion I'd prefer to have at a cost center level, where I can deal with the vice presidents of the divisions and have them drive behavior within their own organizations."
Also on Rabern's 2000 agenda is a plan to move the relocation and job interview processes to the online environment. Almost a third of all Dell transactions are related to the hiring process, she said, and she has been pushing Sabre to expand the system to handle such "non-profiled" travelers. The plan Rabern is "confident will be released very soon" would offer Dell interviewees a unique, password-protected URL for booking their own reservations," and that would be relatively easy to mandate too," she said.