IBM Gets Folio Data

<B> IBM Gets Folio Data</B>

By Maria P. Vallejo and Cheryl Rosen

<I>Armonk, N.Y.</I> - Tired of waiting for an industry-wide solution that gives travel buyers access to hotel portfolio data, IBM has come up with a solution of its own.

Every night since September, as the local Crowne Plaza prints out folios to slide under the doors of departing guests, it also sends copies of the bills of IBM employees over the Internet directly to the company's NEDS travel expense reporting system.

"The whole industry has been waiting for folio data, and now we are crossing the last frontier," said John Rosato, IBM's manager of worldwide employee disbursement systems, who found the software and made the concept happen. "The software sits by the hotel's property management system, looks at the data and recognizes the IBM contract number that's on all reservations made through our agency. If you're geting the IBM rate, the data's going to be there."

Indeed, the solution is surprisingly simple. The transmission of the folio data comes by way of a relatively inexpensive piece of software, Report Automation System Capture, or RAS-Cap, from DB Technologies of Iselin, N.J. Two hundred hotels already use the original RAS product; for them, all DB needs do is add the "Capture" piece, which searches for and reports on folios that have an IBM identifying code.

For this pilot test, the link was built specifically for IBM, which footed the bill. But DB plans to market the product to all takers, said president and CEO David Wechsler. The complete RAS system, along with the Cap software module, costs between $5,000 and $15,000.

IBM and DB now are searching for an economic model that will make it possible to distribute the product to hotels nationwide. But in any event, IBM plans to install the software in its top 25 to 50 properties in 1999.

"The software doesn't have to be installed in every property, just in every chain," said Rosato, who is a longtime member of the NBTA Hotel Committee. "And there's a significant opportunity here as hotels adopt the model, that instead of sending data direct to the corporation, someone could consolidate it in some way and send it out to all the companies that want the data, rather than each corporation cutting its own deal."

At this point, he said, he "does not know if that center cog is going to be IBM or not. I'm just focused on our internal T&E processes."

Meanwhile, Rosato's manager, IBM project executive for worldwide employee disbursement Tony Angelo, who commissioned the pilot, suggested that other corporations might be willing to partner with IBM and share the cost of installing RAS-Cap software at major hotels.

"There has always been a belief that getting folio data was possible, but that it had to be done through the credit card companies, which meant that the data had to go through a third party," Angelo said. "Now we believe we have found a potential solution that the industry and hotels can implement independently of property management systems and card companies feeds from hotels."

For IBM, the software provided the final piece to the paperless processing puzzle it has been trying to solve since 1995, when the IRS upped the expense threshold for which travelers need to file receipts from $25 to $75. When the IRS ruled in 1997 that electronic receipts were acceptable (<I>BTN,</I> June 23, 1997), IBM changed its corporate policy to mandate receipts only for charges over $75 that were not on the corporate card--but still found, to its dismay, that the vast majority of expense reports still needed to have their paper hotel folios attached. Said Angelo, "We went electronic for air and car receipts--but how many trips have no hotel?"

Now, RAS-Cap solves that problem by screen-scraping the hotel folio data and e-mailing it in ASCII format back to the company. Hotels that have the product also could move to a paperless environment and do their night audits online, Rosato noted.

"We've always been looking to streamline the process and take out the manual steps, and those got down to a short list," Angelo said. "Our original thought was to force the folio issue with hotels, but then John came upon this simple but elegant solution--and the data so far has proved the concept. It takes a hotel bill of $302.50, for example, and breaks it into Night A, Night B, food and incidental charges. Then our internal NEDS system takes the detailed information, matches it to the electronic expense report and substantiates the bottom-line credit card charges."

Though he declined to estimate the potential savings to IBM from a purely electronic process, he did say that as the nation's largest travel buyer, IBM "could probably fill several warehouses for the sole purpose of holding paper receipts."

In 1997, IBM's U.S.-based employees bought $400 million worth of air tickets and submitted 1.2 million travel-related expense reports.

Meanwhile, at the Crowne Plaza in White Plains, where the pilot was held general manager Ann Peterson said she will be traveling to Dallas this week to make a formal presentation to the hotel company's executives about rolling out the software to other IBM preferred properties, including Crowne Plazas in Manhattan and Atlanta.

The White Plains hotel was chosen because of its close proximity to IBM corporate headquarters, where employees and visitors deliver about 13,000 room-nights a year of business. Since the pilot began in early September, the system has forwarded 2,000 folios to IBM. The data has been 100 percent accurate, Rosato said.

When the pilot first began, Peterson personally received an e-mail copy of every transmittal to monitor the system, but she no longer deems that necessary, she said. IBM employees were advised of the test and offered the option of declining to participate, but none did.

Historically, some industry insiders have maintained that hotels have dragged their feet on providing folio data to corporate customers because they felt the data would only fuel demands for deeper discounts. But Peterson believes the electronic process will only strengthen its relationship with IBM, which in any event always had access to full folio data through its expense reports.

Automating the process "makes it much easier for guests, so hopefully we will become their preferred hotel," she said. "And IBM does such a tremendous amount of business here anyway that negotiating a lower rate is not a consideration."

DB Technologies, meanwhile, is considering stepping into the role of becoming a clearinghouse for corporate folio data, Wechsler said. As use of its software expands beyond Crowne Plaza, DB Technologies could reconfigure the system to work with the various property management systems, link travel buyers' e-mail addresses to the system and maintain that list, and consolidate folios from all hotels into one file.

"Somebody has to make sure the companies requesting information are getting it, to accumulate the information of all hotels and parcel it to where it needs to go," Wechsler said. "We can add something in the middle to simplify the data and eliminate the day-to-day drudgery."

Upon hearing of IBM's solution, industry insiders shared some of its enthusiasm. "We've all been looking for receiptless travel for some time, and it looks like the big companies like IBM, Siemens and Hewlett-Packard in the next couple of years will build the interfaces to make it happen," said Bob Langsfeld, of Langsfeld and Fazio Associates in Incline Village, Nev.

In addition to speeding the process and cutting cost for the corporation, he noted, a system that automatically fills out travelers' expense reports can increase compliance and deliver more complete spending data at the corporate level. "I think this a workable solution, and I think corporations will want it," he said. "While they are very cautious about changing their expense reporting processes, the payback will be quick. I think CFOs will be enablers of the process--but I'd advise my clients to wait until the program is a little more mature."

As far as a marketing plan, he suggested, "If I were the vendors here, I'd talk to the enterprise systems (like SAP, Oracle and PeopleSoft)â and if I were IBM, I'd make it a feature of my expense reporting product."

Agreed travel management consultant Tom Wilkinson of Alexandria, Va., "IBM clearly has the volume to make its hotel partners willing to cooperate on this project--what's unfortunate is that it can't be done at all hotels."

Wilkinson added that he does "think corporations would pay for folio data, but I don't think they would pay a lot, since the system does not provide data from every hotel. Still, it's an interesting model. And heck, even if you have 50 percent of the data, that's a huge productivity enhancer.