Ingersoll-Rand Takes Tech Leap

Ingersoll-Rand Takes Tech Leap
Online booking System latest in Multimillion-Dollar Travel Overhaul

By Cheryl Rosen

Woodcliff Lake, N.J. - A cooperative effort by the corporate travel and the shared services departments at Ingersoll-Rand Co. is resulting in a major overhaul of the company's $30 million air-volume travel purchasing process. This week it will begin testing an online booking system as it continues the rollout of automated expense reporting and the consolidation of its global account with a single travel agency.

Ingersoll-Rand's 6,000 travelers soon will be booking trips through Oracle E-Travel and filing expense reports electronically through IBM's TRIPS system. All expense reports will be forwarded to Unisys Corp., which will handle auditing, filing and storage on an outsourced basis.

The goal, said Bruce Berkey, manager of finance for Ingersoll-Rand's common administrative services, is "to have everybody in the U.S. on IBM expense reporting and E-Travel by May." According to the financial plan, the automated systems will pay for themselves in less than two years.

While U.S. travelers get used to technology, those in Europe are seeing the rollout of American Express travel management services, with which Ingersoll-Rand travel services manager Marian Shapiro has been working since 1998. With about 88 percent of U.S.-booked travel consolidated with American Express, Shapiro has brought the program to the United Kingdom and France. It is debuting now in Germany.

The seismic shift is "all part of Ingersoll-Rand's common administrative resources vision for financials. The idea is to have the purchasing information centrally," Berkey said, "so we can look at what's going on across the company, but then give the data to the business units so they can run reports themselves without having to beg someone else for the data. It's centralization without the central control."

All that is not to say that there will be no control at all. Unisys will pull 10 to 12 percent of all expense reports for random auditing. Outsourcing the process to Unisys costs about the same as having two internal clerical staff, Berkey said, noting that "in the time frame we have, we didn't feel we could set up a system internally."

Berkey credited Shapiro with being the force behind "bringing technology into the travel universe," which serendipitously occurred just as the company moved to "an overall plan to modernize all the technology in the financial arena," rolling out the Oracle financial platform companywide. The two, both intrigued with the possibilities, brought the idea up to their mutual boss, the director of CAS finance.

"After 20 years in the industry, I wanted to make sure the company was using best-in-class solutions," Shapiro said. She and Berkey made a formal business case for the IBM system, and a less formal presentation of industry data to sell the idea up in the organization.

Berkey noted that the impetus came from concern over travelers using public leisure sites to book travel instead of the designated agency. "While it's hard to track that volume, we could see the market share coming through our travel agencies deteriorating. We think E-Travel will help encourage people to not just find the lowest fare, but also to book tickets, which will minimize our expense with the travel agency and help enforce travel policy upfront," he said. While Ingersoll-Rand will not immediately mandate that only preferred suppliers be used, "we'll probably migrate into that. We're trying to do one thing at a time and make it as painless as possible until we get the acceptance."

Using a "train the trainer" approach at each business location, Ingersoll-Rand is banking on a fairly high adoption rate of 25 to 30 percent, which will "offset the cost of the system in maybe 14 to 15 months," Berkey said.

Even though the technology changes come as part of a bigger initiative that is installing Oracle financial software companywide, the choice of Oracle E-Travel was made independently. "We weren't tied into an Oracle solution. E-Travel was the front-runner in our minds, and when Oracle bought them, that was a little more icing on the cake," Berkey said.

But for Shapiro, "the fact that we were an Oracle shop and the architecture would all fit together" was a selling point. Also key were the facts that "we wanted to retain independence from the travel agency community, and also to align with a provider that offered direct connections to suppliers. There certainly is an interest in that."

Oracle E-Travel is developing its ETLink system to provide such direct connections between suppliers and buyers, but "the technology is not in place yet--certainly not from a reporting standpoint," Shapiro said. "We are hoping to be able to get consolidated spending reports for ETLink from E-Travel, but it needs to be in an industry standard way."

On the expense reporting side, Berkey acknowledged that with the previous paper-based system, "We didn't know how much we were spending with each airline--we had the reservation data, but we didn't know what eventually got spent. With IBM we'll have spending information for every element of expense for our 6,000 travelers, couple that with the E-Travel reporting package, analyzing what type of expenses weren't charged on the corporate card and asking why not. We'll catch the reservation data at the front and the actual spend at the back."

In the shared-services spirit, the company will pay travelers' American Express corporate card bills centrally, but allow travelers and business units to review the data.

Ingersoll-Rand now is working with IBM to finish making the NEDS system "multi-currency and multi-language," and will roll out expense reporting first, followed by booking, in the United States and then in the United Kingdom. "We'll probably do this concurrently--the shared services group in the U.K. will probably pick that up themselves and roll out expense reporting over there while we bring on E-Travel here," Berkey said. "When E-Travel gets a little bit better on the international side they'll probably pick it up over there--they're maybe six months behind us in the cycle."

Berkey expects a "total payback on both systems within two years--and that's just the dollars and cents. That's not considering the information we'll be able to get to help us with negotiations with vendors. In most financial systems all this information is kept in the general ledger, but these two systems will capture so much more information for us in the Oracle databases. Now we'll be able to provide data to the business units, and they can go in and read it and report on it whenever they want. The philosophy is that it's their data--we're going to make sure the system works and the rest is up to them."

By the third quarter of 2000, Berkey expects a new release of the NEDS system, which will allow for audits by individual business units--and also capture full hotel folio data from participating properties, a concept in which Berkey is most interested. "IBM asked for volunteers to participate in the pilot program and we volunteered," he said. "It's the way to go; it will save so much time and trouble for everybody."

Test bookings will be made on the E-Travel system beginning this week, with a rollout scheduled to begin in December, and then pick up in the first quarter of next year.