Midsize Firm Mandates All

Chicago-based real estate and investment management firm Jones Lang LaSalle has an integrated travel program that uses mandates to leverage every last cent of its $16 million annual travel spend, which includes less than $10 million in U.S. booked air volume.

The company said its 93 percent domestic self-booking adoption has helped save more than $1.5 million in airfare annually. An integrated travel, charge card, calling card, mobile phone and PDA purchasing program has pushed those savings further into the millions. Vice president and director of office services Robert Rea attributed the success of the program to the effective procurement and automation backed by mandates and complete support from senior management.

"We create policies and we mandate them," Rea said. "In many instances, we give internal clients choices, but we expect them to conform to policies we establish. The mandates keep employees from spending their own time looking for the best deals when we've already done it for them. Also, we negotiate volume-based discounts, so we use mandates to drive the use of preferred vendors."

Rea, who reports directly to the COO, spends about 10 percent of his time managing corporate travel. The rest of the time he handles procurement for a host of other employee services, including the corporate card, phone cards, mobile phones, office machines and food services. "Office operations are a considerably larger expense than travel," Rea said, "but travel is definitely one of our top five expenses." Jones Lang LaSalle has roughly 1,600 North American corporate cardholders, with approximately 125 offices around the globe.

In the midmarket, such procurement-mindedness still is rare, said American Express vice president of sales Andy McGraw. "The middle market, especially the larger companies, is beginning to move to a procurement environment but they are still the late adopters," he said. "They are afraid of losing control over service, and they have a basic fear of change. However, more companies are learning that if you have the right service level agreements, you can cut costs with automation and still maintain a high level of service." Amex is Jones Lang LaSalle's travel management provider.

Day-to-day management of the company travel program is the jurisdiction of corporate travel manager Leslie Andrews. "I maintain the travel program, keep up relationships with preferred vendors and keep an eye on trends," she said, adding that the company is able to manage its travel program with a staff of only two because it mandates and automates as much of the program as possible.

Jones Lang LaSalle's online adoption rate is approximately 43 percent for international travel. There are no exceptions to the mandate for online booking and no special agents for corporate VIPs. "The only slippage is on multiple leg, multiple city itineraries, where there is an unusual degree of difficulty making travel arrangements," Rea said. Amex contacts Jones Lang LaSalle if an employee attempts to make a call center booking. "We contact those policy violators via e-mail," Rea said, "and if it persists, we contact their supervisor. This is virtually 100 percent effective. Our ticket costs are declining. This year, the number of trips is the same as last year, but our spending is down. Our mandated system allows us to purchase on a level with companies much bigger than we are."

The self-booking tool places only the lowest fares before employees and only preferred carriers' routes are shown, helping Jones Lang LaSalle reduce its air cost by 15 percent. The automation of bookings has chopped transaction costs by 50 percent. "We have the ability to move our spend very quickly; that is the number-one most effective tool for being able to negotiate favorable terms with suppliers. We can make commitments to our vendors that most companies can't," he said. "Part of that is that we have the information we need, and we have a mandated program. So, if we want to move our spend on a city pair to an airline we can do that very quickly and efficiently. We can change our online booking tool RezPort Plus in 24 hours, so it shows the flights we want."

Jones Lang LaSalle's travel program also has generated savings through its effective integration of travel with other areas of corporate purchasing. The company has pulled together mobile phone service and calling cards with travel and housing, all on the American Express corporate card. Rea has been able to provide employees with discounts of about 20 percent on global mobile phone services, as well as discounts on the purchase of phones from his preferred suppliers, Sprint PCS and AT&T Wireless. The firm also has an agreement with Palm on the discounted purchase of handheld computers, Rea said, for "any employee who wants one." All of these services are billed to the corporate card. The corporate card program will be online by next summer, Rea said, allowing employees to view their statements and make payments over the Web.