Tech Aids SOX Compliance

With the first Sarbanes-Oxley filing finally complete, travel managers and suppliers are seeking new ways of using technology to streamline the audit process, increase corporate governance and drive out cost.

According to a survey released last month by the Business Roundtable, an association of CEOs from 160 U.S.-based companies, 47 percent of respondents said the cost of achieving Sarbanes-Oxley compliance topped $10 million last year, while just under one-third had compliance-related expenses totaling between $6 million and $10 million. Such expenses included technology investments and the hiring of auditors.

While most of these costs were not travel-specific, John Ohaver, vice president of Connecticut-based consultancy Management Alternatives, said that travel departments increasingly will feel the impact of compliance-related investments.

"The trickle down is now coming to the travel department," he said. "Companies had to be compliant with Section 404 for the annual year that ended Dec. 31, 2004. For the most part, companies met that deadline. Many companies are saying, 'We've done that, now what is the second tier?' It goes all across all corporate boundaries and increasingly it's hitting travel, which is potentially ripe for abuse."

For many, part of that "second tier" is automation, particularly in online booking tools, to more efficiently drive traveler behavior and document processes from the front end. Several online booking tools are responding to customer concerns about corporate governance with such enhanced offerings as real-time traveler tracking, proactive exception reporting and more flexible booking of non-employee travelers. Pre-trip approval, many buyers and technology providers agree, may be the most relevant tool immediately impacting the travel manager's ability to drive and monitor SOX compliance today.

Illinois-based technology service provider Trondent Development Corp. recently partnered with Sabre's GetThere to enable the online booking system's pre-trip approval function, a capability achieved through integrating the booking tool with a preexisting Trondent product called AirWeb Authorizer. A flexible, customizable function, AirWeb allows travel managers to write approval policy directly into the booking tool, preventing unnecessary manual interaction with transactions, while at the same time recognizing when a transaction should be kicked out of the online fulfillment queue for further approver attention.

"This kind of tool plays right into the requirements of publicly listed companies to disclose various information," said Theo Szymanski, director of sales at Trondent. "We've had a number of conference calls with customers who've said they're looking for some kind of an automated tool that enables the company to generate reports and documented proof that authorizing managers within the company have approved a trip based on mandated policy guidelines."

Other online booking systems, such as the new Amadeus E-Travel platform, have embedded in their pre-trip approval products the ability for travel managers to create an automated chain of command, identify "fallback" approvers should a primary authorizer be unable to handle the request and set a running clock on approval timing once a transaction has entered the system.

"You're able to set it up based on your HR hierarchy and from there you're able to put in specific guidelines around who can approve what and demonstrate that your tool actually does that and is in compliance," said Matt Hausmann, vice president of marketing and business development at E-Travel.

Hausmann has seen growing interest in pre-trip approval from an increasingly tech-savvy corporate client base in recent years, due in part to the new SOX-imposed requirements. "Companies are still trying to figure out what Sarbanes-Oxley actually means. They're trying to figure out whether they can use online booking tools as a proof of compliance. I'm not an expert, and experts may laugh that I even said that, but there certainly seems to be more of an interest in terms of the administration of the product and what it can do."

Though automating the documentation of spending behaviors through an online booking tool may not ensure compliance, experts said that such functionalities as pre-trip approval certainly help to clearly define the audit trail of all travel spend, SOX-compliant or otherwise. Today, most available online booking tools, including those created by American Express, Carlson Wagonlit, Expedia Corporate Travel and Outtask, among others, maintain some level of pre-trip approval functionality.

"In the past, travel managers may have required some kind of approval from a boss, but it wasn't documentable," said Management Alternatives' Ohaver. "Now that these tools are coming out and are more robust than they were several years ago, it does put some kind of a time stamp on there. It does verify who approved it."

Ohaver also emphasized that, in maintaining SOX compliance, pushing bookings through the agency of record remains paramount to the actual mode of booking.

"When I'm talking to clients, I say, 'I don't care what tool you use or how you book it, whether over the phone every time, with Travelocity, Orbitz, Expedia, or fully automated through the booking tool. Making sure it goes through the agency of record is considerably more important than the mode of booking,' " Ohaver said. "Does a booking tool make it easier? Yeah. Is it easier if you're going to have an automated approval process? Absolutely. It should be a documentable process, and that is a Sarbanes-Oxley issue."

While technology often emerges to fill a specific niche or further streamline laborious manual processes, Sarbanes-Oxley may not be creating new space for product development, but rather encouraging people to find new uses for preexisting solutions.

"Technology should help in putting better controls in place. It's all about the control. You don't want a CFO who takes a $15,000 trip around the world without having any controls in place," said Yasuo Sonoda, travel manager for software development giant Macromedia, who currently employs the services of both Amex and GetThere. "That's what Sarbanes-Oxley is trying to address, so you don't have any kind of fraudulent revenue reporting or expenditure reporting, and the technology needs to help. It's supposed to be a tool that's available for us to do our jobs better and in a more streamlined way."

~Jay Boehmer contributed to this report.