Boston - Sony Europe
Electronics, a unit of Japan's Sony Corp., this year completed an initial
implementation of a consolidated travel management program covering the United
Kingdom and continental Europe. Culminating in a rollout between April and June,
the project provided insight into how a multinational corporation might assess
TMC options, stitch together partnerships, deploy various travel technology
components and align policies and procedures.
"In
FY11 we made a loss, so obviously there is encouragement to try to cut
costs," explained Marnie Readman, the company's projects category senior
manager for non-product procurement in Europe. "There was a lack of
visibility into our travel program costs across 29 different countries in
Europe with a lot of different languages and financial reporting systems. We
knew there was opportunity there."
Readman
detailed the initiative during a panel discussion here in July at a Global
Business Travel Association conference. According to the presentation, 18 of
Sony Europe's 29 markets previously had used a consolidated TMC, though account
management throughout the region was handled locally within each market. Sony
had been using agency onsite locations in Germany, Spain and the United
Kingdom, and seven markets within the region had an aggregate 30 percent
adoption rate of "appropriate transactions."
Selecting The TMC
Without specifying, Readman said Sony Europe
previously had used "one of the big four" travel management
companies. The advantages, she said, included standard reporting and a single
account manager who served as the main point of contact. But there was much
more to consider.
"We started communicating that we were
entering into a tender process way back in September," she said. "I
spoke to my colleagues in different countries to ask what worked well in their
current program and what they would like to see going forward, to make sure we
incorporated those things into the RFP process. We had to make sure we treated
everyone the same way.
"One of the things we needed across these 29
countries is 100 percent coverage, and with a couple of the TMCs we were
looking at, about half [of the locations] were owned and half were partners,
affiliates, etc.," she continued. "For the countries that were
owned—which is probably about 90 percent of the spend—that's great, we know
exactly what is going on. But for the other half of the countries—a smaller
amount of the spend, but within Sony everyone should be receiving the same
level of service—what we were looking for was standard, consistent service
across all of them, and we didn't have a great comfort level that the service
levels, and the ways that partners were managed, would be consistent.
"On the opposite end is Radius,"
Readman said. "Because there are SLAs that govern that the members—all
independent agencies—have to behave a certain way and meet certain criteria to
become a Radius agency, we knew there was good standardization across each of
those 29 countries." Moreover, switching to various local agencies under
the Radius umbrella facilitated adoption: "For instance, in Greece,
instead of going from one agency within Greece to one that is headquartered in
the United Kingdom, where there may be a bit of resistance, there was more
comfort to be with a local agency—but still with standard platforms, a standard
online booking tool, etc."
Sony
awarded the 29-country business to Radius in December 2011 and implementation
began in early April for the first batch of nine countries. Another nine
followed two weeks later, with the remainder making the switch in early June.
Selecting The Booking
Tool
Before
the TMC consolidation project, Sony Europe used an Amadeus online booking tool
in the Nordics and Traveldoo in the United Kingdom and across much of Western
Europe. In Spain, Portugal, Turkey and several other Eastern European
countries, no booking tool had been deployed.
"We
were open to having multiple OBTs but we were looking at how those OBTs worked
with the global distribution systems in the countries," Readman explained.
"In the United Kingdom and Portugal we have Galileo. In Turkey we have [Turkish
GDS] Troya and Amadeus, and they have different content. But for the majority
of Europe, it's Amadeus. So the functionality of the Amadeus e-Travel
Management OBT was much more dynamic to the Amadeus GDS in the rest of
Europe."
As
a result, Sony Europe opted for AETM across Europe.
Prior
to Readman's arrival at Sony Europe last year, the company had selected Concur
Expense as its expense management system. Asked one session attendee, why not
also go with Concur Travel? According to Readman, that was one of five tools
Sony considered. "In the United Kingdom, Concur Travel is starting to be
used a bit more but it isn't tried and tested in Europe. It's growing, but AETM
and Amadeus are very Europe-oriented ... so that's why we decided on AETM."
Readman
pointed to an Amadeus-Concur marketing relationship in Europe that helps
furnish "a plug-and-play for the booking data from Amadeus fed into Concur
so we can look at booked versus actual data."
Readman
also noted Sony's new deal to use German hotel portal HRS to augment hotel
content available to travelers outside the United Kingdom. "The arrangement that HRS has with Amadeus is quite useful," she explained. "The main
challenge really was Eastern European countries where hotels don't really buy
into the GDS, so HRS offers us extra content [within AETM] that we don't get through
the GDS."
Sony
Europe's goal across its 29-country European bloc is an online booking adoption
of rate 50 percent in year one and "up to 80 percent in year three."
Piecing Together Tech
The
booking and expense tools aren't the only technology components. Another is the
Amadeus Open Profile Suite, which according to panelist Kieran Hartwell, Radius'
senior vice president in EMEA, "manages the movement of all the Sony
people data into the various different systems." The human resources
module of Sony Europe's SAP ERP system feeds OPS to ensure proper profile information,
including cost center.
Another
key element is a single sign-on. "It's an efficiency tool; you don't want
to continually frustrate your travelers," said Radius executive vice
president Dee Runyan. "It is absolutely critical in this particular environment,
where there is a profiling tool and a multitude of technology parties on the Sony
side and on the vendor side."
Then
there's the Cetas pre-trip authorization software, furnished by GDSX. "Our
intention is to have the same approval process for offline as online,"
Readman said. "That's why we use the Cetas module; that's how we handle
redelegation, etc."
Sony's
pre-trip approval policy has "multiple tiers," Readman explained,
with in-policy bookings approved by line managers and out-of-policy bookings
sent to "the director who has senior responsibility for that cost center."
In the past, when designated approvers were not available, personal assistants
were authorized to stand in. "That is something we stopped," she
said. "The only people it could be delegated to are other directors in the
organization."
Aligning Policy
"In
general, when you are embarking on a change of TMC and then do with it a really
robust approval process, all of a sudden it's everybody's fault that it's not
working," Runyan remarked. "There are some definite things that need
to be outlined. Is this a process where you want to actually stop a transaction
from happening? That's an active approval process. Or do you want to make it
more passive? There are many factors to work through with your TMC as you
implement this to ensure transparency."
Pre-trip
approval is just part of Sony Europe's travel policy, which Readman described
as "not straightforward" and "something that has developed over
time." Owing to linguistic and cultural differences across the 29
countries, certain regional variations are accepted. "For instance, at the
moment, our French colleagues are entitled to first-class rail because there is
a [power] plug in the first-class compartment and there aren't any in the
second cabin. A standard global policy is what we want to get
to—absolutely—with an understanding of any idiosyncrasies."
Sony
Europe now is "getting really good management information from our TMC,
and we'll be able to monitor policy," Readman added. "We need to be
strict about our policy and have to show that we care about how much money we
spend. We'll be able to actually manage our travel, whereas before it was just
a transactional process and we didn't really manage our costs."
Challenges
Sony Europe appears well on its way to achieving
the cost control, policy compliance and efficiencies from regionally structured
travel management it has been seeking. But "we are definitely not here to
say it was an easy ride," said Hartwell. Noting the aggressive three-month
timeline for implementation, he conveyed "a conversation at one point
where we said, 'We can't do this. We have to stop now. We have almost every
resource possibly available already involved, and we just cant do it.' "
But Sony "within 24 hours" helped to resolve issues and Radius "managed
to meet all the agreed timeframes. There were a few things that didn't happen
on day one but those didn't have any disruption in service."
Hartwell
also noted the challenge of Spain, where "Sony has a trading arrangement
with a large department store that also happens to operate a large travel
management company." Spain, therefore, remained "out of scope"
of the European consolidation project.
According
to Readman, another issue popped up in Germany regarding a workers' council.
"The telephone system previously had the travel office on speed dial, one
button," she explained. "If we changed the telephone, so we could
have data recording and also divert calls to the head office, etc., it would be
a new telephone number with 10 digits. The workers' council deemed that to be
extra work. Our colleagues in Germany really helped us make the business case
to the workers' council that going forward this program would make it easier
for them."
Penetration Testing
Meanwhile,
data security is top of mind for Sony, not least because of a widely reported
2011 hack of Sony PlayStation customer data. As such, the company undertakes
"penetration testing," which according to Readman consists of "dummy
hacks to see how it easy it is to gain access to the data." In the
corporate travel realm, that led to some "pretty funny" questions
from Sony's technology personnel. For example, they asked about global
distribution systems and were shocked to learn that such systems compile
booking data, including names, phone numbers and addresses of Sony employees.
"From
their perspective, it was terrifying that we were transferring data and this is
where the data is being kept," Readman said. "We explained to them
that this is what happens everywhere, and this is what happens when you book
your own travel. It was a massive learning curve. It was a big challenge and it
did almost hold up the program. It took a lot of energy. They had to talk to
Radius, Travelport, Amadeus, etc. All parties in the process learned that you
take a lot of these things for granted."
Added
Runyan, "It's not just the TMC and the agents accessing information. It's
all those downline, third-party applications that could touch the PNR and store
that information somewhere. This experience with Sony really is no different
than the financial services firms—laser-focused on data security and personally
identifiable data, requiring everyone be PCI-compliant. For TMCs, we've been to
this rodeo before. The struggle in this case was with the GDSs because they don't
normally allow the level of penetration testing that Sony wanted to do. There
was a fine line and certainly a lot of discussion, but in general the industry
has upped its game regarding Safe Harbor and PCI compliance."
Moving
Forward
Now that the program has been implemented, Sony
Europe will monitor traveler satisfaction with Radius via feedback surveys
every six months. "That's largely subjective, but we do have metrics
within our SLA which are hard and fast, things like telephone answering,"
Readman said.
To maintain customer service levels, Sony opted
to keep the three onsite agency locations. "We didn't want to change that,"
she said. "Travelers are used to sitting down and chatting."
Moving
forward, despite "some snags" that have persisted, "we need to
demonstrate that this program is saving us money and providing us
control," Readman said. "Once that is done, we'll share our learnings
with our partners in Japan, the United States and other divisions."