<FONT SIZE="+3"><B>Co. Pilots For USAir</B>
<I> Nationwide Insurance Among First To Use Airline Auto Booking System</I>
By Jay Campbell
<I>Columbus, Ohio </I>- Nationwide Insurance last month became the first company to book trips in real time using Corporate Travel Works, the automated booking system developed by USAir and Galileo.
The market test is part of Nationwide's vision of the ultimate way to deliver travel services, which is "agentless, ticketless, cashless, receiptless and paperless," said director of corporate money management Mike Maier. "If it proves feasible, this product could become the platform on which to complete our vision."
Nationwide is one of a small group of companies that is making travel arrangements through a corporate automated booking system provided by an airline or CRS. Among those, United Airlines said its Corporate United Connection will move into live testing this month with Hewlett-Packard. One company that reportedly was alongside Nationwide in its progress on testing USAir's product (<I>BTN</I>, March 18) remains a few months behind, USAir said.
The Nationwide system runs on Windows 95 and is no more difficult for the user than the Priority Travel Works software that USAir sent to its frequent flyers. Like PTW, CTW enables simplified booking of air, car and hotel using personal profiles and templates. The difference between PTW and the corporate version is that anything can be customized by the company-most importantly, restrictions on the display of rates and suppliers according to policy. The software also provides for data capture through Galileo.
Maier said he expects the software to make travelers' vendor selections comply on the front end, an area that the company has not been able to measure. "How much money is this going to save us? It could be a huge number-there's got to be tremendous slippage," he said. "We would like this product to eliminate slippage and provide us with a lot more information about a specific trip."
"We have two customers for this service: the corporation, in that we will help it reduce costs and improve travel expense management, and the traveler, to whom we're providing a user-friendly way to book travel," said USAir vice president of marketing and distribution planning Rita Cuddihy. "We don't want to be in the travel management business; our goal is to bring down costs so that people will travel more."
Although cost cutting may be the driver of the industrywide demand for automated systems, how to set up cost structures with such technology remains unclear. Because Nationwide just began allowing its 30-person pilot group of travelers, secretaries and travel arrangers to use the software three weeks ago, it too is unsure of the potential cost structure.
"We can't change the cost structure until we displace the labor," Maier said. "Then we'll negotiate. We'll be looking at relationships and whether we will share the labor savings."
According to Cuddihy, "there is no predetermined way that this will work. USAir has its costs of transportation and its costs of distribution, and all of these are borne by the customer. We're not in it to cut the cost of distribution, but if we help get those costs out, the customer gets the savings. In the end, if the corporation pays, the corporation also saves."
However, all agree that cost savings would come-for the most part, if not completely-in the form of cuts in travel agency labor.
"I liken this concept of direct bookings to the corporation finding itself painting Tom's fence for him," said Maier. "We'll be doing the labor the travel agency does, and depending on how this technology is embraced by our travelers, there is a distinct possibility that we might abandon the traditional travel agency role and change them into a technology center."
Both Nationwide and USAir credited Nationwide's agency, Peoples Travel, for helping to implement the system. "I don't see how you could bring this to market without the travel agency," Cuddihy said.
The agency will continue to handle trips for those travelers who don't feel comfortable using CTW, but Nationwide expects 80 to 90 percent of trips to be booked directly when the program is fully rolled out.
"There will be jobs for the agency," Maier said, "but they'll be different. They'll be training travelers, monitoring compliance, maintaining the systems-being the technology experts." The agency also will do ticketing and delivery, at least until ticketless travel becomes more widespread and interlining is available.
According to USAir and Galileo, few companies are ready for even the market test Nationwide is doing. It was the company's recent efforts at reengineering that made it USAir's top candidate.
With the help of its travel vision team, made up of a dozen frequent travelers from many departments of the company, Nationwide has over the past few years installed a corporate card, outsourced cash advances, created an automated expense reporting system and replaced 100 percent auditing of expense reports with selective auditing, among other initiatives.
"We wrote our own front-end screens to support 225,000 to 250,000 expense reports a year," Maier said. "Travelers enter their expenses online and they're sent off to their boss for approval. Payments are made within two business days."
The company, which purchases $11 million in air annually, has processed 90,000 electronic expense reports already this year. However, the program is only temporary because it is on a mainframe system, and Nationwide's information systems staff is directing everything away from mainframes, Maier said. Nationwide will be looking for that third piece to the automated process and is considering Galileo, among others.
In setting up for the market test of CTW, Nationwide last fall gave PTW to 60 users, drawn from a base of experienced users of Corporate Apollo, as a test. When the company installed CTW, it created the current user group.
Since then, the company has had to jump some technical hurdles. "Nobody in the company is using our telecommunications system to access the outside world like this," Maier said. "We've had to make decisions on building firewalls and making this system work through our local area networks. We're still working things out."
Asked if he feels comfortable hurtling through the uncharted waters of such technology, Maier's answer was simple: vision.
"If you know where you're going, you don't take as many wrong turns to get there," he said. "There's a lot of stuff out there in the marketplace that offers bits and pieces of what you want, but when you look at it in a total vision, it isn't going to link up together. So we've said 'no' to a lot of things."
"In new technology markets, there's a phrase that says you don't want to win the race to product launch, you want to win the race to product adoption," said David Near, Galileo's vice president of intuitive products and interactive services. "The real question is, who is first to figure out how to make sure their product is adopted? We're a lot closer to solving the adoption puzzle than anyone I've seen or heard thus far."
The next item on Maier's agenda is the elimination of paper receipts. "We want to take nightly feeds from American Express and build those into the travel management base," he said.
Maier also is interested in self-completing expense reports, which should be in place in the "not-too-distant future.