Software manufacturer Autodesk has been challenged to effectively manage its travel spend amid double-digit percentage income growth in recent years. Now, to achieve cost goals for this fiscal year and further optimize its travel management program, Autodesk is not only using "soft" global travel policy mandates, but also generating extensive management reports to help identify cost variances from policy exceptions. The Fortune1000 company also is seeking to expand use of online booking tools, deploying remote conferencing technology and applying other cost-saving strategies.
"Even though we have had meteoric growth over the last several years, like others we are also influenced by vendors, suppliers and clients," said senior global travel services manager Bruce Finch during a recent presentation coordinated by the Association of Corporate Travel Executives. Like many other companies, Autodesk regularly explores ways to generate savings and, according to Finch, "as the economy has shifted, so has our focus."
Autodesk operates 138 offices in 65 countries and fields 3,500 travelers. More than half of its $3 billion in annual sales comes from outside its home market, the United States. Coinciding with its sales growth, the company's global T&E budget has jumped to $94 million, from $38 million four years ago, according to Finch's presentation.
Autodesk's global travel program is built around a global travel policy (which allows for more stringent, localized rules) and regional travel management companies. "We thought we could do it with one travel management company. We were not able to," Finch explained. "So we've picked regional players in each of the three geographies we operate in (North America, Asia-Pacific, and Europe, Middle East and Africa), who know the market well and at the same time are able to deliver to us consistent data to one TMC based here in the U.S. that is driving reporting for us."
That reporting (normalized for such regional variances as currency conversions) has become a key component of Autodesk's cost-control efforts. The company's travel department, in conjunction with its U.S. TMC, sends "400-plus global travel reports via email 'push' technology each month" to management, "from the CEO, to the CFO, to their direct reports, cascading all the way down," according to Finch.
Standard and on-request reporting provides "increased visibility" into traveler behavior and shows opportunities for cost savings and/or cost avoidance. Specific reports cover ticket level detail, use of advance purchase fares, online versus offline transactions, class of service, variances between what was requested and what was available to purchase, and hotel spend.
Finch acknowledged that managers initially were not paying attention to travel spending reports, given the company's rate of growth, but "if we can throw enough information at managers, then eventually they will take a look at the report and say, 'A-ha, so these are my real problem children here. These are the ones that are spending over $1,000 a ticket more than they have to be. This is where I can focus my efforts in terms of controlling my spend.'
"Toward the end of our fiscal year last year and at the beginning of this year, there has been a lot more focus," Finch continued. "We have become the trusted business partner for these managers to explain not only what the reports mean but what they can do to influence behavior in order to save money."
Autodesk's next steps for its reporting include collecting more regional data, benchmarking between divisions and implementing an automated expense management program which would provide the means to compare booked data with "consumed" data. "For any company, it is so important to measure the consumed piece," Finch said. "By the end of this year, we will have that entire picture but for right now, unfortunately, it is just the behavioral piece on the booked end."
Still, the behavior aspect can be of critical importance, Finch said, because "if you have a solid travel program, you won't be able to negotiate a fix" with preferred vendors that already provide discounts.
To help manage behavior, Autodesk now uses soft policy mandates around the globe. The travel policy says travelers "must"--rather than "should"--use the designated travel agency and corporate card. "Those language issues have helped us softly influence--in this particular environment--people to do the right thing," Finch said. "One of the demand management levers we pulled was making the document a little more real.
"When I say soft mandate, we want to make sure we put fences around what you can and cannot do and describe what those things are, but when it comes to beating people up, we have various ways to get around those policies," Finch explained during a follow-up conversation with The Transnational. "We are a coach company worldwide. Even if you are on a 15-hour flight, our policy is to fly coach. However, you can go to your divisional vice president and get approval to fly business class. It is just that we have a process in order to get there."
Through the company's reporting, Autodesk managers can see cost variances between coach and business class for particular flights, manage their own T&E budgets and make decisions to help the company strike a balance between cost savings and employee retention.
In terms of online booking, Autodesk has "really driven our TMC costs down tremendously" by increasing adoption and, therefore, incurring lower transaction fees. Adoption levels now stand at 85 percent in the United States, 62 percent in Canada and 56 percent across Europe.
"We were languishing in the 30 percent range about four years ago and we did a big study that found we can save a substantial amount of money by increasing that," Finch said. "We did a number of programs internally to drive awareness of what those cost savings could be."
Autodesk now is seeking to bring an online booking tool to Australia and Singapore.
Meanwhile, Autodesk began installing remote conferencing technology in certain locations and plans to begin measuring if and to what degree bookings are reduced on key city pairs. "It is not just a money issue; it's also an increased focus on corporate sustainability," Finch said. "We're trying to build awareness and establish a benchmark."
The company built a calculator to determine travel savings--from avoiding airline tickets, hotel stays, food, etc.--and carbon emissions reductions. Autodesk's "telepresence" locations include "a number of sites" in the United States and new sites in Shanghai and Europe, with plans for sites in Singapore and elsewhere.
Other cost-control methods include promoting use of nonrefundable airfares and low-cost carriers. On the lodging front, Autodesk in major cities negotiated both an economy and mid-range hotel option. "We have the 'this is where I would like to stay if I were on vacation and somebody else was paying for it' option and the one that is 'I really have a small travel budget so I really have to stay in this particular hotel and it offers me everything I need,' " Finch explained. "Our strategy has been that at least we have these two options."
Meanwhile, the company will endeavor to collect more data on its global hotel transient travel costs, build more regional hotel reports and marry them with meetings spend data. "Hotels are probably the most difficult product globally to get our arms around," Finch acknowledged.
Though companies like Autodesk can apply many tactics to cut travel costs, across-the-board budget savings goals present tough scenarios for global companies. Finch explained that one division that has travelers who previously booked "whatever they wanted" can attain the savings goal simply by buying smarter. But another division, which already used a lowest price of the day policy, might have to cut trips "or maneuver however they can" to reach the same savings goal.