Eastman Kodak Co. during the past three years has been taking its travel program global by consolidating with one travel management company, concentrating worldwide volumes with preferred vendors and standardizing certain processes and policies. The latest steps this year coincided with a company reorganization that shifted travel operations to Kodak's global purchasing division from its global shared services group.
"The fact that purchasing is aligned with travel has been a great benefit to us for globalizing our program because the purchasing organization at our company has been very global for a number of years," said Kodak manager of global travel and fleet William Lasky. "For anything we procure, we start out with the assumption that it can be done with a global sourcing strategy and back off from there if is appropriate to become more regional or even local."
A globally consolidated travel program, Lasky said, provides Kodak with "more leverage and visibility into how we are spending our travel dollars, euros or whatever. Especially in the current economic environment, it enables us to be as lean as we can possibly be."
[PROFILE_1]Kodak's purchasing function operates via worldwide commodity managers responsible for global sourcing. They work "in tandem with the internal Kodak client responsible for using that particular commodity," Lasky said, and may be supported by a team of regional and local commodity managers.
Lasky fulfills the role of travel operations manager and is the internal client working with the worldwide travel commodity manager John Beerse. Beerse "has responsibility for all" travel vendor negotiations, Lasky said. "The resource structure that [Beerse] has is a mirror image of the resource structure that I have from an operations standpoint." For example, in Europe there is an individual responsible for travel operations and another person responsible for travel procurement, and those two work closely together.
Lasky, who once held the worldwide travel commodity manager position, is a purchasing veteran with more than 30 years experience. In his current travel operations role, Lasky reports to Kodak vice president and director of worldwide purchasing Ricardo Gonzalez.
According to Juan Perez, BCD Travel vice president of account and operations management and Kodak's global account manager, "global services really wants to focus on the user experience, and procurement likes to buy things, and because they also have other things to buy, sometimes they don't pay attention to the operations as closely as they can. But in Kodak's case, it is unique because Bill still has a commodity manager assigned to him, and he can focus on the operations piece. That's the best practice."
BCD Travel's account management structure mimics Kodak's internal team, with a global account manager (Perez) and regional managers located close to Kodak's regional staffers.
Pressing The Button
The travel consolidation project began in earnest in September 2006 when Kodak began to expand its relationship with BCD Travel. "When they first consolidated, they were doing what everyone else was doing: local country service," said Perez. "After a couple of years of understanding their program, they decided to move forward with consolidation. Kodak was willing to try unique configurations and do things that maybe other companies were not comfortable doing."
Today, BCD operates a single call center in Pittsburgh to handle Kodak's U.S. and Canada travel, and one in Mechelen, Belgium, for 11 countries in Kodak's Europe/Middle East/Africa region. Kodak also uses online booking tools from two providers for many locations.
[PULL_1]"Through the use of the [Mechelen] center and online booking tool, Kodak [in the first year] saw the average ticket price decrease by $33 and agency costs fall by 27 percent," according to BCD Travel information. "In addition, transaction fees declined sharply in previously expensive markets, with obsolete processes being completely eliminated."
In China, Kodak's "hub of activity" in the Asia region, the company's six major locations are serviced from a center in Shanghai. With the help of BCD, Kodak is deploying a homegrown online booking tool in China, a difficult task for many multinational companies given rules requiring use of the government-run global distribution system. Kodak used data from other parts of the world to depict for management in the Asia region the financial benefits of online booking. "It made them pay attention to the point where they were ready to mandate to travelers in China that they must use the online booking tool that was being offered to them," Lasky said.
Though Kodak would prefer to use the same online booking tool at all global locations, "There is not one tool that we are aware of that covers all the bases for every part of the world," Lasky said. "Maybe someday that's where we'll be."
Close-Up Of Global Leverage, Local Agility
Kodak uses a single global corporate card provider. Airline, hotel and car rental deals also generally are global in scope, augmented where necessary with regional or local deals. "It is a good time to leverage what you have, but global doesn't fit everything," Lasky said. "Sometimes you need the speed and agility that comes along with being at the local level as well."
For airlines,"our strategy is to utilize one major carrier and, as a byproduct of that, use the alliance" in which that major carrier participates, Lasky explained. "Within the deal with the airline, a lot of the discounts are extended through the alliance."
On the hotel side, "we probably have a little more of a regional or local element," Lasky said. "There are certain cities where the best hotels for us to use are not necessarily part of any regional or global chain, so it warrants local relationships." To further optimize the preferred hotel program, Kodak will "try to be more selective" as to which properties to include as preferreds."We are focused on making sure we use our leverage but don't overdo it and have a gigantic preferred hotel program that is too big for our needs."
Meanwhile, some of the basic policies governing Kodak's travel program are applied globally, including how to book (through BCD Travel or via a designated online booking tool, with preferred airlines, hotels, car rental options) and how to pay (only with the authorized corporate card), but there are regional and local flavors for other aspects. For example, advance purchases for airline tickets generally are encouraged but vary depending on region.
Policies also are dictated by economic conditions. For example, Kodak does not have pretrip approval requirements "cast in concrete," Lasky said, but they are used in certain situations. Right now, "inter- national travel has to be approved at a higher level than what it may have been under other circumstances. We don't have that in the policy. We handle it with employee communication running in parallel to the policy, because we change it frequently."
Lasky said travelers currently "cannot fly business class any time," anywhere in the world. He also noted the challenges that come with M&A: "Kodak acquired four or five companies in the commercial printing business over the last four years. The cultures in those companies were just night and day, but it is extremely important to engage the various viewpoints."
Due to cultural variations-as well as language barriers and other obstacles- Kodak has not attempted to integrate travel operations in certain countries. For example, "the Mechelen call center does not have the capability of handling every single language in Europe," Lasky said.
He highlighted another pitfall related to a contract with a national airline. "When we told that airline that we were doing our ticketing out of a different country from [the Mechelen] call center, they said our deal no longer applies because 'the deal says you need to do ticketing in the country where we struck the deal.' " Though Kodak, with BCD's help, negotiated a resolution, "it was something we never even thought of prior to doing the consolidation in Europe."
Meanwhile, Kodak has not attempted to globalize its expense reporting program. Lasky cited the investment and IT resources required for such an undertaking, saying that "it would be nice, but it's not realistic in the immediate future."
Capturing Global Data
Key to the consolidated travel program is BCD's ability to quickly collect and disseminate worldwide monthly travel data, something it pledges to do by the 25th day of the next month. That data is augmented by credit card reports.
Kodak's CFO and other top finance executives monitor overall travel activity "to make sure there is no creep in spending," Lasky said. "Responding quickly to management requests for information gives good credibility to the travel management function." Since the CFO "is always interested in what we are doing lately to get the biggest bang for our travel buck," he added, Kodak on a "periodic basis also provides the CFO with a snapshot of how many unused tickets we have, what the value is, how many we have been able to reuse and what the opportunities are."
BCD helps Kodak track and apply unused tickets, while Kodak also works "hard at trying to do name changes" with airlines that permit them. "Right now, all international travel has to be approved by the CFO," Lasky explained. "If there is a request for somebody to go to China, the CFO in many cases will direct the individual to the travel department and say, 'I am pretty sure there is a bank of unused tickets that you may be able to apply to this trip that I am about to approve.'"