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"It's unbelieveable, but when we started, there was no international coordination of SAP's travel management activities, no uniform negotiation process," Dirk Gerdom, SAP AG global travel manager said during an Association of Corporate Travel Executives conference here last week. For example, there was a redundancy of contracts, with as many as ten negotiated rates at one hotel near London Heathrow Airport. "We could see overall volume, but we couldn't see where it was, which country was involved. We had no controlling and steering capabilities," to direct spending to preferred suppliers.
Four years later, the business software giant has developed the process, technology and transparency for data tracking through dual global credit cards and expense reporting systems; strategic sourcing and vendor management through electronic sourcing and reporting tools; standard business processes through a global policy with regional adjustments; and tools to measure traveler satisfaction.
Compliance to the travel program for 2007 is at 65 percent, Gerdom said. Policy compliance is at 90 percent and the savings in relationship to spending is 10 percent. About 80 percent of SAP's travel volume, which Gerdom did not disclose, is charged to its two preferred corporate cards.
SAP began global consolidation by first identifying problems (including cultural challenges) and best practice solutions. It also looked at travel industry and SAP-specific travel trends, and the impact of the company's recently announced shift from providing only software to providing both software and services. After the global travel team recognized that travel was necessary to help grow the company, the challenge was defining how best to do it.
With nearly 42,000 employees in 120 countries, SAP has travel around the globe. More than half of its global travel volume is generated outside of the Europe/Middle East/Africa region, which includes headquarters in Germany.
Full-time travel coordinators in SAP's top travel regions--North America, Latin America and Europe--and part-time coordinators in the Asia-Pacific region worked with Gerdom to devise the overall strategy. "It's not our way to define the strategy from Germany on a global level and implement it in all countries without asking the regions if it would fit," he explained.
Aiming to better leverage global buying power, SAP negotiated global umbrella contracts with preferred suppliers. Under those arrangements, local contracts are negotiated by each country or regional manager. Global travel management is responsible for all procurement and the negotiation processes, but always works with regional coordinators on vendor selection, Gerdom added.
The global program also includes a uniform booking, planning and reimbursement process, though it is up to each country to decide whether to follow it, Gerdom acknowledged. SAP's own travel booking system is the primary booking tool, but it isn't available globally. "In smaller countries, it's not always effective to have online booking systems because it costs SAP to run those," he said. "We need an ROI for each country."
The program also includes an online request for proposals process for hotels, and next year would incorporate a similar process for meetings and events. "For us, it's important to have online, standard contracts in place" for meetings to eliminate the need for the legal department to review every contract," Gerdom said. The meetings tool that SAP plans to use would include electronic signatures, electronic invoicing and standard contracts.
The cornerstones of SAP's global policy include use of preferred travel agencies and booking channels, a recommendation to book travel 14 days in advance, use of lowest available rates, and fewer offsite internal meetings in favor of virtual conferencing.
While global travel management develops the travel policy and process, and the means to track it all, the company's board makes final determinations on all matters. Country and regional managers implement programs, and cost center managers deal with non-compliance to specific travel policies.
Compliance is tracked from both a company and regional perspective, Gerdom said, but data privacy laws prevent his department from delving any deeper on non-compliance. Reports are designed to identify where his team might need to intensify its marketing efforts to encourage higher compliance, he explained.
"We have monthly and quarterly CFO meetings with our regional and country CFOs," Gerdom continued. "We have a huge number of conference calls and video conferences to convince people that these strategies are the right ones." When he first began at SAP, the company tried a mandated policy, but soon "realized that this was a very big mistake because this was not the culture."
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