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Nearly four years after plotting a global travel management strategy that meshes a multinational framework with local choices, Siemens AGmoved aggressively during its 2006-2007 fiscal year to achieve a mandated 25 percent reduction in its €1.8 billion annual travel spend.
The conglomerate's four-person global travel management team provides "the choice of a few strong suppliers" and decision-making support, but country managers are encouraged to "act locally" as part of the Siemens philosophy, according to vice president of international travel management Sabine Sehrt.
Sehrt told attendees to an Association of Corporate Travel Executives conference here last week that Siemens' six key focus areas are credit card, travel agency, policy, procurement tools, online booking and the 25 percent savings mandate--dubbed "move25."
In addition to preferred air, hotel and car vendors, each country chooses of one of four globally contracted travel management companies and the primary corporate card. Sehrt emphasized the importance of global master agreements, saying she struggled for 12 months to establish such deals with each of the four TMCs. Each country then negotiates with one of the four TMCs a separate contract that details financial terms, management information requirements and a service level agreement. Sehrt said her office provided a sample SLA to each region.
"The goal for this year is to harmonize our transaction fees to only five," as the more than 30 transaction fees in place in some countries today make it difficult to compare data across regions.
Siemens also offers one of two online booking tools, Amadeus e-Travel or i:FAO Cytric, that are privately labeled as Siemens TravelNet. The company uses e-Travel in Canada, France, Italy, Singapore, the United Kingdom, the United States and the Nordic and Baltic countries. It is also pilot-testing e-Travel in Chile, and planning a South Africa rollout. Siemens uses Cytric in the rest of Europe. Adoption ranges from 50 percent to 90 percent, although Sehrt acknowledged that it is far less in such challenging areas as India and Singapore.
Another element of the six-point plan includes use of procurement tools by travel managers to negotiate and distribute preferred air and hotel rates. In countries with fewer than 1,000 Siemens travelers, the company offers a booking tool it calls Siemens TravelNet Multinational. Offered through the corporate intranet site, this tool can book hotel and car rental only and is offered in four languages to all employees around the globe. Using a third-party tool called FareFinder, Siemens has negotiated more than 5,000 fares for origin and destination points. Using another third-party procurement tool called RateFinder, managers have negotiated with more than 3,500 hotels from which Siemens buys more than 100 room nights a year. At hotels with fewer annual room nights, Siemens relies on third-party negotiated rates. Both procurement tools provide a central database of negotiated rates for employees to access through all online booking systems.
More than 240,000 Siemens travelers have an American Express card. But to address concerns about non-acceptance, especially on low-cost carriers, Siemens recently selected the Royal Bank of Scotland MasterCard as a back up for all travelers. About 40,000 employees in Germany carry this card today, but the just-begun global rollout will integrate data into the firm's data warehouse and expense tools. One employee benefit of the back up is that personal travel charges can be billed to this card.
While each country has its own travel policy, it must contain common, global guidelines: mandated use of the corporate card, online booking tool or travel agency and preferred suppliers; use of economy flights or the most cost-effective rate for their domestic flights and trips within a region; and use of the Siemens Hotel Directory to book hotels.
Other tactics designed to achieve the 25 percent savings include travel avoidance through increased use of virtual meetings and education to change traveler behavior so they book in advance, use low-cost carriers and consider whether they really need to take a trip.
As part of the procurement, mobility and logistics group within global shared services, Sehrt reports to global shared services head Denice Kronau, who gave a keynote speech at the ACTE event.
"Now everything is 'Click,' " said Kronau. "Everything we do is electronically enabled--out to HR systems, out to our accounting systems. It's the interfaces that allow us to process millions of transactions in a very cost-efficient way, but more importantly against the rules that we set. One of the biggest challenges for all of us in the room is, we want to treat our customers as customers, absolutely, but we have to educate our customers to want something in a more standardized way because if we let every customers be unique, we can't actually do the right thing for them."
Kronau implored ACTE to develop a standard key performance indicator that would measure travel spend relative to revenue. Siemens uses a KPI that calculates T&E cost compared with business development (new orders and sales divided by two).
"We would love to have a handful, maybe two handfuls of companies to track KPIs," said Kronau.
To help create biannual reports for all company CFOs, Siemens' regions report KPIs in the aforementioned six areas using credit card data, some agency data and other elements.
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