Thurs August 6, at 1:00 PM ETSponsored by: Cvent
Thurs, July 23 at 11am ET / 8am PTSponsored By: American Express Global Business Travel
Thurs, July 16 at 1:00 PM ET / 10 AM PTSponsored by: TripActions
Virtual Event - September 9-10, 2020
Convene: 225 Liberty Street - October 22-23, 2020
ExCeL London - 24-25 February 2021
Filter in or out as many as 200 cities, as well as hotel and car rental class and meals of the day and watch as the per-diem calculator automatically adjusts per diems to your program. Drill down into cost breakdowns and export the results.
After using three card programs for travel and procurement functions, furnished by three different vendors and administered by three departments, the University of Southern California last year consolidated with one supplier and combined program management into a single department. By 2006, USC realized various administrator advantages, an improved cardholder experience and huge rebates.
"With so many programs, it was confusing not only for the administrators, but also the users out there," said Daniel-Thomas Palm, USC manager of travel management and corporate card services, speaking here last month during a Society for Collegiate Travel Management conference. "We found our customers overlapping in every area."
Starting in 2004, USC reorganized disbursement control, purchasing services and travel management under unified leadership in the travel management and corporate card services department (within business services, itself within USC's Business and Financial Services department). "That allowed us to utilize a lot of synergies between the departments, and we started looking at where card programs belong," Palm said.
By October of that year, USC solicited bids for a consolidated card program. It sought automation for program administrators, travel emergency services, automated ghost card reconciliation, audit reports, parameters around the card cycle and a competitive rebate.
From seven bidders, USC awarded GE Capital a contract for all three card products on the MasterCard platform. The travel card covers event planning while the p-card has a limit of $4,500 for a single transaction (to provide a cushion below $5,000, above which a bid process is required). "They happened to have the components we were looking for," Palm said of GE Capital.
USC users now have a single log-on for a single system. The university added an informational Web site covering travel and p-cards, including applications, user manuals, access to account charges and other functions. It also established a Web-based p-card training program--set to launch this month--to replace mandatory in-person training.
"It has been a very interesting experience for us to now cross-sell," Palm explained. "Some of those who had a p-card were unaware of the travel card, and vice versa. In the last few years, we added 300 people to our cardholder list (now over 1,000) and our transactions have gone up quite a bit."
And USC's card rebate also has risen dramatically, "but part of that was offset by the fact that we are an administrative department, not a revenue center," Palm said. "Unfortunately, we cannot use the rebate to offset the cost of salaries and things like that. What we did that was quite unique was to negotiate with our bank so that all the card-related fees (design customization, user conference fees, etc.) were deducted from the rebate. That has been quite powerful for us because we are saving in the end."
USC's p-card rebate in fiscal year 2003 was just under $13,000 while the travel card rebate was just under $26,000, for a total near $38,000. By fiscal year 2006, the estimated p-card rebate swelled to nearly $490,000. A slightly lower travel card rebate of $23,000 brought the total to $512,000, net of all fee deductions. USC spends roughly $900 million a year on procurement through the business services department, with about $24 million counted as p-card purchases. The annual T&E spend is roughly $34 million, including just over $8 million through the travel card and $6 million through the ghost card.
Palm emphasized that the GE Capital rebate was only one of several criteria used to evaluate bids. "Rebates are negotiable, where things like technology and experience are not," he said. "The bidder either has it, or it doesn't."
Beyond the rebate, USC has realized several other benefits of consolidating, including easier day-to-day management, more time for administrators to focus on "larger" issues, an ability to audit all payment programs (rather than only the p-card program, as was the case previously) and more convenient back-end reporting. "Previously we had to pull data together from so many sources to make sense out of it," Palm said. "Now that we have one bank, we can get data so much more quickly and accurately."
USC also wrote a standard p-card policy last year that requires use of the card for purchases of $500 or less. When asked why the university did not opt for a one-card solution, Palm noted how USC automatically pays p-card purchases while travel expense reimbursement requires approval (travel cards are individual liability).
"We analyzed our user groups and found that those traveling are not necessarily those making procurement decisions," he said. "But we might have considered a one-card solution if we were just starting the process now."
[According to SCTM's latest benchmarking survey of 72 public and private institutions, 92 percent have purchasing card programs but only 36 percent use p-cards for travel. Eight-six percent of respondents have a corporate card program while 57 percent have ghost card programs. SCTM suggested the drop in ghost card usage, from near 70 percent earlier in the decade, "could be due to increased frustration with the reconciliation process."]
Despite the success of the program, USC still faces challenges. For example, not all vendors accept the p-card, and the university's "homegrown and very cumbersome" automated expense reporting system can discourage use of the T&E card, Palm said.
Nevertheless, USC is pushing ahead with yet another card type. The new controlled- value card, which Palm described as a debit card, now is in testing and may become "a great tool for controlling budgets," including grants and possibly even T&E spending limits. The policies and procedures would mimic those of the p-card program.
Travel managers worldwide must take immediate action to ensure their European travelers’ personal data...
Aeromexico is increasing operations by 20 percent, representing about 1,200 additional flights, in...
The U.S. Department of Homeland Security has lifted a ban on New York residents joining and renewing...