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Faced with low adoption of its online corporate travel booking tool and a desire to use technology to improve productivity, ensure policy compliance and help employees make better buying decisions in such broader business services categories as dining, meetings and car services, GlaxoSmithKline asked employees to test run its legacy tools and Rearden Commerce's platform before it selected and deployed the new technology.
An early adopter of several procurement tools that help it source, analyze, code and report its more than $17 billion in annual purchasing, GSK in 2005 examined the Rearden Commerce platform, according to Gregg Brandyberry, GSK vice president of procurement, global systems and operations, speaking last fall during an Institute for Supply Management webinar sponsored by Rearden.
Business services is a large, rapidly growing spend category for GSK, with companywide travel and entertainment volume at $650 million, 14 percent more than 2006, Brandyberry said. The firm's U.S. air volume, he added, was $150 million, with 74 percent growth compared with 2006.
"We were looking for something that would take us into what we referred to as 'employee business services,' " said GSK director of procurement for corporate services Janan Johnson. With a close eye on user productivity, GSK analyzed adoption rates and calendar integration with Rearden Commerce's platformto manage the procurement of such services as conferencing, dining and parking--in addition to travel.
GSK procurement executives in October 2005 invited a cross section of employees in the United States and United Kingdom to test legacy products and Rearden Commerce on three typical-use scenarios: ship a package, book a trip that included flight, hotel, car and dinner, and book a trip excluding dinner.
GSK staff observed testing--performed in a lab environment--to gain better insight on behavior, and also used a Web survey tool, called SelectSurvey, to capture key metrics and feedback. Among the questions that GSK wanted answered were whether "employees would prefer a one-stop shop for services over multiple point solutions," the impact a new tool would have on information technology support and the time it would take for success. On a five-point scale, users ranked Rearden's platform at four or better in terms of ease of use for the shipping, travel and dining categories. They also highly ranked the productivity gains from single profiles, contact lists, automated emails, "calendaring," notifications and shipment tracking.
GSK's phased deployment of Rearden began in the United States and United Kingdom in 2006, and grew to more than 15,000 active users. To measure the success of the deployment, Johnson tracks a number of key performance indicators, such as user activity and satisfaction, online adoption, utilization of preferred suppliers and the "attachment rate of hotels" or percentage of eligible air bookings that include hotel bookings. GSK also tracks visual guilt--or use of the lowest-priced airfare, hotel, restaurant and package shipment. Also tracked is the required information technology support as compared with GSK's prior online booking tool. Online adoption rose to more than 90 percent on GSK's primary domestic air routes in both countries. Moreover, 35 percent of all transactions were "zero touch," and average air ticket and hotel prices declined, Johnson said during the webinar. "We have fewer IT support calls" now, she added.
"There's an overall reduction of spend due to virtual guilt, whether in the area of package ship, car service or actual travel," Johnson said.
Within procurement, officials use the data collected by the tool to "refine vendor management strategy--what suppliers should we be using ... and who's providing us better pricing models," Johnson explained. The team also evaluates the "tremendous amount" of suggestions sent by GSK employees for new business service categories to add to the platform.
As a user, Brandyberry said, "It's not only productivity, but the knowledge that I'm saving money for the company." As a frequent traveler, Brandyberry said the notifications that the system can send via email, cell phone or text message to remind travelers of their flight time, carrier, gate, hotel confirmation and other itinerary details "is a great sense of security for me, as I'm not digging around trying to find itineraries."
Next up for GSK, Johnson said, is a "huge focus on increased levels of touchless adoption, because that does drive our operating expenses." The company also plans to add a few more services, with the next one slated in the "mobile phone arena," she added.
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