On the leading edge of corporate travel management for most of the past decade centralizing, globalizing and optimizing its $300 million travel program, Cisco Systems is now going where few peers have gone before: halving travel spending and pushing travel alternatives, while continuing to grow revenues.
While the economic meltdown prompted Cisco to slash travel budgets by more than 50 percent in the March quarter, the reduction will be permanent, Cisco CEO John Chambers said in financial calls with analysts. It is part of a new business model for travel management developed and vetted during the past 18 months, according to Susan Lichtenstein, director of finance responsible for global travel and corporate internal meetings and events.
"When I arrived at Cisco 19 months ago, there was a strong global program in place, but there were many opportunities to save money," Lichtenstein told Procurement.travel.
Although she had spent more than 25 years in executive management roles in travel and meetings management with travel agencies, meeting technology providers and a meetings management company, Lichtenstein hadn't previously managed a direct corporate travel and meetings management program. When the opportunity arose, Lichtenstein applied for and received the job, relocated across the country from her native New York and hasn't looked back.
[PROFILE_1]On arrival in San Jose, Lichtenstein said she "took a couple weeks to look at what the current state of the program was and asked, "where can we tighten up the program? I didn't just want to build a great program; I wanted to build an industry-recognized program."
During the past decade, Cisco consolidated from more than 60 travel agencies to just one travel management company and established a global partnership with American Express. More than 95 percent of its bookings are on one global distribution system (Sabre). It expanded use of its online booking tool (GetThere) from just one country to more than 65. However, it never integrated or enforced travel policy or use of preferred vendors. Instead, it had travel guidelines and a pretrip approval process in which 89 percent of trip requests were approved.
To take the travel program to the next level, Cisco needed to focus on travel policy, compliance, improved collaboration and communication using Web 2.0 technology, and strategic contracting with its partners. To gain senior management buy-in to a travel policy overhaul, Lichtenstein developed a presentation that promised to deliver millions of dollars in savings. "The first thing the CFO is going to want to know is, 'How much are you going to save me, and how are you going to track it to the bottom line?' That was my plan, and I had to prove my methodology could make it a reality."
Savings would come from mandating use of nonrefundable tickets; utilizing Cisco's preferred air, hotel and car partners; managing travel approval by exception; and reducing internal meetings through use of Cisco-powered virtual alternatives. The travel team also expected travel spending reductions once managers gained visibility to global travel reporting data through dashboards and from behavior changes driven by the deployment of blogs, forums and wikis. The plan became a presentation.
"Fifty-two versions later, my presentation moved from the senior vice president to the CFO. Three versions later, we went to the CEO," Lichtenstein said at an Association of Corporate Travel Executives meeting in April. To ensure buy-in, the Cisco travel team enlisted the support of operations and sales through an advisory board and shared a roadmap for travel transformation that included travel metric forecasting, an employee communications plan and the management reporting dashboard with a broader cross section of Cisco senior leaders.
"The key to securing user approval was to focus on transforming the customer experience," Lichtenstein said. So the travel team looked to such social networking tools as blogs, forums, wikis and the use of Cisco's webconferencing technology, Webex (acquired in mid-2007), and its high-definition videoconferencing tool, TelePresence. The final approval for travel policy changes needed to come from the senior executives. "Senior leadership sponsorship was critical to the adoption of the travel program. We would not have been able to accomplish the success that we have experienced without their support."
Developing The Plan
The team began brainstorming ways to transform all aspects of travel: booking, pretrip authorization, supplier messaging, policy communications, links to other tools, functionality and reporting by business unit and country. Included in the planning was a directive from John Chambers to reduce carbon emissions from travel by 20 percent.
"We asked our reporting staff to create a council, which met monthly with key stakeholders for a year to create user-friendly, on-demand online reporting that made sense," Lichtenstein said. "We brought in our business intelligence group, marketing, and the communications team--we created a village to help us move this Mack truck." Now, managers have the power to generate the travel reporting they need at their fingertips, versus requesting reports from the travel team.
Reporting dashboards detail reasons for trips, advance booking trends and savings by business segment, and allow managers to drill down to see such results.
The project team also looked for ways to "integrate Web 2.0 functionality within the travel program," Lichtenstein said. They needed to use technology to reduce the volume of emails received from travelers, devise new ways to obtain traveler feedback instead of "complicated manual surveys" and deliver the travel Web site and policy in real-time instead of the "static Web content that was always out of date.
"We also needed to communicate one-on-one with our travelers" in more than 100 countries, she added. "Enabling travelers to talk to one another--that was key."
Blogs, Forums, Wikis, Oh My!
Working with information technology, communications and other departments within Cisco, Lichtenstein said, travel "changed our Web presence to make it more interactive and created a forum to find out what our travelers were thinking." The travel team used blogs, forums and wikis to open the communication channels with its 66,000 travelers.
The new travel policy, booking tool enhancements, reporting, blogs, forums and wikis debuted on April 2, 2008. The team also added online training via on-demand videos and presentations that detailed the booking tool, meeting technology and airline programs.
"One year and 51,000 hits later, we are the highest-viewed forum at Cisco," Lichtenstein said. "You know why? Travel is personal. What's great about social networking is I get to hear how we're doing from our travelers every day, one-on-one. Successful social networking requires monitoring, daily." For that, Lichtenstein relies on her seven-person team of travel professionals located around the globe. Each member of the team spends a half hour each day responding to questions. An added bonus, Lichtenstein said, is that she gets to see quickly how the team is doing with collaboration and communication.
The Cisco travel blog usually features three topics: a company message, an exciting topic designed to stimulate conversation and news of enhancements to the program or technology. There is a forum to address user questions regarding policy or tools and an open wiki that allows anyone to add content about a destination or travel tips. The travel team also operates a private, password-protected wiki that serves as its own communication tool.
[PULL_2]Cisco travelers are free to post questions, comments or criticisms of the travel program, policies or service levels, provided all is within "Cisco's general rules of conduct," Lichtenstein said. "I always start every response with 'Thanks for reaching out. ...'
"Less than 1 percent of the feedback is negative," she added. Mostly, travelers "want to learn more or might not understand" program aspects. Comments about the new global travel policy easily ranks as the top discussion area. The travel policy hadn't changed in 10 years and went from fully flexible fares to nonrefundable, "so we expected to hear some feedback," she explained.
Now, everybody has a say in travel policy and management, Lichtenstein noted. "When they see their forum questions being answered, they buy into the policy. We have a 79 percent adoption of our policy. We have a 75 percent online booking adoption globally--in a program that includes countries where adoption is typically low, like Russia, China and Qatar. That's, amazing, all because we talk to one another."
Cisco travel and meetings in April 2008 also integrated the company's own technologies--WebEx and Cisco TelePresence--within the GetThere online booking tool to offer travel alternatives to those who requested travel for internal meetings or training.
When the economy hit the brakes last fall, Lichtenstein said, senior management asked employees not to travel for internal meetings, if possible. "In four short weeks," the travel team revised the booking tool to address employees who indicated internal travel or meetings as the purpose of a trip and redirected them to virtual tools.
Cisco recognized that achievement by presenting the travel team with a Transformational Leadership Award. ACTE also honored Lichtenstein with its Advancing the Industry award for the deployment of social networking tools to enhance the relationship between travelers, travel management and suppliers.
"Integrating the policy within the tool, we're leading travelers down the right path," noted Teri Oachs, Cisco communications manager.
Since November, Cisco has eliminated "93 percent of internal travel and 91 percent of training travel," Lichtenstein said at ACTE. "We created a program and policy that we can use in any economy; we will not go back to the way it was."
As part of the new travel program, Cisco met with hotel partners and suggested the creation of a preferred partners program with three-year agreements. "Negotiating every year is painful," she said. "We invited them to understand our strategy" and business objectives. "We're now doing the same thing with airline and airline alliance partners."
Working together, the preferred strategic partners created key performance metrics and service agreements. Cisco brought suppliers together and held "monthly reviews per theater with each one of our preferred partners. They're not love fests, they're drill downs. We want them to be strategic partners. They were invited into our strategy--how to be faster, stronger, better. We value their opinions. We have an environment of trust." In each review, Cisco focused on five issues, Lichtenstein said. When those issues were resolved, they added five new issues. "Everybody should be involved in transforming the experience.
"Together we're all growing and becoming better companies," Lichtenstein added of the strategic partnerships. "In the first year, supplier performance ratings consistently improved. And, when Cisco's travel strategy changed, the partners were all informed."
Furthering both the supplier partnerships and its use of social media, Cisco soon plans to feature a "preferred partner of the month" section on its online travel community, allowing travelers to directly interact with suppliers.
Cisco also plans to introduce live chat functionality within the online booking tool to help travelers through booking questions and complete online transactions. The travel and meetings teams have set aside forum areas to promote special initiatives, such as environmental projects.
Build It, They Will Come
Critics warned that travelers wouldn't come to the forums and wikis, but, Lichtenstein said, "They won't stop coming." Travelers often answer each other's questions, and Cisco encourages them to talk to each other. Whenever the travel team notices that a hot topic has more than 50 views, it makes the topic a frequently asked question, she added.
Measuring return on investment in productivity time from the new model, Lichtenstein said, "we think we're saving 63 percent of the time that we used to spend responding" to emails, voicemails and phone calls.
"If I can build this--a Baby Boomer who didn't know anything about a wiki before we started--anybody can build it," Lichtenstein said. The goal, she added, has been to follow the Cisco vision: "We want to be the best in the world, best for the world."