As part of a major corporate initiative to "safeguard profitability," Siemens AG last year centralized all purchasing--including travel and other mobility services--under a corporate supply chain management organization that reports directly to the managing board in Munich.
Heading supply chain management is Barbara Kux, who also serves as chief sustainability officer and a Siemens AG managing board member--the first woman on the board in the company's 160-year history.
"We have the highest possible level of mandate in fulfilling the mission of the organization," Siemens North America mobility services director Steven Schoen said while speaking during a session at the Association of Corporate Travel Executives meeting in May.
"We have 100 percent coverage now under one umbrella globally, nationally and regionally. This is a global structure and a regional structure. I report on a functional level to the head of mobility services globally and report locally to the head of indirect materials in the United States," he added.
[PROFILE_1]"Global strategy and alignment is probably the most exciting thing we've been doing. When I joined more than four years ago, there was a program in North America and in other key locations. Now, we're leveraging globally. It doesn't mean we're doing the same thing in every country. We're not. But we're [trying] to ensure that if the United States is doing something different from China or other regions, it's all part of a global strategy. We work to see how we can fit the regional and local needs into the global program," Schoen said.
Until December 2009, Siemens mobility services reported to a North American shared services organization. Siemens now has category experts within indirect materials for professional services, information technology and telecommunications, logistics, development and projects, industrial suppliers and mobility services.
Mobility services is responsible for the company's travel policy development, strategic sourcing, supply chain contracts and relationships, internal data, marketing communications on the benefits of travel services and all reporting, which includes spend, behavioral and savings, Schoen said.
A separate organization supports Siemens businesses in Canada, but "our Canadian colleagues outsourced mobility services to the United States," Schoen said. "The interesting thing about this setup is that we manage that travel spend in North America with 4.5 people. We have a travel base of 65,000 people."
While mobility services is part of the supply chain organization, it's up to executives in each business unit to bring the team into their organizations, devise service delivery requirements and then deliver and implement travel programs, Schoen said. "We measure their performance and tell them how to improve."
Mobility services devises, compiles and distributes the key travel performance indicators reviewed in quarterly CFO meetings. "They see where their unit performs against others" in key travel metrics, such as use of the credit card, travel agencies, standard policies, procurement tools, online booking and savings goals. "Nobody likes to see non-results in travel goals," Schoen said.
The Travel Program And Philosophy
Siemens has four global travel agencies, mandates use of a single corporate card for payment of all travel expenses and promotes usage of procurement tools that identify preferred suppliers.
In North America and Canada, Siemens last year began deploying Rearden Commerce's Personal Assistant online booking tool, replacing e-Travel from Amadeus. Online booking adoption has increased over the years to more than 70 percent in North America as of 2008. Siemens last year used Sabre as its global distribution system.
As part of its new supply chain management strategy for travel, Siemens soon will "have one hotel commodity manager to manage the space for transient and for meetings and events," Schoen said. Historically, many companies have managed transient and meetings hotel spending as separate categories.
The vision for Siemens' travel program, Schoen said is "to achieve best-in-class results. We're going to do that through innovation, automation, standardization, transparency and integration with corporate processes and systems.
"We leverage globally, structure regionally and manage locally," he added. "We do not have one single global [TMC] provider around the world. We talked about it, looked at it and decided we can't. That doesn't mean we can't put our program together globally and make sure that the pieces that participate in this program are part of an organized process."
[PULL_1]Schoen and team don't tell regions to use a particular travel management company, but instead advise them to pick one from a list of preferred TMCs. They use the same approach for online booking tools. " 'Evaluate your local needs,' " he tells colleagues. " 'See how it fits in with what's going on in your region and pick the one that works best for you.' That has worked best in our environment."
Of the need to balance local and global needs, Schoen said: "When dealing with 190 different countries, we're dealing with a lot of different customs, rules and worker situations, so one size does not fit all."
Siemens has a single travel policy, but multiple interpretations. Instead of 190 versions, Schoen said, "we are happy that we have one policy with just 48 versions now. We're not talking 48 different policies, we're talking about how someone applies business class" or interprets other policy provisions. "Some allow business class; others allow it after so many hours. With others, it's a matter of who you are, not where you're going, when or for how long. We accommodate all of this," Schoen said of the technology, reporting and fulfillment structure that mobility services delivers.
"One of our goals is to take all those different versions and have the variances become less each year," he said.
Objectives
Siemens mobility services includes both program and operational management. The latter "brings together the TMC and fulfillment, online booking tool, GDS and other data sourcing, and works on system integrations and configurations," Schoen said. With each company acquisition, divestiture or organization change, this team must ensure that data migrations, such as traveler profiles and reporting structure, have occurred. Operational management also is charged with ensuring that "information is readily available" for a traveler to make the right booking decision.
"If at any time the program doesn't work, we are interfering with the opportunity to increase the profitability of our company," Schoen said of travel. "No pressure, no pressure at all. If the program doesn't work every hour of every day, it doesn't matter how effective sourcing strategies, technology or other aspects of the program are. We are expected to be perfect: Our mission is to facilitate the business and profitability of Siemens through the provision of safe, productive and cost-effective travel-related services that are in compliance with corporate and regulatory policies and guidelines.
"We have to strike a balance," Schoen continued. "We have to provide a program that is compliant not only with our own policies and guidelines" but also with laws and regulations in markets in which Siemens operates. For example, the company operates in the health care industry and must ensure that travel and meeting policies are in line with state and federal regulations, he noted.
The mobility services team also is involved in "supporting company goals" on environmental issues, tracking the carbon footprint of travel and savings from alternatives. The board last year tasked mobility services with marketing and measuring usage of the desktop videoconferencing technology deployed companywide to curtail travel for internal meetings.
Future Goals
Schoen said a new initiative for Siemens mobility services is "streamlining the user experience. We don't want booking or managing travel to be their responsibility," he said of traveler and manager users. "We want them to get into the system, do what whey want to do and get out and rely upon us to configure it properly. We want them to prepare for the business of the trip," not the trip logistics, he said.
While local needs are considered, Schoen said the company is a "stereotypically global matrix organization. In an organization as large and complicated as ours, the bottom-up [approach] takes too long--the market is moving too fast. We need to work from the bottom up and from the top down. In many cases, those are in alignment. When not in alignment, guess who wins? The top down."