Steven Schoen
Siemens Shared Services during the past two years has developed for its North American businesses a comprehensive, data-driven policy compliance reporting system, including metrics on domestic and international online booking adoption, maverick air spend, low-fare acceptance, advance booking and preferred hotel usage. Mobility services director Steven Schoen last week provided an update on the program--detailed last summer in a Procurement.travelcover story--while answering questions from participants in a webinar co-sponsored by the magazine. An excerpt follows.
How do you get key performance indicator reports flowing through from 40 different operating companies, and who inputs this information?
Through the use of many shoehorns. Kidding aside, in my company, eight of the operating companies' spend represents about 85 percent of total Siemens spend in North America. Our initial focus has been on our eight largest operating companies. We have gotten to the point where I would say it is a 90 percent automated process. We created a new travel data warehouse into which we load our card data, our agency data and our human resources hierarchy data. That whole loading process is automated. The normalization of the data ... that's a piece that still has some manual aspects, because the data elements among airlines or hotel companies are not consistent in terms of data fields or in other aspects that enable us to match up for actual reporting. Beyond the normalization, the actual report production is now totally automated. Now we are looking to add more companies beyond these eight. My company happens to be going through a global reorganization from 40 operating companies down to three global sectors. So we will start looking at these KPIs on a sector level. It took many months and many runs of the data to get the automation right. Every month, different aspects of the normalization of the data become more automated than they were the previous months. This type of project is a long journey when you have as much data as we do. We set expectations for our internal customers that the quality of the data and the quality of results in month 10 will be better than in month two, and in month 12 it will be better than it was in month 10. We are far enough along now that it's consistent. We have built the confidence of our key stakeholders in terms of the validity and integrity of the data and the reporting. It becomes a much more effective and usable tool. That has helped us get them out in a timeframe that is meaningful. Delivering 60 or 90 days after is too much lost opportunity in our world. These reports are distributed within 30 days of the close of a month.
If the operating companies are not all on the same human resources system, how are you able to do this?
There are a couple of ways we look at it: We look at the standard fields we need from the HR system, and those that are not on the common platform, we request from them a feed--a simple Excel spreadsheet feed that we then input into the data warehouse. Some are not willing, or not able or not ready to do that yet, so in those cases, we don't always have the hierarchy. We will always have the names but not always the hierarchy. If our customers want that hierarchy, they either need to provide us the information that we put into the data warehouse or ... quite frankly, we're Shared Services--providing a shared HR platform is one of our service lines, so this actually becomes a marketing item for companies that do not participate in a common platform. Participating enables a number of things related to consistency, reporting and process, not just in travel, but in other shared service lines.
What is your standard for advanced booking compliance?
In our KPI reports for advanced booking, it's less than seven days or more than six days. But we have a couple challenges with that: In many of our operating companies, there are service and field technicians who are working under service contracts from Siemens Power Generation. If one customer's turbines go down, and they are on a platinum service contract that requires us to have somebody onsite within four hours, clearly that seven-day advance rule has no meaning or no purpose. So when we look at what is a good benchmark, we really have to examine what comprises the travel for any individual operating company. As a result, it's very hard for us to set a strict standard. Even though we measure less than seven days or more than six days, we track performance in terms of benchmarking average ticket price [at] zero to two days and more than seven days. What we are seeing, all of a sudden, is that in some markets, zero to two days is not as bad as we thought. Three to six days is consistently the worst place to be, but we are seeing--and I guess as a result of yield management--when they are less than three days out, airlines start to lower fares to fill those seats. Airfares in the zero-to-two-day area, in some cases, are maybe not quite as advantageous as more than seven days, but certainly not as harmful as they were two or three years ago.
To what extent do you try to control traveler behavior using mandates versus allowing for the productivity they enjoy on the road through higher classes of service, etc.?
Benchmarking helps. Being part of a company that is many companies, we use the benchmarking tool internally to show how one operating company is performing against the next. When a CFO sits in a room full of his fellow CFOs and these graphs comes up showing their operating company is the worst performer in a key performance indicator category, the ego drives a decision on that CFO's part. He or she wants to know, "Why are we the worst performers?" and "What can we do to turn that around?" Even if it doesn't end up in a "hard mandate" situation, it certainly acts as a catalyst for them to start asking the hard questions that can lead to a change in behavior.
What is your international air class-of-service policy?
Siemens has, in most cases, a pretty standard travel policy across the 40-plus operating companies. One of three areas where there is variation pertains specifically to this topic of who is authorized to fly business class for international. In some of our operating companies, [executives] can do it. Some start with the "hours" rule, if the longest leg starts with six to eight hours or, in some cases, if elapsed travel time is more that eight to 10 hours. So that really varies in our organization by operating company, but those few that are more lenient about that are certainly (with the increasing fares right now) taking a much harder look at that. But to compliment them, I think they are looking at the impact on employee productivity and retaining employees as well, because if we keep taking away you can lose some key performers.