Any new enterprise technology system an organization chooses
has deployment and implementation costs, not to mention the time commitments
inherent in doing so. But maintaining manual and paper-based systems also
carries costs, ones that Massachusetts-based Zoll Medical, a maker of
critical-care medical devices and systems, was determined to eradicate when it
came to its expense-reporting process.
Snapshot
Organization: Zoll Medical,
a Massachusetts-based manufacturer of critical-care devices and a subsidiary of
Japanese chemical company Asahi Kasei
Volume: 3,300 employees
worldwide, of whom about 250 are international travelers
Challenge: Move away from
Excel and paper expense management to reduce shipping costs and improve
efficiency of report submission and approval
Approach: Deploy a
commitment-free trial run of Certify's online expense management tools to five
of the international business department's most frequent travelers
Solution: Expand the use of
the tool to more travelers in more locations and integrate it with Oracle
enterprise resource planning system
Zoll, a subsidiary of Japanese chemical company Asahi Kasei,
has about 3,300 employees around the world. As for many companies, travel is "a
big chunk of our cost, second behind payroll," Zoll vice president of
finance Glenn Foster told Travel Procurement.
Travel management company Atlas Travel services 50 percent
to 60 percent of Zoll's global business travel. Employees are encouraged to
book online through Atlas tools, though they can call an agent for more
complicated trips. Airfare is billed centrally through Atlas, and the corporate
finance team sorts out the bill. However, individual departments are
responsible for managing their own profit-and-loss statements, including travel
expenses.
As Zoll rarely issues corporate cards, travelers use their
own cards for all other expenses. Before Zoll's international business
department implemented Certify expense management in 2009, its roughly 250
international business travelers filed expenses in Excel or on paper. Even with
templates, the Excel spreadsheets were prone to errors, especially when
built-in formulas were changed.
Zoll required travelers to submit expenses at least once a
month, but some did so only once every other month or even once a quarter due
to the tedium, according to Foster. Zoll's quick expansion during the past 10
years, he said, pushed enforcement of expense deadlines down the corporate
priority list. "Whenever they submitted it, we were just grateful to have
the data."
Additionally, several months might pass before employees
were reimbursed, "making it a big pain for travelers themselves, as well
as for me when I was trying to close the books and estimate how much travel expense
was out there that had to be accrued because it hadn't yet been submitted or
paid," Foster explained.
Employees based in such countries as Argentina, Japan,
Panama and Singapore—shipped expense reports to the Massachusetts office. If a
traveler didn't attach receipts, managers had to request them and wait for them
for as many as six days.
"The biggest pain point was that a lot of folks wouldn't
submit expense receipts with the report, so that would delay the review
process," Foster said. "It was a very cumbersome, manual process that
took forever, especially if there were questions—and there were always
questions."
Thus, managers often would approve reports without receipts
or explanations and "hope" the receipts would support their approvals
once they arrived, Foster explained. To make matters worse, managers wouldn't
always follow up to obtain the receipts or review them once they'd arrived,
Foster added. "I'm sure we had expenses go through that shouldn't have."
Plus, roughly 40 people shipping 480 packages a year was
expensive. Each overnight FedEx shipment from Asia costs $30 to $35, according
to Foster.
No Strings Attached
During a 2009 meeting when Certify pitched its system to
Zoll's corporate finance team, Foster became intrigued by the lack of required
commitment and upfront cost and by the short implementation time.
"The corporate team said, ‘I don't know, we have to
think about it and do an analysis,' " Foster said. "I liked the fact
that I could walk away at any time and I didn't have to invest $15,000 to
implement the system.
"I got it rolled out to my five guinea pigs around the
planet within a week," he continued. "One of my users who was used to
not getting reimbursed for months sent in his first expense report and had his
money within 18 hours."
With the new system, Foster quickly could identify travelers
who hadn't submitted expenses or were missing receipts, and employees could
include explanations within the expense report. Approving managers also could
request explanations and halt the review process until they received receipts,
Foster said. "We are able to enforce policies better because we have the
information when we need it versus, ‘I'll get the information later and hope
that I go back and review it.' "
In the first year after implementing Certify's system, Zoll
saved between $8,000 and $10,000 in shipping costs, and that was just for a
handful of employees. Zoll thereafter rolled out Certify to the rest of its
international travel department, and the North American team adopted it about a
year and a half ago.
The larger adoption prompted Zoll to build an interface
between Certify and its Oracle enterprise resource planning system. That
integration eliminated manual data entry and thus created cost savings even as
the company expanded. "Instead of just adding people to manually manage
the expense-processing part of it, the same team now was able to handle much
more volume more efficiently and accurately too," Foster said.
As a traveler himself, he used to spend as many as four
hours on a Sunday night filing expenses. Now, he photographs his receipts at
the end of each day, and the tool prepares reports on his scheduled cycle. When
it's time to submit, he reviews the report and makes minor corrections if
needed.
Globalizing Success
Zoll will roll out the new system to its foreign
subsidiaries in more languages, including French and German, with plans to add
Chinese and Japanese.
Determining per-diem rates and processing taxes in local
countries through Certify still is challenging for Zoll, particularly in Japan
and Germany. But Foster hopes to find a solution this year.
"It's very complex in both of those countries, and we
can't have the standard $50 per-day rate I have in the system," he
explained. "It really matters where you go and what you do. … It's a
massive matrix to try to implement."
The firm also is expanding Atlas Travel to subsidiaries
around the world, which will enhance spend visibility and the ability to
negotiate with suppliers. The travel management company in April 2014 opened a
London office, which helps Zoll with its European travel. Servicing
non-English-speaking employees remains challenging, Foster said, but Zoll is
working with the TMC to bring Italian- and French-speaking agents to London and
is inquiring about service to the Asia region.
Getting corporate cards into more Zoll Medical travelers'
hands is not on the horizon, however. "We're just a frugal New England
company that doesn't want to have the excesses that come along with corporate
cards. That's just New England Yankee frugality," Foster joked.
This report originally appeared in the May 2015 issue of Travel Procurement.