Rapidly growing Salesforce.com in the past year centralized multiple travel policies, processes and agencies into a single global program for travel, card and expense management of its $40+ million in annual travel and entertainment spend. Meetings management is also a key focus, as the number of its meetings and events spend continue to grow.
As with other high-profile entrepreneurial start-ups, Salesforce.com has enjoyed explosive growth in sales, head count and travel and meeting expenditures. Not unusual for rapidly growing companies, Salesforce didn't have a standard approach to travel, meetings or expense management and was ready for opportunistic change. In December 2008, the company hired travel procurement veteran Ralph Colunga to establish management of those programs by using the approach of "simplifying and standardizing the global processes." Colunga reports to global procurement, travel and disbursements vice president Greg Tennyson, formerly of Oracle, where Colunga also worked.
"The way we approached this issue and aligned with our management was to focus on a travel source-to-settle perspective, creating a closed-loop system to address all rogue spend across the enterprise," global travel and expense director Colunga said at the Institute for Supply Management-National Business Travel Association Summit on Travel and Meetings in January.
"Centralization is important to ensure that travel, meetings and expense management strategies align with the overall corporate goals today, as well as to lay a good solid foundation [in order to] simplify, standardize and automate practices so we can realize greater economies of scale and drive effective change. [PROFILE_1]
"It's been my experience that decentralized programs can lead to organizational misalignment of strategies and services, thus negatively impacting the management of travel, meetings and expense," Colunga continued. "I'm a big advocate for centralization."
The strategy was to "establish managed travel and expense programs providing the right services and assistance to our employees on a global basis, while optimizing automation and standardized transactional processing, optimizing demand management, improving duty of care, while driving economies of scale with travel suppliers and increasing transparency and policy compliance in line with our global travel and expense policies," he said.
In what Colunga defined as the "discovery phase," the team looked at all current policies and processes in each area of travel, meetings, card and expense. "When we layered them over one another, determined the synergies, but more importantly focused on nonalignment, we found there were a lot of different approaches to problems" in various business units or geographies, and had to determine if those processes needed to be different.
As Colunga and his team analyzed existing processes, they questioned why each was established the way it was, whether variances were due to legal requirements, technological or other restrictions. "Typically, we find that it's just a matter of 'we've always done it this way,' " he said.
Salesforce had at least five or six travel management companies--"I would argue close to 30" different travel agency/service providers were being used," Colunga said.
"In less than one year, we've moved to a single global travel policy, implemented a single global agency in 24 countries, one online booking tool used in 18 countries, integrated with one expense application now utilized in the 24 countries, global data and reporting and a global corporate card program." BCD Travel, Concur Travel and Expense, and American Express Commercial Cards are Salesforce.com's partners in the effort.
"We've moved very quickly and have been able to do so because of our past experience and lessons learned," he said. "During our 'recovery phase,' we aligned the right personnel into the right roles, established management support of our global strategy and aligned with key global suppliers to meet our business needs. I've hired some talented subject matter experts, who have been able to drive and effect this change very quickly." Colunga's team includes Dorian Stonie and Deb Matarazzo, both formerly with Hewlett-Packard for many years.
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Salesforce.com in 2009 processed 47,000 expense reports, almost doubling the amount from a year earlier. Both the number and dollar volume of expense reports are expected to grow even more this year, Colunga said. The company hired about 1,000 people last year and is expected to add a similar amount in 2010. To manage such rapid growth, Colunga said, it was crucial to combine the expense reporting and travel teams, streamline and simplify processes, and learn and create new ways to communicate to a younger, technology-savvy employee base. The average age of employees at the company is 27, Colunga said.
With so many new hires, a major focus is "to get those individuals trained right from the beginning" on travel policy, corporate card usage, online booking, preferred suppliers, etc.
"I keep thinking about the 1,000 new hires last year and the potential explosive growth this year. With those kinds of increments, pretty soon the new employees will outpace" the total number of longer-term employees, who also must be acclimated to the constant changes.
"Ninety percent of our travel is for sales or sales support services. We're changing and evolving very quickly, adding on average 3,000 to 4,000 new customers per quarter," he said. Given the nature of its travel, Colunga said, "we're not at a stage where we can effectively use alternative interaction systems, such as videoconferencing right now. In our customer service environment, that just doesn't seem to work for our teams at this stage. We're selling and servicing 72,500 global customers and, as a result, our travel is growing."
The company is focused on "getting our operational costs in line and looking for other ways we can provide cost savings or avoidance while enhancing the traveler experience," he added. "We implemented a travel awareness program versus a travel approval process. It's up to managers to approve travel requests in advance of any booking and validate the rationale for employee travel, and then we rely on the TMC to ensure that the manager receives a copy of the traveler's itinerary as a cross check."
For effective management communication, the company developed a tool called the Manager's Edge, centered around little snippets of information rather than lengthy stories. "We’ve tried to go the route of large emails, but found they weren't effective," Colunga said. Instead, Salesforce uses brief, one-line headers with links to the complete message and video clips and vignettes on its portal.
Colunga developed a quarterly communication specifically for administrative assistants, who are the company conduits, he said. Admins typically will be the first to hear about issues, complaints, etc., he explained. "I want them to notify us so we can respond rapidly and hopefully have them 'talk our talk' to educate employees of our strategy."
Colunga and his team also "spent months talking to the different senior and executive vice presidents at Salesforce to explain what we're doing, why we're doing it and why we need [their] support. This initiative was driven in partnership with our CFO. You need that support from the top. We've been able to drive this pretty effectively from top-down messaging, but absolutely trying to be inclusive across all our lines of business."
Colunga concluded by saying: "We're growing very, very rapidly, but the focus on cost savings and value is paramount in this current economic environment." Consequently, "it's really important for all travel and expense managers to seize this opportunity at this stage" to expand travel and expense programs to mirror your corporate strategy.