ACTE XI Honors Chevron's Godfrey

<B> ACTE XI Honors Chevron's Godfrey</B>

<H3><CENTER>Reporter's Notebook: Top Buyers, Supplier Reps Pursue Capital Ideas</CENTER></H3>

<I>Washington</I> - The Association of Corporate Travel Executives last month honored Nancy Godfrey with its top award for travel managers, the Business Professionalism award. In naming Godfrey, ACTE president Earl Foster cited her net fare and smart card initiatives and her efforts to reengineer the travel process.

As manager of travel administration for Chevron Corp., her five-year travel technology vision is coming into focus. This month, Chevron began widespread deployment of the online booking system that Godfrey selected in late 1997 following an extremely comprehensive request for proposals and tests of the top three systems.

Despite a delay in deploying the system to Chevron's 14,000 U.S. employees, Godfrey is optimistic that half of the company's $60 million U.S. air spend will be booked through the Internet Travel Network system by year-end.

"I don't see an online system as just a tool," Godfrey said. "It will be the primary way to purchase travel within a year or so," as telephonic use diminishes. "Chevron's corporate vision through the year 2001 is to migrate a lot of our business to electronic processes and to work directly with suppliers."

In travel, that means online booking, automated expense reporting, prepopulation of expense reports with charge data and some kind of global management information system.

Chevron's travel reengineering took root in 1996, with a one-year study of the travel purchasing process by an interdepartmental Quality Improvement Process team (<I>BTN,</I> May 5, 1997). Among the recommendations were use of smart card technology and online booking. Godfrey said she opted to delay the online booking rollout rather than risk turning off users with an annoying bug that plagued her company's Internet browser. "The system is up and functioning now," she said.

More than 700 employees are using the ITN system, with the counts gradually increasing during the past six months. Bookings have gradually increased to more than 150 in March.

In addition to working out the technical kinks, Godfrey also spent much of 1998 pushing vendors for direct connections. "We've all read and heard that this is the direction vendors are going," she said. "I've been working on direct connections with various vendors for one year."

Difficult technical and political issues must be overcome to make direct connections a reality. Still, Godfrey expects car rental direct connections to become a reality first, followed by air and hotel, and she's hoping the first connections emerge by year-end.

Part of Chevron's long-term vision also includes net fares, where Godfrey has been much more successful. More than 78 percent of the company's air volume now is on a net basis, helping it cut costs.

Next up for Godfrey is working with Chevron services and logistics managers around the globe to share some of the travel vision--especially net fares, bilateral agreements and online travel technology. She expects to hold several meetings using Microsoft's Net Meetings software. Globally, Chevron's air spend is $120 million.

More than 200 Chevron travelers carry a smart card. However, for now, these travelers only can use the cards at Continental Airlines kiosks. American Airlines and Hilton Hotels ended smart card pilots with American Express, opting to retool internal systems before restarting their programs. Early next year, Godfrey expects to go out for bid for a new corporate card with the smart-card vision still in mind.

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Delta executive vice president and chief marketing officer Fred Reid kicked off ACTE XI by touting the benefits of deregulation, "clearly a watershed for our industry" that has led to "a 36 percent drop in airfares in this decade alone." Other benefits, he said, are strategic alliances as well as the consolidation of domestic hub and spoke carriers that has led to the expansion of regional jet fleets, which "could reach over 1,000 aircraft in three years." Reid said to expect deregulation to go global.

Regarding passengers, Reid said a quarter of a million people flew two decades ago and last year that number was nearly 615 million.

Reid admitted that "airlines need to be much better at telling passengers about delays" but said the problem is caused by three factors: air traffic control, airports and aircraft capacity. "Over two-thirds of all airline delays are simply by air traffic control and weather. What remains is aircraft capacity, the only factor we directly control."

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A BTN straw poll of 33 senior corporate travel buyers at ACTE XI showed that nearly two-thirds have just launched or are about to roll out travel pages on their corporate intranet sites.

Of 33 respondents, 23 said they did have a travel site on their corporate intranet and 10 said they did not. Of those who did not, half a dozen said they would in the next six months, and one in the next 12 months.

Of the 23 with travel pages, nine put them in place in the past six months and four more did so in the past 12 months. Fifteen regularly update the travel page on their intranet, two do it monthly and two do it every two or three months.

Adding the 13 travel intranet sites in the past year to the seven in the next shows that 20 out of 33 companies have recently begun focusing their resources on developing this new tool.

One of the most profound benefits a Web site can offer is the improved availability and ease in updating and distributing travel policy as an interactive rather than a static document. More than half of those with travel pages expect to be updating their travel policies more frequently. Ten said the intranet site would not affect policy revisions.

A travel management company has a significant presence on eight Web sites. Eleven said the agency did not have a significant role on their travel pages.

Six companies already have extranet links in place. Only four are not interested in such links.

In a session on how to price and finance travel technology, cochair of the event Jonathan Stobart of The Seagram Co. Ltd. in London and Richard Wooten of A.H. Belo, Dallas, advised corporations to consider all the elements of their travel programs. "The whole is greater than the sum of the parts," said Stobart, listing savings from a card program, travel agency, travel policy, card data, agency data, other vendor data, expense reporting and corporate travel management staff.

Offering sample business cases for the return on investment on automated booking and expense reporting systems, Wooten said a booking system can save $1.3 million to $2 million in reduced agency expenses, preferred vendor agreements and increased use of alternative airfares, while costing an average of $250,000 plus implementation, marketing and training. Expense reporting, he said, could save a company from $700,000 to $1.1 million, while costing $400,000. Over five years, a large company could save more than $10 million by deploying such technologies.

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Highlighting the need for "rich data," Disney director of travel operations and administration Kathy Samuel and Washington, D.C.-based Caldwell Associates consultant presented a new survey of nine airlines' preferred data sources and structure (see chart).