AlliedSignal Tests Travel IS Tool

<I>Tempe, Ariz.</I> - AlliedSignal Business Services this month is beta testing a management information summary tool--one of three interactive products expected to serve as the foundation of the company's booking-through-expense reporting system.

Known as Tempest (a play on the name Tempe, where company headquarters is located), the tool contains all travel agency PNR data, all expense reporting information and information from the corporate charge card. Tempest grabs the requested information from the interlinked databases and presents customized measurement "pulse points" so budget managers can see how travelers are faring against their financial objectives.

The beta test, which will involve between 50 and 75 managers, is expected to last one month, with a full rollout scheduled for mid-July.

That will be followed by the other two components of AlliedSignal's vision for the future: a beta test of the Microsoft-American Express Rome booking system and an upgraded expense reporting program.

Jim Peterson, manager of travel and expense reporting for AlliedSignal Business Services, is using the criteria for the Malcolm Baldrige National Quality Award--for which he serves as a quality assessment manager--to ensure that growth and improvement are ongoing in his operation.

The Baldrige Award, created under President Ronald Reagan in memory of a former Secretary of Commerce, is given each year to U.S. companies that exemplify quality of operation and the spirit of innovation.

The changes in the travel department were born from recognition of customer needs, which is one of the backbones of the Malcolm Baldrige program, Peterson said. That drive to satisfy AlliedSignal's 25,000 travelers, as well as the budget managers, means the company needs "wild-eyed visionaries," as Peterson humorously describes his department's innovative personalities--who include members of Mensa and a former fighter pilot. "We sit down with the computer technology staff and tell them what we have in mind and what we need to do. It's fun to throw ideas at each other."

However, an accelerating factor in Peterson's drive for reporting and processing improvements stems from company CEO Larry Bossidy's objective for the travel department to slash 20 percent from its budget this year, up from the normal 8 percent reduction goal. The company's domestic travel budget is $187 million annually.

While cutting spending is relatively easy the first year or two, Peterson explained, by the fourth year, "you need to generate innovation to make your objective."

When Peterson joined Allied Signal three years ago, he met the productivity improvement targets with a combination of new auditing controls and a retooling of the processes through which 225,000 expense reports are handled each year. Management reports were a different matter.

"When I first arrived here, we had a bunch of ugly, un-user-friendly paper reports for management," Peterson recalled. "The first thing we did was to retool the reports to make them more user friendly, but we found that we still generated huge stacks of paper. I made a more user-friendly report, but it was still not being used."

TEXAS (Travel and Expense Audit System), the auditing program that Peterson installed (BTN, Nov. 25, 1996), allowed for a byproduct of more sophisticated management reports that could be delivered via e-mail in a Windows format. But even that left Peterson with an uneasy feeling that he wasn't quite there yet.

"We knew that a lot of managers were using the reports as intended," Peterson said, "but we also knew that a segment of the management population wasn't using them. They may have been too busy or the data presentation may not have been useful for their style. They were used to getting information through mountains of paper, but not electronically."

To analyze the problem, Peterson used the analogy of manufacturing assembly lines, which use a "pushing" technique, in which the product is assembled and pushed to the next station. But it appeared that a more effective approach to developing management reports would be a "pulling" technique, Peterson said. "We had been pushing out information in various formats. Now we want to say if you are a manager, you probably want customized information. So with a pull system, you can tap into our data warehouse and manipulate the information the way you need it."

That realization triggered the inspiration for Tempest. All the data measured by the program are cost drivers, and if all are in line with stated targets, "then odds are that travel is in line with the objectives," Peterson said.

The manager viewing the Tempest report is able to display it in a graph or as a data presentation, or export it into a format such as Excel. The data is refreshed once a month, and managers may review it at any time.

The program has "drill down" detail search features that permit a manager "to drill to China with it," Peterson joked. "When we sat down to design what we wanted this program to do, we said that if you are the CEO, you need to be able to go into company groups, find and isolate divisions and look across departments," he said. "The objective is to provide information to the budget managers about how well their folks are doing and how that translates into improved earnings per share. If we reduce our travel costs, our shareholders will benefit."

Tempest also requires that the traveler use the designated travel agent, American Express, and that travel be funded through the corporate T&E card. About 93 percent of AS travelers now use the electronic expense reporting system, but that will likely move to 100 percent with the requirement that a traveler use the system in order to get reimbursed.

By attending benchmark meetings, Peterson has discovered that "leakage" in his expense reporting system, while not high compared with other companies, was enough to prompt action. "We had to take every avenue to correct it," he said. "Anybody who goes outside the system today runs a severe risk of not being reimbursed."

If all travelers comply with these requirements and file an expense report correctly, the company has three sets of data that can be accessed to understand the traveler's character. This data also can be used to mold traveler behavior.

For the beta test, "we'll test strategically placed users that have diverse requirements," Peterson said.

The alpha test, which took place in early April, revealed that users didn't like the presentation of some of the data. As a result, "we developed a lot of format improvements in terms of the way the data is presented," Peterson said. Users also said they wanted to be able to take charts from the program and copy and paste them into other applications. "Presentation-ready is what they want," Peterson noted.

Reflecting on the months of work that went into the creation of Tempest, Peterson described it as "very difficult to create, far more onerous than in our bloodiest nightmares." But, he added, the directive from the top to cut costs moved the project along. "When you have a gun to your head, you move fast," he said with a laugh.

While AlliedSignal has been highly successful in developing its own technology solutions for its travel and expense processing problems, Peterson expressed frustration that off-the-shelf items haven't proved workable. "It's a shame we have to develop systems internally," he said. "I've seen presentations that are close to what we want, but they aren't there."

The second component of Peterson's planned three-part interactive system of the future will be under active consideration as of July 1, when the company becomes the second beta test site for Rome. Monsanto was the first.

Fifty users will link up with Rome, an intranet and Internet travel reservation and booking system. The test will last for 60 days, and the final product is scheduled to be launched in October. AlliedSignal began rolling out its own intranet site nine months ago, and all corporate policies are now on the Web. "It's the way to go because it's secure," Peterson said.

Peterson is enthusiastic about the promise of Rome, pointing out that the program will offer such conveniences as around-the-clock usability and airplane seat maps to allow travelers to select their seat on a real-time basis. Rome also will allow travelers to choose hotels by checking a map and pulling up all hotel availability in a particular area. For the travel manager, Rome allows the data display to be ordered to reflect a company's travel policy. "I envision the ability to more effectively shape our travelers' behavior," Peterson said.

AlliedSignal is not yet committed to purchase that particular system, however. "We'll do the beta test, then decide," he said. One aspect of Rome that hasn't yet been addressed is the pricing, he pointed out.

Based on the implementation of AlliedSignal's T&E for Windows product, developed internally 2 1/2 years ago, Peterson expects a 10 percent penetration of his traveling population during the first year of using Rome, or 2,500 travelers.

The third piece of Peterson's plan is an upgraded expense reporting program. "Ideally, we would see a suite," he said. "You would open the intranet, book your travel, get back from the trip and do the expense report on the intranet." Over the next two months, Peterson will evaluate the future needs of the company's expense reporting system, which needs to be a Web application, he said.

For the future, Peterson foresees corporate travel as a ticketless, paperless, receiptless environment. "If we design the process well enough, we should make compliance with company travel policy the easiest thing you do, and traveling outside the policy the hardest thing you do," he said. Under this scenario, travelers wouldn't file an expense report, but would use booking and payment tools that the corporation could track. The traveler would use a smart card to conduct transactions, with all charges passing through to the ledger and cash needed only for miscellaneous expenses.

By configuring the travel function as electronic commerce, the travel department's role would become information management at that point, Peterson said.

But for now, with the imminent launch of Tempest, Peterson is considering whether this new product should be marketed outside of AlliedSignal. "Our company has a neat environment for a team like us," he explained. "We have an entrepreneurial view, and I would feel comfortable going to our leadership and saying we have proved this works, and we should sell the product outside.