<B>Amex Fulfills Online</B>
<I>New Products Based On Three Years' Experience W/ Smaller Cos.</I>
By Megan Hjermstad
American Express Corporate Services today is set to announce a new suite of end-to-end interactive products and services, which includes online travel fulfillment for corporations and travel technology providers.
Business Travel Interactive Services will deliver a full range of online reservation support, file finishing and ticketing fulfillment in a dedicated environment to deliver cost-savings and improved efficiency to companies that use any interactive travel product, including American Express' online booking products.
Rich Miller, vice president and general manager of the interactive travel group, predicted that 10 percent of business travel transactions will come through centralized fulfillment centers by the end of next year. "There is demand in the marketplace for this," said Miller. "One of our advantages is we already have a great deal of experience, and already have the technology in place to automate the booking process."
American Express in 1997 began providing low-cost online fulfillment services for small and midsize companies. The interactive travel group now is servicing 1,000 small Amex One customers and 30 midsize Amex One customers. Another 30 midsize corporations in various stages of implementation will be included over the next 60 days.
Amex in mid-August introduced its first large-market customer, Honeywell on Sabre BTS, and by year-end will bring into the center three or four more, including CT 100 companies Cleveland-based TRW Inc. and Stamford, Conn.-based Thomson Corp.
Amex also has partnered with GetThere Inc. to provide online fulfillment and support to companies that have selected the GetThere online booking tool.
"It is a very different thing from picking up the phone to call a booking engine," said Miller. "The single point of contact is designed to make life much easier for the traveler. What we're offering is navigation assistance, 24-7 assistance on the road from one number and a fine-tuned back office that runs through customized file-finishing."
Other travel management companies have begun to offer dedicated centers and extend their back-office fulfillment expertise to the online area as well. WorldTravel Partners this month will begin to offer online fulfillment to its first corporate clients (BTN, July 31).
Since it opened its ECom service center for online fulfillment in St. Louis last December (BTN, July 10), Maritz Travel Co. has implemented a dozen clients, including Dell Computer Corp. and Thomson Consumer Electronics, and soon will integrate another half dozen clients. Maritz has partnered to provide fulfillment for Web Miles and is in discussions with one of the major tech providers to do third-party fulfillment.
Maritz has seen an average 18 percent month-over-month growth rate of transactions coming through the center. "We have the infrastructure and processes to support any GDS or online booking tool," said Mike Tenholder, vice president of electronic distribution. "Our strategy is to offer flexibility of choice."
Amex is offering mid- and large-market clients the opportunity to work with any online booking tool as well. "We have modualized the platform so depending on what the customer wants in the large market segment, if they've already made a selection of the tool, we can do fulfillment in the center at a substantially reduced cost," said Miller.
While online travel in the corporate sector is ramping up fairly slowly, companies are increasing adoption rates and moving into the dedicated environment with the expectation of significant cost savings. For large and midmarket clients the centralized fulfillment center provides an opportunity to save 50 percent to 70 percent off of traditional bookings.
Vicki Evers, vice president of office services at Chicago-based Jones Lang LaSalle, a real estate services and investment management group with $18 million in U.S. booked air volume, expects to cut transaction costs in half by moving to the RezPort model. Patrick O'Halleran, manager of travel reporting and communication at Honeywell, said it is too early to see the savings, but is anticipating significant savings off of transaction fees as well.
Thomson Corp., which will move online fulfillment to the Miami center in November, has yet to see the cost savings associated with the center. Thomson has been using AXI since 2Q98, but is migrating in phases to CTO beginning this week. Currently with 11 percent adoption, Thomson's goal is to reach 20 percent adoption by year-end. Chris Staal, director of corporate travel at Thomson Corp., said Amex's ability to provide e-fulfillment for whatever clients are using is a strong selling point. "If CTO were to not meet our needs and we went to another provider, we wouldn't have to change fulfillment," said Staal. "In the onsites, retraining of counselors would be necessary."
The American Express Interactive platform is capable of supporting any products, but was developed specifically for small and midmarket customers to use its RezPort booking model, an adaptation of the GetThere product. RezPort is a privately hosted Web site for lightly managed small businesses. RezPort Plus allows for some customization, but it is tailored to midsize companies that have fairly simple travel policies and less complex supplier agreements.
Jones Lang LaSalle in June became a new American Express customer and adopted the RezPort Plus model. "We were interested in their technology," said Evers. "We wanted the whole service encompassing all parts and we wanted somebody to manage the transition and understand our goals for adoption."
Jones Lang LaSalle after the first month and a half had 56 percent adoption and currently has 76 percent adoption of the online booking tool. The company is expecting 90 percent adoption by year-end. "Mandated is a hard word, but we have required employees who have simple domestic routes to book online," said Evers. The company also is influencing traveler behavior by billing transaction fees back to the traveler's corporate card so employees are aware of the additional fees associated with human-assisted booking.
Jones Lang LaSalle uses a traditional Amex business travel center for international, group and complicated domestic trips but callers needing assistance booking online can call the 24-hour 800-number attached to the Miami center.
Amex has a center in Phoenix specializing in small customers using the RezPort model, a new center in Miami specializing in online fulfillment for mid- to large-market clients and in the next 90 to 120 days will open another center to provide backup in case of emergency.
Honeywell is using Amex's Phoenix res center for the 30 percent of travel reservations that are more complex and require more hand-holding, and the Miami center for the 75 percent of travel that are simple one-way trips. Honeywell, which has $135 million in U.S. booked air volume as a result of last year's merger with Allied Signal, is approaching 8,000 online reservations a month and already has reached its year-end goal of 70 percent adoption. The Sabre BTS product was rolled out to former Allied Signal employees late last year and former Honeywell employees were brought on in August.
Although the company does not mandate, Honeywell in February rolled out American Express' fee allocator and began charged a pricing differential for agent-assisted bookings, which drove adoption from 10 percent to 50 percent over the course of two to three weeks. Amex worked with Honeywell through the implementation using the Six Sigma approach, a review methodology used to identify areas of increased productivity and process improvements. American Express added in hundreds of custom processes to further automate fulfillment for Honeywell.
Amex also has deployed a sophisticated call reporting system designed to help companies improve adoption. The system can provide information about the types of calls coming in, which department is driving most of the calls and which travelers are calling in the most.
"We want, as our customers want, to convert 100 percent to come through completely electronically, without human intervention," said Miller. "With the back-end system that does file finishing, not as much is made of the people but the system is only as good as the people who drive it."
Amex agent productivity in terms of numbers of transactions is four times greater in the interactive platform. Corporations also benefit from having one group of agents trained specifically in using and supporting online tools. By shifting business to centralized centers, counselors in the business centers don't have to learn all the intricacies of Web-based tools. "In full-service offices, consultants are not necessarily trained in the idiosyncrasies of online booking tools," said Maritz's Tenholder. "It is an awful lot to expect of a res agent."
Staal, who has one counselor in each of Thomson's seven U.S. onsites trained for and dedicated to quality control and file finishing in AXI, said, "It will reduce the need to supply that one headcount and give us a chance to manage online transactions separately. We're not asking counselors entrenched in the traditional way of doing things who are savvy with a higher level of expertise to do e-fulfillment as well."
However, Evers said, business travelers have learned that the "agents are not travel agents. They don't know midtown New York.