<B> Bells Merge Travel Spend</B>
<I>New Bell Atlantic Moves Fast</I>
By Sarah Welt
<I>New York</I> - Following the merger of Baby Bells Nynex and Bell Atlantic last August, the new Bell Atlantic has rapidly moved forward with a reorganization of its travel program.
Through its corporate sourcing program, the new company selected one agency, negotiated deals with suppliers for air, hotel and car, and built on the best travel practices of both pre-existing entities.
Rather than focusing solely on getting the best price, the corporate sourcing program centered heavily on customer service. The corporate sourcing organization established a report card to measure key service levels of suppliers. Beginning in August, a 15-member cross-functional team, including sourcing, finance, IS, legal and marketing, pursued traditional travel RFPs--rebidding every area and establishing requirements as a team.
Prior to the merger, two different agencies were used for each of the companies. But when Bell Atlantic went out to bid for an agency, it decided to go with American Express, one of Nynex's incumbents. "We've been full bore since August," said John Strong, sourcing process leader at Bell Atlantic. "In record time, we implemented one travel agency for all of Bell Atlantic. We did it in a three-week period." The company started with Amex as its consolidated agency Jan. 1.
Before the companies merged their travel departments, each program was analyzed for similarities and differences. Bell Atlantic wanted to focus on synergy savings, to see "where the quick hits were to save money in the short term," Strong said.
Since negotiations began, the company, with $50 million in total travel spend, identified two primary and a few secondary suppliers for air. Strong said airline negotiations have been a phased-in process beginning around the first of the year. "Based on patterns, we had some similar relationships," Strong said. "We were able to leverage our combined volume with a number of suppliers."
Renegotiating with hotels was most difficult in the seller's markets of New York and Boston, frequent travel destinations for the company. In addition to renegotiating, "we ratcheted down the number of hotels we have in New York and we drive volume to those hotels," said Strong. "We use the concept of anchor hotels in big cities" and then if those hotels are full, nearby "we're aligned with smaller hotels." Bell Atlantic currently has nine preferred properties in New York and 200 hotels overall. All properties are listed on the company's intranet.
As for travel policy, Bell Atlantic's cross-functional team looked at the two individual companies' policies and and benchmarked them against those of six other companies. The new policy will roll out April 1. Strong said there are additions to the traditional policy. "The pre-merged Bell Atlantic did not require travelers to book everything through the agency. They are now required to do so through the new policy."
In other policy changes, travelers are encouraged to drive to destinations five hours or less from home. Travelers can fly business class overseas on flights of eight hours or more; if they plan to go right to work when they get off the plane, the requirement is reduced to six hours. And a new option was added to the policy regarding hotels. "If the destination is sold out or there are reasons to stay with relatives and you do that, you are saving the company money, so we'll provide a gift to the people you're staying with," said Strong. "It's an incentive to save money." And every bit helps when you have 35,000 travelers.
The company has ambitious plans for technology this year. Prior to the merger, each company had a separate travel intranet site. The new travel site merges the two and houses the company's travel policy and hotel guide, as well as a feedback mechanism for travelers. Eventually an automated booking system will be linked to the intranet, but for now, it is essentially a communication tool. Bell Atlantic waited to get its feet wet with automated booking technology because it "sensed when we went out to the marketplace that it was growing by leaps and bounds," said Strong. "In talking to technology companies, in the midst of iterations, we sensed the marketplace and we weren't where we wanted to be. So we postponed until '98."
Strong said the company is now ready for online booking and should have a system up and running by the end of the year. Because 60 percent of its travel is point-to-point trips, and 95 percent are domestic, "we see ourselves in the right place for online booking systems," Strong said. As for expense reporting, a portion of the merged company has had its own automated system in place for several years and the merged company is not planning to bid out for a new product in the short term.
Data warehousing is also on Bell Atlantic's radar screen. "It is absolutely going to be a key component," said Strong.
No single card supplier has been selected yet, though the incumbents are American Express and GE MasterCard. The team met last week to begin preliminary discussions not only for card, but fleet service and purchasing as well. Strong estimated that from the beginning through implementation, the process will take six months. Strong also said he doesn't expect any bids to hit the marketplace before mid-year because of the complexity of the multifaceted negotiations.