Citibank Banks On Consolidation

<B> Citibank Banks On Consolidation</B>

By Sarah Welt

<I>New York</I> - Citibank N.A. expects to save $10 million in 1998 as it continues reengineering its travel program.

So far this year, Citibank has consolidated its $100 million air volume for the first time with a single domestic agency, worked out continent-wide hotel programs for Europe and Latin America, and begun tests of online booking and expense reporting systems.

With a presence in 100 countries, Citibank now is down from using an astounding 600 travel agencies in the United States alone in 1991, and moving toward having one European agency within the next 24 months.

The ultimate goal is to "save 2 percent of our half a billion dollars in travel and entertainment spend, and that would be a significant contribution," said Citicorp Business Services vice president Judith Ervin.

Eighteen months into a broad company reengineering and quality initiative, Citibank is moving away from sharing its domestic travel account among five regional agencies in the United States and consolidating with Rosenbluth International in a rollout that began in January.

Previously, Maritz Travel had about 80 percent of the account, with the rest split among Associated Travel, Travel and Transport and McCord Travel Management, and minority vendor Age of Travel in Atlanta, which it will continue to use.

"The time was right for us to move to a single source," said vice president of global travel management Mary Kay Bellersen. "We had one agency in each U.S. region, but we felt that a single agency could deal more effectively with the many initiatives we have planned. And as we move to net fares and fees for services, we cannot realize economies of scale by having different agencies in different regions."

Citibank's vendors, including the five agencies, have all cooperated on a commitment to augment service delivery. According to Bellersen, the company has a "huge worldwide initiative focusing on quality. We felt if we are committing to live by this dogma, we want our vendors to have the same philosophy as we do: a passion for delivering supreme customer service."

But despite its "wonderful relationship" with vendors, Bellersen acknowledged that there were "inconsistencies in the process." Indeed, she noted, part of what attracted Citibank to Rosenbluth was the fact that it "had documented processes in great detail and was very willing to share them, even in the bid situation."

Among the more interesting bids that Citibank passed up, Bellerson noted, was a proposal by Synergi partners McCord and Associated Travel to create a limited liability joint venture. While Bellersen found the concept intriguing, Citibank chose not to go with the configuration because it "didn't have an established entity" and was "too new a concept to take on blind faith."

But, she noted, if the joint venture "had a track record and a corporate culture, I think it's an excellent idea. This is where consortia can share, if they can form a seamless company."

Ultimately, Citibank chose Rosenbluth to handle not just its travel, but also its travel system integration and the help desk for its online booking product.

On the technology side, Citibank has been working with Sabre on the development of the Business Travel Solutions online booking product. The company began a 100 person, 30-day pilot of BTS version 1.2 at the end of last month. The new version "looks much better and the functionality has improved too, to include seat selections and upgrades," Bellersen said. Hotel selection also has been enhanced, allowing the travel program manager to customize the hotel module.

As the product rolls out, Bellersen plans to charge back the cost of making reservations to the individual business units, to highlight the cost savings of making bookings online rather than calling them into the agency.

That's a tack that has proven successful in the global arena, where Bellersen has gained buy-in from international executivesby returning airline savings to individual countries that agree to submit their data to the U.S. travel office. She now receives spending data from 55 agencies around the world, and rebated about $3 million to the countries in 1997.

Internally, Citibank has 88 internal travel coordinators who oversee local travel agency and hotel contracts, as well as provide recommendations on additions and enhancements to the travel program. Coordinators from key countries periodically meet to form travel councils. The first European council, formed in 1995 for the direct purpose of negotiating a pan-European hotel program, has become the model for other purchasing council meetings.

For expense reporting, the company recently signed with Portable Software and is rolling out its XMS system. A pilot with about 50 people started last July, with travelers submitting expense reports through e-mail and receiving reimbursement through electronic funds transfer. Ervin, who serves as project manager for the travel reengineering effort, said the company now has begun rolling out the product, beginning with the corporate realty services group in January. Next on the agenda will be a rollout to "our next big group, Diners Club," where 100 salespeople now have access to the system. Before the year is out, the company plans to export the system to the United Kingdom, and to have 20 percent of its total traveling population using the product.

With the recent IRS ruling allowing electronic receipts instead of paper (<I>BTN</I>, June 23, 1997), Citibank no longer requires receipts for charges put in the card, with the exception of hotel bills, where the folio is needed to provide breakdowns. The company also is "talking to the IRS about having travelers keep receipts themselves," Bellersen said.

Meanwhile, Citibank developed its own electronic hotel RFP process in 1995 for its North American hotel bid, followed by European and Latin American bids in 1996 and 1997, respectively. "Of the 700 properties currently in our directory, 75 percent have gone through a regional bidding process using electronic data collection," Bellersen said. "What has made the program unique is that the travel department is the utility--the countries nominate the hotels and we set up the bids on their behalf. The bid responses are returned to us and are scored by our team, but hotel selection is made in-country."

On the airline side, Citibank does 40 percent of its business with one carrier in a net-deal arrangement. That clout also allowed it to negotiate some guaranteed flat fares that cannot go up, even if the airline increases its rates, for the term of the contract.

Not surprisingly, Citibank uses Citicorp Diners Club as its T&E product in the United States. Bellersen said the company intends to roll out a single corporate card worldwide but declined to give a time frame. In places where the Diners Club card is not widely accepted, the plan is to allow the use of the Citibank Visa or MasterCard.

On the horizon for 1998 is a focus on the group event product being developed by Rosenbluth and Diners Club.

"Meetings is an area where people are charging things to different budgets and direct-billing hotel charges. We'd like to start looking at group expenses in a consolidated way," Bellersen said.