<B> E-Booking Electricity</B>
<I>VeriFone Scales Adoption Wall, Moves 54 Percent Of Bookings Online</I>
By Mary Ann McNulty
<I>Santa Clara, Calif.</I> - Smashing the adoption barriers that have stymied many corporate online booking deployments, Hewlett-Packard subsidiary VeriFone started off 1999 booking 54 percent of all tickets online.
Perhaps equally surprising, it has hit that mark just eight months after deploying Internet Travel Network's Global Manager system to its 1,500 U.S.-based employees.
Manager of corporate travel Dorian Stonie said automating the travel booking process has saved Veri-Fone $450,000 on lower airfares alone. The company has a U.S. booked air volume of $5 million.
Consistent with other corporate success stories, VeriFone is finding that travelers are picking the lower fares when presented with on-screen choices. Its average ticket price is 15 percent lower on bookings through ITN than through live agents at its onsite American Express office, Stonie said. In some instances, travelers even are opting for connecting flights to lower costs.
"When we ventured into online booking systems, the first thing people looked at was the reduction in labor. But it's really the incremental reduction in average ticket price that produces the biggest savings for the corporation," Stonie said.
Learning from VeriFone and Texas Instruments, which achieved travel savings of 20 percent in 1998, ITN vice president of new business development Dan Whaley said, "The number-one single thing to achieving savings isn't how the booking system is priced or some twisted back-end way of giving rebates, but how effective the company you're working with can be in helping you achieve a rapid adoption. Overall, you have the ability to save 15 to 20 percent. The longer you wait, the longer you're losing incredible amounts of money."
In light of this finding, ITN later this year plans to roll out a full-scale adoption program that will leverage the best practices of corporate customers, Whaley said.
The labor and operational savings due to less rework, along with enhanced customer service, can add to the financial return on a company's investment in a booking system, but those aren't figures that Stonie is quantifying right now, as the average ticket cost savings are so great.
One of the interesting statistics to emerge in VeriFone's monthly travel tracking, Stonie said, is that online booking reservations tend to be made 14 days or less in advance of travel, while agent bookings are more often for trips at least 21 days out.
Obviously ITN has been handling more of the routine reservations, freeing up the agents to spend more time with travelers who have a greater need for their help on more complex trips. "This is the exact scenario we want to see," he said. "We don't want agents with 15 years' experience booking shuttle flights."
Another interesting statistic is that the peak use of ITN is during lunch hours. "Before, I would have 50 travelers trying to get hold of five reservationists. Now all the travelers can be accommodated at the same time," Stonie said.
The key to boosting usage on the system, though, was keeping it simple and offering online booking as an option alongside the standard electronic travel request form on the corporate intranet's four-year-old travel home page. A barrage of brief, light e-mail reminders seem to have helped too. Stonie said he doesn't believe in either mandates or reducing agency service levels to drive up online usage, tactics some corporations have tried. "The hardest part is getting travelers through their first few reservations successfully. But if I can do that, we've got them hooked," he said.
From ITN's perspective, what has made Stonie so successful is "really the effective roll out of his program, good communications with us in identifying any problems, and effectiveness at communicating at VeriFone to get senior management buy-in and use of the system," Whaley said. "Obviously, it's a high-tech company and that helps. But Dorian has a very magnanimous personality and is a good communicator."
Over the past two years, Stonie said, it's been crucial to be able to customize the ITN application to use terms that VeriFone travelers can understand. For example, instead of asking for an employee's password, which Veri-Foners think is their internal system password, the booking system asks for their secret word.
Such nuances were changed during the year-long pilot of ITN, before the full rollout last April. Also adding to its success was the fact that VeriFone has had an in-house electronic travel request and confirmation system for more than a decade. Any employee in the company's 22 U.S. and 18 international offices could access the system, complete a travel request form and forward it to an agent for booking and routing to a manager. The data also was transferred to a database that any employee could access to learn the itinerary and local contact information of their colleagues.
As a leading provider of secure electronic payment systems, VeriFone encourages its employees to be on the cutting edge of technology, Stonie said. That fact is illustrated by the e-mails and telephone calls he receives from international offices, complimenting him on the booking engine. Although international deployment of ITN is on the drawing board, ticketing and other complications prevent him from moving forward just now. However, employees based overseas already are using the application to book car and hotel.
One other nuance that Stonie has detected is the changing distribution patterns for car rental bookings, 60 percent of which are now made online. To promote preferred air, car and hotel vendors, Stonie and the vendors used to work on the agent level. Now, they're going to have to work at the traveler level.
The VeriFone implementation has impressed ITN so much that it decided to award Stonie its first Visionary Of the Year award, giving him not only a plaque, but also a free month of service and an upgrade to the next product version. "We saw a need to really recognize the client amongst the ITN client base and the person at that client who was most effective or innovative in implementing online travel automation," Whaley said.
While more than 50 percent of all the bookings in December and January went through ITN, Stonie is expecting the next threshold to reach 60 percent. Since Southwest Airlines cannot be booked online (VeriFone uses Apollo) and few complex itineraries are using the system, Stonie estimated that 70 or 80 percent of VeriFone's travel is the maximum that could be automated.
Part of the Hewlett-Packard travel team since its acquisition of VeriFone last year, Stonie is working with his colleagues to devise a beta test of ITN for H-P's California region. Previously, H-P, an early beta tester of the ill-fated United Corporate Connection, reported limited success in moving travelers to online systems.
As for advice for fellow travel buyers, Stonie said, "Do not shy away from experimenting. There is no utopia out there for any booking system or process. Just get your feet wet, find out what works and what doesn't work in your environment. And remember, technology is the easy part; the hard part is changing people's behavior and logic.