Enterprising Buyers Face ERP Issue

<B> Enterprising Buyers Face ERP Issue</B>

<i>Enterprise resource planning vendors Oracle, PeopleSoft and SAP are targeting travel, but what impact are they having on travel technology decisions? Business Travel News editors spoke with two of the pioneers in evaluating--and in one instance installing--travel technology applications developed by enterprise resource planning vendors. Following is an edited transcript of a discussion with Cyndi Perper of Colgate-Palmolive and Terri McVickers of Aetna, both responsible for travel and expense reporting, about the systems in use today at their companies and their plans for the future.</i>

BTN: Which ERP systems are in use at your companies and for what purposes?

Perper: We are SAP all the way and several years ago we made the commitment that we would use SAP in every department, division and country around the world. The decision was coming from manufacturing, because SAP is an excellent application for it. Pretty much as you take a tube of toothpaste off the shelf wherever you purchase your toothpaste, it's already ordering the chemicals that are necessary to make the product. Because of that, we made a global commitment that we would install SAP everywhere, and all future products. So that indicated that I would be using it for travel as well.

Where we are with travel right now is that we've installed the first back-office module for SAP's T&E expense product and we hope to install the front-end intranet version probably early next year. We'll do a lot of testing of the product.

BTN: When did you make the decision with the expense module?

Perper: That was pretty much made for us, so it was a really simple decision.

BTN: When did you find out about that decision?

Perper: Several years ago, I was pressuring the IT department to support me in my efforts to look at different expense reporting systems. They said, "We have this wonderful product for you--oh, by the way it's SAP."

BTN: But it's only your accounts payable clerks who are using the software right now?

Perper: Our expense reporting administrators are using it, plus our accounts payable has been using it for almost two years.

BTN: What kind of modifications did you have to make?

Perper: Well, there were a lot of different modifications. The biggest module within SAP is the HR system. But, we installed the AP module before the HR module. So we had lots of work-arounds. We worked with IT, and I have some dedicated people on my staff working on this, too. It's complicated, but the people like it. Expense reporting administrators like it a lot. They think it's easy to use now that we've totally customized it as much as we can.

BTN: So what's the impact on the traveler?

Perper: They really don't have an impact yet. Their impact is coming.

BTN: So is there a cost savings?

Perper: Previously, we had people on different systems, so there's a real good savings in just putting everybody on the same system. Usually with technology, you don't get the big ROI in year one, you know that's a long-term thing, and I think we're going to have to wait to see how this plays out.

BTN: Do you plan to deploy this to travelers in January?

Perper: I'm not sure if we'll get to the pilot stage by the end of this year. It'd be ideal if we could, but early part of next year is probably when we'll start with the employees. And some of the employees--about 900 salespeople out there--have a semi-automated expense reporting package now that they use. It's sort of something that was created in Excel, so we'll replace that. It'll be a good enhancement for them, so it will get easier.

BTN: Terri, what ERPs are you using at Aetna? Any for travel?

McVickers: Right now, we have Oracle Financial, and PeopleSoft on the HR side. On travel expense, we have manual input right now as well as what's called TEENS online reimbursement. We've had that for several years, so that's what we'll have to replace. The area is called employee reimbursement, because we also do tuition.

My predecessor began looking for a system over a year ago, a fully automated system to handle all employee reimbursements. We evaluated the expense systems of our ERP vendors because they're important players in the marketplace today. If they had more experience they would be, for us, more of a player. But we already had some online work going and we streamlined our expense reimbursement process so much that we didn't want to come back and go into development stages, so we decided on another vendor.

BTN: Who did you select?

McVickers: We signed off in June on Captura's software and we're into the implementation stages now. We should be having a pilot starting in October. We can run the product off the desktop or off the Web. It is very important for us to have an electronic download of card data. With a corporate charge card we do an employee bill company paid, so by making the decision to automate, we have been driven backwards to reevaluate our charge card because we don't want to change that later. We're very close to finalizing our online booking selection, so we're hoping to have all these integrated. So, it's all coming because we don't want to get all online with our expense reimbursement product and have all our policies and our online booking product and have everything loaded and then come back and change it. If we get all this done up front, we've got a more solid run toward the future. We're working very closely with HR and financial to ensure that these systems are integrated.

BTN: So how long had Oracle been in place in the financial side?

McVickers: Some of that is just being implemented right now. We actually had looked at the Oracle expenses, but we didn't think the products were as developed as we wanted. We think in the long run it will be, but they're new in T&E and don't understand all the nuances. When you do a financial system, you're doing software more for a limited number of accountants. On expense reimbursements, you're looking at a very broad user base. We felt that maybe some of the new entrants don't understand all the nuances, and it would not be written so our travelers could use them.

We also did usability studies in an Aetna lab. We actually have people working on the computer testing the products. They have a microphone. We photograph their hands as well as their facial expressions to determine which one is more user-friendly. We were looking for more of what we call a "plain vanilla product" and do a lot of maintenance ourselves, so our ongoing costs will be much lower.

BTN: Did you get pressure from the executives at your company saying "Take a look at these ERP systems, since we've decided to adopt them, look at what they're offering and see if you can make it work?"

McVickers: No, but we looked at them in the process evaluation.

BTN: Do you think that in the long-term the company might ask you to reconsider some of the ERPs? Are they that ingrained within the company?

McVickers: No, but it's something that we would consider just like we would with all technology. I think what we're doing today is just building a base. We have to be flexible in a rapidly changing environment, and there's always a way off, not only between the cost of the process, but changing the culture and changing the way we do business.

BTN: Who within your company is making the decision on ERPs? Is it IT usually or finance?

Perper: You know, IT is always going to be a big driver, but of course it's supported at the top of the company--the CFO, the chairman--or else things don't get done. So really, they're the drivers. They've made the commitment to go toward full enterprise.

BTN: Who should travel managers, facing the travel technology decisions, be talking to to find out what their company is doing strategically?

Perper: I would say talk to everybody in the company. Certainly the IT people--they should have been in touch with them a while ago. Most of these things don't happen in a vacuum. We heard SAP was coming way, way before it was there. To everybody, it seemed like it was going to be a panacea. We didn't think it was. And they were very interested in travel, and when SAP says they're interested in travel, that means they put a great deal of resources behind it. They've had an expense reporting system overseas in Europe and, obviously, it was geared toward European companies and they want to make a broad inlay here, and they will.

The whole process, I think, is infiltrating. The compelling reason to do all of this is that you have one system for the whole company, which is great for a company like ours that has been decentralized for so long and had many, many general and many, many independently operating companies. This will really be a good global base for us and a source of information at every level. That's the key thing: Get the information as quickly as possible to the people who use it. And that's where we've gone with it.

Obviously, none of the systems I've evaluated are really mature systems. You take a system like SAP with a great deal of resources and a company's wish to be in travel and you marry that together, and you have a really good relationship because, I think in long-term, we're going to have what we need. That's what I've consoled myself with.

BTN: Are you helping SAP define what they need to provide?

Perper: Yes. Expense reporting systems have been around forever, and none of them have caught on in a major way as being the system because they're dealing with companies that are so culturally driven and full of nuances.

It's compelling to have one system that would be able to have everything and interface--this is the coolest thing--with HR, and interface with payroll so I don't have to worry when someone changes departments. We've dreamed about this forever and ever. We're getting closer, not only to end-to-end systems in travel, but end-to-end systems in companies. That's what we need to keep our eyes on.

BTN: As far as the full end-to-end travel looming in that, they've still got a-ways to go.

Perper: They've got a-ways to go, but again, they've committed resources. They're going to develop a travel planner. They've committed to that, and it will be quite good. It'll be different.

McVickers: I agree with Cyndi on that. If you go to their Website, you see that they're really looking for experienced people to hire and develop these products. And that's why I say in the long run, I think they're going to be a very strong player. But right now, I don't think they've got it developed yet. And that's the reason we were looking. We needed something soon.

Perper: SAP is different because it is so pervasive; it's not going to be an easy system to customize. I mean, all the code is in German. Everything you need to do is a challenge. Obviously, it's a big boon to the consulting industry because the big four have been making quite a lot of money making people understand these systems.

BTN: So, do you need other products in the interim?

Perper: No, I think we're doing as much work-around as we can. I guess when you put all your eggs in one basket I would just really watch it. Obviously, the good part about this, is that you have a lot to say about how that product is going to work in the marketplace and fit in your company. There's a fun component and there's a frustrating component. It's not for the faint of heart, I think, or the faint of stomach.

McVickers: Anybody who has worked on systems outside of travel knows that the consultant expense that goes with ERPs is phenomenal. They take years to install and the product is almost always behind schedule. But I think one of the things you're going to see is that it's going to move along processes in travel with the enterprise vendors faster is the cost factor, because a lot of companies are structured in such a way that when you say "travel," they downgrade the importance of software. If you're putting in an Oracle, PeopleSoft or SAP financial system, you're just adding this module in what comes out of an entirely different budget, and you don't really have to address it as an issue. When you come back for something like what we were looking for, you have to come back and address this as a separate issue and cost justify it. I think that's the reason you're going to see the enterprise growing a lot more very rapidly.

BTN: What type of information are you now getting that you didn't have before?

Perper: Where the check is in the system, if we're paying by check. What has actually been done. We know everything. We know what current address is in the system and just everything about the person.

BTN: So, it's not clear at this point what the financial savings will be.

Perper: I don't want to put a dollar amount on it, but every check that I don't have to write in the future saves me like $40, so I'm really looking to do that. We want to make things more efficient so that when company executives evaluate our department and ask, 'do we get value for the service that they provide?, Is this valuable to the company or do you need to outsource this?,' the resounding answer is yes! They provide and they are the best customer service out there and everybody should learn from them because they are fantastic. So that's my angle. That's where I want to be, to make the department as efficient as possible.

BTN: So, this is about service?

Perper: It's service, and at the end of the day it's all service that we do anyway. I say to my people all the time, 'well, why do you think we're here? Your mission is to have those people go out there and sell toothpaste. It's not about trying to catch somebody for not submitting a $5 receipt. It's to provide them service, get the check paid, get the people paid, so they can get out there and sell.' This is the last thing they want to worry about and if we don't provide that service, somebody else will.

McVickers: A very positive thing that I'm seeing happen, is travel is getting really more respected as more and more demands go on to the travel managers. You have to have a better understanding of systems, of integration, of accounting and finance, of customer service, of whole process reengineering. You just can't do business the same you have in the past. As the technology comes along and the processes change, it's raising the industry's standards.