Mega Agencies Restructure, Add Consultative Roles

Several of the largest travel agencies recently have restructured management and redefined operations and strategy to enhance the delivery of services to their clients.

Moves by megas American Express and BTI Americas, as well as those of a completely merged Carlson Wagonlit, are focused on casting themselves in more consultative roles.

These efforts reflect the realities of a post-commission cap environment in which the promise of efficient transaction processing through the implementation of new technology isn't enough to guarantee success, and where the large regional agencies, which have employed a more personalized approach to account management, have made noticeable gains.

American Express Corporate Services is concentrating its efforts on putting senior decision makers closer to its clients through an expanded regional structure, while at the same time installing a mechanism to account for the varying needs of its corporate clients according to differences in their travel volume.

At BTI Americas, account managers will shift their focus away from operational responsibility, which will be handled by a separate staff, and focus instead on analyzing clients' strategic issues, using approaches that include benchmarking, implementation of models and analytical tools in their program development.

At Carlson Wagonlit, the reshaping has been driven by the official merger of their two operations two years in advance of their original schedule (see story below). The new company is already in a "global frame of mind," getting set to roll out a $140 million point-of-sale system designed to improve productivity and enhance client relations.

To support its U.S. card and travel service infrastructure, American Express Corporate Services is spending about $30 million to infuse its regional offices with a new level of technological and training expertise.

The investment in its U.S. operations comes on the heels of the company's much-publicized announcement in its year-end earnings report that it will make $125 million in restructuring cuts in the coming year. About 1,000 jobs will be eliminated from its U.S. business units, including the agency, card and stored value groups. The company has yet to determine where these cuts will come, but it has earmarked about $70 million for severance payments.

While the agenda ahead is to reduce headcount, insiders say many of these cuts will come from a combination of attrition and gains in operational efficiencies rather than layoffs.

Meanwhile, in a realignment that it has just begun to implement, Amex Corporate Services is adding personnel at its regional offices and increasing the number of those offices from four to six. The new offices will be in the Northeast and South. In effect, there is also a seventh region, multinational, which is headed by Judith Gardner. Corporate Services will invest not only in establishing senior management at these levels but also in building centers of technological and training expertise, through which employees will provide customers with product information, help assess readiness for products and help integrate the products into existing systems.

The agency intends for these changes to support national account managers, who were too bogged down by red tape to be efficient under the old reporting structure. The idea is to provide customers with better support and speed decision making when it comes to servicing an account.

"We're adding more general managers into the field," said Jud Linville, senior vice president of Corporate Services, to whom the general managers report. "Instead of four managers, we'll have seven: We're adding expertise in MIS, technical sales, support of our AXI interactive product line, expense manager and supplier relations," he said. "Rather than adding this out of one centralized location that would require phone access, we're actually going to have these experts placed in each region so they're on hand. I'm perplexed by competitors who are announcing more centralization. Amex is trying to push its talent and resources into the field, where it can do the most good."

Despite Linville's faith in a more regional approach, Amex also is establishing some new centralized divisions of responsibility, including splitting the managerial focus into large and small accounts and naming a new manager for each area. Linville will oversee accounts of $3 million and more, while newcomer Rick Routhier, formerly with Bantam Doubleday, will be in charge of middle market accounts of up to $3 million in air sales.

Also as part of the restructuring, several former regional general managers have moved up in the organization. Margaret Brownlee, who has been working to streamline reservation and transaction processing throughout 1996 as the general manager of operations, has become the chief operating officer of business travel services. Dan Neuburger, previously the general manager of the Eastern region, is now senior vice president of service delivery and information management, charged with total quality management efforts and global information services responsibility for Corporate Services. Bob Greenfield, who was general manager of the Western region, is becoming the chief of customer office sales. He will focus on sales training and on servicing accounts looking to rebid their business.

Former general managers Cathleen Costello and Dennis Werner will be leaving the organization for personal reasons, according to an American Express spokesperson. Also reporting to Linville is Betsy Ludlow, who will take charge of corporate card marketing and serve as strategic planning officer.

BTI Americas also has retooled its domestic operations to be more responsive to its increasingly global client base. The program it officially rolled out earlier this month, the relationship management process, is a four-phased program designed to carry a client through the entire life cycle of a travel management program.

In phase one, the account executive and his or her team engage in strategic analysis and planning. In phase two, a client undergoes program design and development, in phase three the program is implemented and in phase four it is monitored and adjusted. "We're in the business of helping our clients save and make money," said BTI Americas chief financial officer Lee Turner. "We've known that they need a partner who can offer guidance; that is the value-added that this reorganization is designed to bring."

BTI's 100 account managers will no longer be involved with overseeing reservation and transaction processing, but will instead develop overall purchasing and travel policy implementation strategies. "The companies we deal with are going global rapidly," Turner said. "We wanted to come up with an internal structure that allowed us to be very flexible and consultative. The importance of transaction processing is really diminishing, and our new approach signals that we recognize that fact."

The domestic program rollout coincides with an increasingly unified approach abroad as the many companies that make up the BTI partnership internationally embrace the agency name and mode of operation.

Tom Lacny, executive vice president of sales, marketing and international for BTI Americas, said that both domestically and abroad, the mega would take a three-pronged approach toward achieving enhanced relations with clients.

In addition to the implementation of the relationship management process, BTI will continue its international "unified branding strategy" with Portico products.

"Portico is the international gateway for our entire suite of tools--including self-service reservation, intranet solutions, a hotel information system and back-end data processing," Lacny said. "But rather than think of it as a series of products developed here and exported, it's more accurate to think of Portico as developed with input from all the international partners via our international steering committee."

Also reflecting its increasingly global outlook, BTI has developed an international intranet for its own operations.