<B>J.D. Edwards Globalizes</B>
By Megan Hjermstad
<I>Denver - </I>As a provider of flexible solutions essential to running complex multinational organizations, it is fitting that J.D. Edwards has taken an innovative approach to streamlining its international travel program. The company this year began consolidating agencies globally, targeting savings on its global air volume of $33 million--$24 million of which is U.S. booked--and integrating Internet technologies worldwide.
Heading up the initiative is Betty Moilanen, a 13-year industry veteran who left the agency side to join J.D. Edwards in 1998. Moilanen, worldwide office service manager who is responsible for J.D. Edwards' $70 million global T&E, conference center, cafeterias, housing and fleet, works in a commodity team with office managers in other countries. "When we did the agency bid, for example, we brought together 12 people from different locations and areas of travel purchase to make the decision and so they could go back and sell it," said Moilanen.
J.D. Edwards at the end of May completed an agency bid for the Americas and in July transitioned from Carlson Wagonlit Travel to WorldTravel Partners, which now services the company in the United States, Canada, Mexico and Brazil. "We only included agencies that could meet our needs on a global basis, because they participated in the European bid and they'll participate in the Asia bid," said Moilanen. J.D. Edwards now is finalizing the European bid and will select one or two agencies to service all of Europe. Moilanen then will focus on Australia and Asia. "Prior to this process, we had about 25 agencies worldwide and our goal is to have less than five by the time we're done," she said.
Although J.D. Edwards now has a single agency in the United States, Canada, Mexico and Brazil, each country has its own pricing and service platform. "We're in an onsite in the United States, so we pay a management fee and direct expenses and then we've broken out some components. We're on a transaction fee in Canada and we have broken out a few pieces of that as well that we pay outside of the transaction fee. We're on the old-fashioned rebate in Mexico, which is pretty typical," she said.
J.D. Edwards in September started charging agency fees up-front at the time the trip is booked in the United States and Canada. In Canada, the fee is going back to the individual's credit card, but in the United States the company is billing out to the business units on a monthly basis based on a statement from WorldTravel Partners. "The traveler is being advised on the front end that he is being charged the fee. His itinerary says, 'You have been charged X for this transaction,' " said Moilanen. "What we've done in calculating that fee is just put a consolidated number on the itinerary to cover all of our costs."
To encourage online booking, Moilanen is planning not to have any charge associated with a reservation booked online. J.D. Edwards in September introduced the GetThere product to its entire U.S.-based traveler group, following an August pilot with 102 travelers. Within the next six months, the company will roll it out to Canada and then to Europe. "We're at about 5 percent already, which is good news, but by the end of next year we are hoping to see up to 50 percent, which is pretty aggressive, but we are marketing the heck out of the product," Moilanen said.
J.D. Edwards in August also published a new worldwide policy. "Our goal is to have country-specific procedures that link to that document for each of the countries," Moilanen said. Nothing is mandated, but she said policy is a lot stronger than it was in the past. Vice presidents have to sign off on an exception before the agency will allow it, but it still goes in a report, which is reviewed by an executive committee. The company so far this year has tracked more than $3 million in cost avoidance through its negotiated contracts.
Moilanen also zeroed in on air spend this year and did a global airline bid, selecting one carrier for the majority of its international flights. Some local agreements with regional carriers also are in place. The company has net-net fares with the majority of its preferred carriers. Moilanen said the impact is biggest in the United States, where about 65 percent of its tickets are net net; ultimately over 80 percent should be net net.
Most of the company's hotel negotiated rates are net, except in places where it doesn't have enough volume to justify a formal agreement, then it uses the WorldTravel Partners rate.
Moilanen prefers American Express' credit card reports in terms of data because they provide more information on actual spend, although the company also uses agency information and its One World systems to pull the actuals being charged to cost centers.
"Data for us is critical," said Moilanen. "It's one of the reasons we want to move to Extensity worldwide because we think that will be our best source of information." J.D. Edwards in the fourth quarter of this year, will roll out Extensity beginning in Europe, then Asia and circle back to the United States and replace its current product, Interpro.