New Tools Trim Costs And Add To Job

<FONT SIZE="+3"><B> New Tools Trim Costs And Add To Job</B>

<B>T</B>he components of travel systems for booking through expense reporting that business travel buyers will see on the NBTA show floor this week demonstrate that a new era has arrived.

New software and more secure online connections are making it possible to automate the entire business travel process, and those travel suppliers and buyers who are not getting ready to change the way they do business accordingly are already behind.

While this is only the beginning of the first generation of those systems and services, corporate buyers see the potential they hold to yield a significant return. The new systems and the new medium are making it possible for individual companies to choose how to tailor the reconfiguration of the travel process to suit their needs and cut costs.

These new tools are giving business travel buyers a real choice as to whether to take more functions in-house and work directly with airlines and/or CRSs, or to outsource even more functions to travel management companies. Many buyers are beginning to use intranets to coordinate their travel programs. Some corporate users and many agencies are seeking ways to use the Internet to bypass CRSs.

More than ever before, airlines, computer reservations systems and travel agencies are lining up to compete against one another for business that has belonged to travel agencies since before airline deregulation. That there will be significant leakage to direct supplier channels is certain.

With so many automation products and online services still in the box, it is hard to evaluate the value of those that have just been unwrapped. The sheer number of choices is daunting, and figuring out which components will plug into others and whether these systems can be integrated with existing corporate information systems or provide Internet access is very confusing.

Because of the enormous scope of these new choices, it will take most companies the next year to come to terms with them. These changes not only alter the way that airline tickets are distributed and hotel rooms and cars are booked, they change the job requirements and the negotiating practices of travel managers and senior executive travel buyers. Travel buyers who don't have a firm grip on travel negotiating and distribution, accounting practices, and computer and communications systems are in danger of making the wrong decisions as they face these new forks in the road.

The promise of electronic commerce is the costs that can be cut from the distribution process, such as costs of travel agent labor, wasted time, communications errors and redundant internal paperwork.

Even if online bookings account for only the 30 to 40 percent of travel that is point-to-point, that still represents enormous costs that can be cut out of the process.

The latest attempts to cash in on the promise of costs that online services can cut have come from Northwest and KLM in the form of an online commission cap, which subtly includes an international cap, and the long-awaited entrance into the travel business by Microsoft, which announced last week that it will offer a consumer Website that also will undercut standard agency commissions (<I>BTN,</I> July 29).

Meanwhile, partnerships between some other heavy hitters, including Carlson Wagonlit with TravelNet and GE Capital with WorldTravel Partners' TTG, already have begun to deliver the components of the first generation of end-to-end automation systems. Alliances also are integral to the solutions being developed for Sabre's BTS product and United Connections' corporate module, both of which are several months away from being on the market.

Yet even though it still may be a little bit early for business travel buyers to be able to kick the tires of much of the new machinery, they had best be ready to take the wheel.

For some, that means finally acculturating themselves to computers. For others, it means coming up to speed with and staying on top of the new tools of the trade, including harnessing the online juggernaut and comparing the relative strengths of the modules that make up the new end-to-end systems.

The future has begun and we must face it now. The only thing that seems certain is that the pace of technological advances for our industry is ramping up fast and will accelerate from there.