PNC Sources, Automates Travel
PNC Financial Services Group in the past year radically converted its travel program, enabling employees to purchase travel in the same fashion as its procurement specialists have sourced other goods and services. The unique, multi-pronged approach blended automation with commoditization and completely overhauled prior practices: PNC moved travel management responsibilities to the procurement department, ditched its corporate travel agency in favor of a global distribution system, put the entire travel process online through a single-sign-on e-procurement portal, created something of an end-to-end solution and issued its first corporate T&E card companywide.
The changes were drastic, and the benefits dramatic, as PNC transformed traveler behavior and reinvented how the company looks at travel purchasing. Pittsburgh-based PNC has seen the significant benefits from the process. "The thing that we felt was even more dramatic than expected—especially on the air side—is that it's driving actual travel costs down," said Clyde Hardt, vice president of PNC Financial Services.
PNC has achieved and maintained a 60 percent to 70 percent online booking adoption rate, a 49 percent decrease in transaction fees and an $80 reduction in average ticket price.
The cornerstone of PNC's travel initiative was integration between Trip Manager booking tool provider and GDS Worldspan with e-procurement provider Ariba, through which the company has merged pre-trip authorization, online booking, expense reporting and e-procurement into one platform. "We reinvented travel, and it was aligned to be a part of the sourcing group's responsibility," Hardt said. "We went through an RFP process to make sure we found the right partner, looking at various alternatives and ultimately selecting Worldspan because they offered not only the booking capacities but they were a full GDS and would also support that with a call center."
Worldspan also supplanted PNC's corporate travel agency, assuming such duties as ticket fulfillment services, help desk support and round-the-clock customer service for technical support and travel reservation support.
"PNC historically used an onsite agency and that agency had as many as 14 people in our facility," Hardt said. "People typically called the agency and made their reservations through a very interpersonal process. Folks would call in and talk to someone on the telephone to make arrangements, and then we actually had people running paper tickets around. We evolved away from that in recent years." Now, travelers sign on to the platform, where they are authenticated and have the ability to search flight options. "It shows the flights in order of lowest to highest cost, and it highlights the ones that are contracted carriers," Hardt said. "It then prompts the travelers to whether they want a car or not, as it takes them right to the car reservation window."
If travelers request a car, one is selected by default, listed and reserved through an agreement with Avis. "It really doesn't give them a choice," Hardt said. "Once they get the car, they go out and get the selected hotel. It searches for a hotel within 15 miles of their destination point. If they wish to expand that, they can, or if they wish to specify a city or location for that, they can."
Some of the units within PNC require pre-trip approval, while others do not. The system flexibly addresses both scenarios. For those divisions that use pre-trip authorization, an automated e-mail is sent to approvers. Once the trip is validated, the traveler receives a reservation and itinerary.
On the back end, the airfare is billed directly to a ghost card, where "the cost center is clearly identified so those charges are directly fed to that company and cost center through the accounts payable reconciliation process," Hardt said. Other charges are billed to the individual liability corporate cards. "As we deployed the travel cards, we worked with the expense reporting module so they are able to scrape that information and pay the card directly," Hardt said.
In the past, PNC centrally billed air, leaving all other T&E expenses to employee payment devices; personal charge cards, cash advances and disparate payment processes proliferated. With the paper-based expense reporting process, it sometimes took more than one month to reimburse employees. To make the travel process as paperless as possible, PNC internally developed an automated T&E expense reporting module.
Travelers fill our their expense reports via a Web page, Hardt said. Then, they fax in the receipts to a fax server, on which digital images of the receipts are matched to the corresponding expense report. Since the reports are tied in with accounts payable, the system automatically pays travelers' cards.
Prior to the integration, PNC had a more conventional travel program, relying on an agency, manual expense reporting processing, disparate payment options and very few online offerings. Air ticket prices also loomed above national averages. However, a harbinger of new practices came when the company began using an e-procurement platform through Ariba, called PNC Buys. The system initially was used for a wide range of indirect spending within the organization, for office supplies and other commodities. Last year, PNC shifted the success of the e-procurement program to travel. "We rolled out the Ariba e-procurement platform about 15 months before the travel piece. So we were up and running, and we rolled it out across the company to something like 22,000 users," Hardt said. "Before the travel components were added to the procurement platform, PNC already had benefited from first focusing on the e-procurement platform, using that traditionally. Then we went about the travel integration effort."
After a pilot in June and July of last year when Worldspan's integration added the travel component, the company ended up with a single online portal for all employee purchases. "When the decision was made in early 2002 to align travel with the procurement group, we were the folks driving for that decision because we look at travel just like any other good or service that the company buys," Hardt said. "We had internal discussions about whether to integrate a B2B booking engine to the platform. A lot of companies go outside the platform and have it on a standalone basis, but we thought it was critical to have a one-stop portal where anything and everything that employees need to do their jobs from a purchasing standpoint is available."