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<B>Intranet Fills Policy Vacuum</B>
Electrolux has introduced a global travel intranet to solve its most fundamental travel management problem: implementing and communicating a consistent program throughout a highly fragmented group of companies that does not believe in mandating policy. The intranet, called Travel Planner, gives travelers comprehensive information plus online hotel booking. A pilot with GetThere.com that also will give travelers the ability to make online air reservations will start at headquarters in Sweden in August and then be rolled out companywide.
Electrolux, which owns hundreds of brands worldwide, mainly in domestic electrical appliances, such as American Home Products, Frigidaire, Flymo, AEG and Zanussi, has factories in 60 countries and sells its products in more than 100. Global travel manager Jo-Achim Hamburger, who was named BTN International Travel Manager of the Year in 1998 for his successes in improving data and supplier consolidation within this unwieldy structure, believes Travel Planner can take the company to an even higher level.
This initiative comes against the background of a concerted effort by Electrolux in 2000 to bring indirect costs other than raw materials under greater control. "Indirect material accounts for 15 percent of our costs and it is our significant focus this year," said Jean-Michel Paulange, senior vice president for purchasing as he addressed the company's annual travel management conference in Munich last month. "It is so easy to focus on the more visible direct costs, but in percentage terms we are convinced there are more savings to be made in indirect material, of which travel is a big part." Travel accounts for $135 million of Electrolux's annual $8 billion expenditure.
To fulfill the objectives set by Paulange, his immediate boss, Hamburger has taken the classic route of negotiating preferred supplier agreements following a concerted effort to improve management information through agency consolidation and adoption of a corporate card. As is often the case, however, Hamburger has found that the more he does, the more still needs to be done. Around 60 percent of employee American Express card spend is air travel. Benchmarking by Amex shows that the figure should be closer to 45 percent, indicating that not enough hotel spend is being channeled through the card. Indeed, Hamburger believes that while he has improved capture of air data from 70 percent to 90 percent over the past two years, hotel spend, although also improved, stands at only 50 percent.
Hamburger expects the hotel booking facility on the new intranet to go a long way toward rectifying this problem. The database comprises the directory of German hotel consolidator HRS to which Electrolux has added its own negotiated rates. Booking is a simple task for the traveler. Having selected a city, hotels are offered in order of price, starting with the cheapest. One particularly noteworthy advantage is that the system only offers accommodation that has rooms available on the nights specified by the user. In addition to cost savings, Hamburger expects to get a measure of independence. "We can decide who we send the booking to; Is it travel agency A, B or C or even, in the future, directly to the airline itself?" he said at the conference.
Hamburger believes the extensive, highly useful information found in Travel Planner will prove so useful to travelers that it will draw them into using the booking system. He is powerless to mandate online booking, owing to the strong Swedish philosophy of consensus that guides Electrolux. "I do not see myself as the Sheriff of Nottingham," Hamburger said.
The information featured in Travel Planner is wide-ranging. Much of it is designed to help tie Electrolux to preferred suppliers and increase usage of them by travelers. Amex, for instance, offers a list of frequently asked questions plus a directory of its automated teller machines. Starwood Hotels & Resorts features the opportunity to check frequent guest points status. There are also feedback forms plus information on how Electrolux's global airline deals work and safety, security, visa and vaccination details for each country. Major markets have their own sections, including details on airline deals, taxis (including those that accept Amex), negotiated car rental rates, local travel policy, location maps, local airport Web site links and information on the local branches of Carlson Wagonlit Travel, the group's preferred agency.
Johnny Thorsen, director of European business development for GetThere, described Travel Planner as "one of the best client intranets I have seen." He and other suppliers who spoke to BTN attributed much of the success of the Electrolux travel program to Hamburger's ability to secure highly visible backing from senior management--the presence of Paulange at this month's conference is an example of that. "We have to walk the talk," Paulange said.