BTN Honors Futch As The 2006 Travel Manager Of The Year

Business Travel News this month named Wal-Mart director of global travel services Duane Futch Travel Manager of the Year. Futch during the past 12 months and beyond has spearheaded initiatives within his company and on behalf of the industry at large to garner the distinction.

"Most significant among this buyer's accomplishments is the flight-testing of a global approach through which the company has consolidated strategic supplier contracts, Sabre global distribution system services and payment system UATP to create a unique U.S. point-of-sale structure that has pushed the envelope for Airlines Reporting Corp. Corporate Travel Department operations and is eliminating barriers to the international financial settlement of the ticketing process," BTN Editor-in-Chief David Meyer said this month at the award reception in Chicago.

At the crux of Wal-Mart's travel program is an increasingly global ARC-accredited Corporate Travel Department and strong cooperation with suppliers to invent a unique approach to travel purchasing, settlement and payment through a Bentonville, Ark., point of sale.

"Currently, we have our ARC number at the home office in Bentonville. With Sabre's assistance, we've developed pseudo-cities with those countries we've converted to our CTD umbrella," Futch said. "Presently, we've taken out travel management companies in the U.K., Mexico and Canada and replaced them with our own in-house travel professionals. We now have the GetThere tool, which resides on the desks in all those countries. If you book in the U.K., it then transfers that data into the U.S. It is then e-ticketed in the U.S., the booking is then transferred back to the U.K. and payment is then made in local currency through UATP."

Futch continued: "It's definitely cross-border ticketing. We don't know of any other CTD conducting business in this manner, as it has been a long, involved process implementing the program."

The process has been years in the making, starting in 1999 when Wal-Mart began a shift toward agency independence by becoming a CTD. The move to insource sparked a 10-year strategic plan that still is coming to full fruition. "At that point, it became evident that we were well into the process of reinventing the way Wal-Mart does travel," Futch said. After setting the foundation for its CTD approach in the United States, Futch and his team—which includes his left and right hands, Teresa Asbery, who manages domestic operations, and Mary Sharp, who manages global programs—moved in tandem to realize the model in other regions.

In the past year, the Wal-Mart corporate travel team rolled out the CTD—as well as its unique settlement, payment system and U.S. point-of-sale status—in Canada, Mexico, Puerto Rico and, most recently, the United Kingdom.

"We took the theory that we only wanted one GDS, which is Sabre, one electronic booking tool, which is GetThere, one settlement engine, which is ARC, and one payment program, which is UATP. We also wanted a group of suppliers strategically situated to provide service around the world and also on a local basis. We like to think global, act local," Futch said.

Futch and his team had to clear several governmental hurdles. For example, Wal-Mart had to secure approval from Canadian tax authorities to enable U.S. point-of-sale status for tickets issued in Canada.

"We had our tax attorneys in Canada and the U.S. working on this project," Futch said. "It took about four months to obtain a favorable tax ruling and approve our method of doing business. You work through a lot of the pieces of the puzzle when you do this in different countries."

Futch continued: "The tax rule in Canada is you have to make sure the HST, PST and QST taxes—those are province taxes and government taxes—are reported and collected. The issue was to get authority for a U.S.-based CTD to be the point of sale for tickets that were being booked in Canada and making sure the appropriate taxes are being collected. You have the same thing in Mexico. We ended up with Aqua, our midoffice tool, making changes to display the taxes a little differently to ensure that we were in compliance with reporting requirements."

During its most recent push in launching the CTD in the United Kingdom, Futch said data transfers from Europe to the United States was at the forefront of obstacles. "We faced challenges that we really don't face here in North America. One of them is data privacy. We had to ensure the collection of data in the U.K. into our GetThere system was being done appropriately and in accordance with E.U. regulations. We also had to make sure that any personal data transmitted to the U.S. was protected and on secure lines. In conjunction with this, we also had to ensure the information going to the suppliers to make a reservation was only the minimal data required to make that reservation. When a Wal-Mart associate develops their profile in GetThere, we make sure that the data is the minimal amount required to make a booking. We only need first name, middle name, last name and passport number. If they choose to put other data in, they can, but we don't require that."

In addition to overcoming tax authorities and various data-privacy laws, Futch and his team also had to alter perceptions of suppliers—particularly regional players. "We had to change the paradigm of how these carriers approach their business with Wal-Mart," Futch said. "They ask, 'What do you mean the tickets are going to be e-ticketed out of the U.S. when you have a travel office here in our country?' We keep hearing from the airline reps, 'You can't do that.' Well, yes, you can."

As Wal-Mart's team worked with suppliers to help change the ticketing and payment structure, they also moved to consolidate supplier relationships—replacing many contracts and contacts with the minimum number possible.

"One of the things that we found as we rolled this out internationally is that we had multiple contracts with many of the air carriers, hotel chains and rental car companies," he said. "For example, there were 11 American Airlines contracts out there. I think there were five or six Delta contracts, along with several Northwest and several Cathay Pacific. We've consolidated each of those contracts under one umbrella, so we gain control over our spend. It's no longer fragmented and provides us one contract per supplier, efficiency of scale and the ability to effectively negotiate with each supplier. One of the great challenges we've had is getting suppliers to understand what operating globally really means. For example, at the airlines it means we only want to talk to one representative about the contract. If we have a question or go to a new country, we don't want to deal with the local office or the marketing person in that country. We want the global airline representative to handle all of that for us and to make it transparent and seamless. With all of our major suppliers, we have it now. Now, it's a matter of getting the low-cost and regional carriers to understand this philosophy—that even though our offices are in Canada or Mexico or the U.K. or China or wherever, contracts are all centrally negotiated from our home office in the United States."

When contracts come up for expiration, Futch said sustainability efforts among suppliers will factor heavily. "We now have a plan to discuss sustainability efforts with suppliers, which will entail having them detail their sustainability programs," he said. "They will work with Wal-Mart on creating sustainability efforts or they will continue with those already developed."

Futch and his team also facilitated conversations between American Airlines and Wal-Mart's Information Systems Division about radio frequency identification benefits to the carrier's operations. Futch said Wal-Mart has been the leader in using the technology to track product shipments, and RFID briefly was broached by American Airlines CIO Monte Ford during a conversation with Futch several years ago.

"Monte had a relationship with our former CIO here at Wal-Mart and mentioned RFID," Futch said. "The further I got into it, it became evident that American had an appetite for RFID as it related to cargo and maintenance and equipment. We offered Wal-Mart's assistance to discuss our corporate RFID initiatives, and that resulted in Monte bringing 11 members of his information systems team to Bentonville. We spent a full day showing them how Wal-Mart manages its RFID program. Monte and the team went away saying that this is what we have to do. We basically opened the door for them in the relationship area to work with our folks."

Futch pegs RFID to become a technological driver of change in the travel industry. "RFID will have a huge impact on our business in the next few years. The way I envision it, it's going to be from A to Z throughout the entire process—not just cargo, but baggage, tickets and security," Futch said.

Futch said Wal-Mart's travel department will continue its global CTD expansion, noting that Asia, Central America and South America will come on board in future years. Given its robust global expansion, ARC also recently recognized Futch as a vanguard of Corporate Travel Departments. "As an ARC-accredited CTD, Wal-Mart has demonstrated exemplary collaboration and innovation," said ARC president David Collins. "Wal-Mart has maximized value gained from all the ARC tools and services that are in production today, while also serving as a 'prototype' user for new products and services. Their valuable feedback and analysis on conceptual and developing products alike has served to greatly improve ARC's product offerings thus benefiting the entire CTD community. Emblematic of Wal-Mart's corporate travel professionals is their tenacious pursuit of a strategic plan that challenges current thinking for what may be possible in the travel industry. This singular drive is to the benefit of our entire industry."

Futch stressed that the success of the Wal-Mart travel program is indebted not only to strong support from his suppliers, but most importantly his travel team at Wal-Mart. "This is really for my team at Wal-Mart," Futch said in accepting the award. "I just come up with the crazy ideas and they are the ones who make them work. Without this incredible team, none of these accomplishments would have come to fruition in a timely manner."