Profiles In Travel Management: Co. Scans For Multinational Savings
Company: OSI Systems
Headquarters: Hawthorne, Calif.
Estimated 2009 T&E volume: $10 million
Security technology manufacturer OSI Systems this year completed a 15-country travel management company consolidation that offers greater control over its growing international travel spending and higher compliance and arms the company with a more accurate picture of its total travel expenditure, enabling it to procure broader preferred supplier agreements.
In July, under the leadership of global travel manager Frank Dolce, OSI finished the implementation of Carlson Wagonit Travel in its remaining countries, bringing all 15 markets under one TMC roof and capping a project that began with a fall 2008 agency switchover in Canada, the United Kingdom and the United States. Other countries that came later under the consolidation include China, France, Germany and Singapore.
Before the implementation, OSI Systems used Woburn, Mass.-based Travizon in the United States, its partner agencies in the United Kingdom and smaller affiliated agencies in other countries.
With that fragmentation, compiling accurate data was an issue. "There was a lot of bleed," said Dolce, who also is responsible for OSI's corporate card and expense reporting programs. "We had whole offices that didn't use the local designated agencies."
The TMC consolidation process took about a year, with the mega agencies the main contenders.
OSI's estimated $10 million in total travel spending this year is about 30 percent less than its 2008 travel volume. Company directives to highly restrict internal travel and raise use of an automated pre-trip approval process pushed the decline in volume, aided by the rollout of a new online booking tool.
OSI, a designer and manufacturer of security and inspection systems, including airport security X-ray machines and metal detectors, for industries including healthcare and defense, also limited travel spending through a pre-existing all-coach-class air travel policy for its 3,500 employees, 1,400 of whom are travelers.
At the same time that the company was implementing CWT, it also deployed Cliqbook as its preferred self-booking tool in the United States, replacing ResX. OSI also uses Cliqbook in the United Kingdom, and its Australian travelers use CWT Horizon. In China, the company uses a local online booking tool from TravelSky.
OSI for years had some pre-trip approval , but now all U.S. and U.K. trips—which make up 66 percent and 20 percent of OSI's travel, respectively—go through an approval process, as every booking triggers a notification and subsequent review by the traveler's manager.
With the improved oversight and control, preferred supplier compliance and online adoption have risen considerably. Sixty-two percent of U.S. airline tickets are booked online, according to Dolce. In the United Kingdom, starting from a much lower adoption level, the number of airline tickets booked online has surpassed 20 percent.
One area that still hinders the selection of a single preferred airline is the Hawthorne, Calif.-based company's disparate travel patterns. Its three top citypairs are Los Angeles-London, Seattle-London and Los Angeles-Singapore.
Equipped with consolidated reports for the first time, Dolce plans to reconfigure preferred agreements to encompass the whole OSI travel program.
"I never felt that I had good enough data before to interest a worldwide airline deal with a specific carrier or an alliance deal," Dolce said. "I'm hopeful that when I get a good chunk of numbers under my belt, we'll be able to go down that road and get something like that."
Dolce joined the company in 2003. "The travel program is much different now than it was 18 months ago. It's much more sophisticated with better reporting, and consequently we are getting a lot more visibility of what the other locations are spending."
Another target for Dolce is reducing hotel compliance leakage. Current OSI travel policy allows travelers to use their distributor partners' or customers' hotel rates.
"We're cutting off our noses to spite our faces," Dolce said. "We're saving money by booking with a customer or distributor, which is great, but we don't know where our people are, and there are a lot of room nights out there that we can't use when it comes time to work with a hotel or hotel chain."