Profiles In Travel Management: Software Co. Revamps Travel Management Program
Company: Deltek
Headquarters: Herndon, Va.
2007 U.S. Booked Air Volume: $6 million
Software provider Deltek in the second half of 2007 rebooted its loose travel management program by implementing a new policy, developing a preferred supplier program, changing its travel management company, reinvigorating its online booking program and eliminating card delinquency.
The travel management overhaul produced significant results in the first half of 2008, including $2.1 million in air savings, 98 percent preferred agency compliance, a 77 percent online adoption rate and average ticket prices and daily room and car rental rates below industry benchmarks.
When travel manager Karoline Mayr joined the Herndon, Va.-based midmarket enterprise management software company in June 2007, the card program was her primary focus. Many of Deltek's 700 cardholders were not using the cards for T&E, others were charging personal expenses and there was little oversight. In 2007, Diners Club absorbed $250,000 in write-offs related to Deltek's delinquencies. As per the Deltek-Diners contract, employees held individual liability and if payment was more than 180 days late, the account migrated to "serious delinquent status" and was considered bad debt by Diners. Deltek switched to the American Express commercial card and implemented the American Express @ Work reporting tool so that it could audit individual cardholders.
"Before that, the executive team did not have any reporting of any kind about anything that was going on in the travel program or card program," according to Mayr. "Now they receive monthly reports that I create in which I benchmark each department."
As of mid-2008, Deltek reported 17.3 client-held days—the time it takes to pay a bill—while the industry average is 26 days. Deltek uses individual liability with Amex for most cardholders. Company liability is offered for employees with "less than desirable" credit. No accounts are more than 90 days past due.
Mayr also secured senior management, finance and human resources department approval for a new policy that rolled out in September 2007, mandating the use of the preferred agency when not using the booking tool. Within 30 days, nearly all reservations were going through preferred channels, a vast improvement over the previous 55 percent leakage. The new policy also eliminated meal per diems and requires receipts for reimbursement.
Deltek also scrapped its incumbent agency and consolidated in the United States with New York-based Ultramar Travel Management. International offices use Ultramar's GlobalStar Travel Management network partners.
Mayr leveraged the company's $14 million travel spend and procured a preferred supplier program. Mayr signed a preferred agreement with United Airlines, which already had the bulk of Deltek's $6 million air volume.
"When I got there, it was a no-brainer," she said. "Without any effort, they easily get 60 percent of our domestic airfare." In the program's first two quarters, the company achieved $1.4 million in airfare savings.
Mayr also sourced a hotel program using agency support and the RFP Express electronic request-for-proposals tool. The in-house effort was done for one-quarter of the cost of an outsourced initiative. The company now has national contracts with Hilton, Hyatt and Marriott. Deltek doubled the number of hotels in its preferred program and claimed hotel savings of $280,000 for the first half of 2008.
She drove online booking tool use through online seminars, e-mails and private labeling Cliqbook to yield $41,000 in agency fee savings.
Mayr also centralized management and sourcing for all internal and external meetings.