Profiles InTravel Management: SonyBMG Merger Spurs Travel Upgrade

Headquarters: New York
U.S. booked air volume: $20 million

Maintaining a policy-compliant travel program among a traveling population that notoriously is difficult to contain—artists, artist management and entertainment executives—is the daily challenge facing Hal Rudy, senior director of travel for SonyBMG Music Entertainment, the music and entertainment conglomerate formed last year by a merger under parent company Bertelsmann Inc. Having rebid the newly merged company's agency services, reformulated corporate travel policy and rolled out an online booking tool during the past few months, Rudy said the SonyBMG travel team is focused on crafting a back-end credit card reconciliation tool and building the department's reputation to enhance supplier relationships and ensure smoother service for its demanding travelers.

"In these past 30 days, I feel like I had four phases of life," said Rudy, who began reporting into procurement upon completion of the merger. "The first phase, in mid-June, was migrating a portion of our business offsite to a reservation center, then moving to a new agency, moving to a new building and then rolling out the online tool."

SonyBMG's recent agency selection process was carried out during a time of major corporate restructuring and transition, said Rudy. "That was an education I had to make to my senior-level finance people. When we chose Amex, Amex wasn't the cheapest. I said, 'I'm not going out there to find the cheapest, I'm going out there to find what's best for the needs of our travelers,' " he said. "I even did the due diligence of bringing Travelocity Business into the bid. They said there'd be agents in a center but they wouldn't be dedicated to the account. That's my hot button."

Rudy considers SonyBMG to be virtually consolidated with American Express in the United States, but also maintains a relationship with a boutique agency to handle ultra-V.I.P. travel. Customer service, said Rudy, even above cost, is paramount at SonyBMG, where travelers include everyone from sales reps to television contest winners to platinum-selling musicians and their entourages. "I'm a big believer in customer service. Things are guaranteed to go wrong, how you deal with it is much more important."

Part of ensuring high levels of customer service, said Rudy, is maintaining superior supplier relationships, which can be difficult when half of its corporate travelers are not employees and have specific supplier preferences that may not jibe with company policy.

"Trying to meet the goals of your airline agreements is a challenge, but it really goes back to having the airlines understand the situation we're in as an entertainment company," Rudy said. "Seventy-five percent of our total air is under contract and I've been able to meet all our agreements in our terms. We always try to take it the next step, so if we do fall short, we do some cross-marketing." Rudy said that SonyBMG provides Continental Airlines with some programming for its inflight audio channels in an effort to enhance the mutually beneficial relationship.

"We just got a call from one of our preferred carriers asking us to do some promotional marketing with them, where you can do a contest with them and fly to New York to see a concert. We'd provide the concert tickets and they'd provide the airfare and in return we provide the exposure through radio advertising or print," he said, adding that such agreements, whereby SonyBMG becomes, in a sense, a service or product provider to its supplier, comes into play when the company needs favors for complicated, last-minute requests.

"We have a lot of last-minute travel—contest winners, artists. That's when your preferred carriers come in and can help you clear space on a sold-out flight," Rudy said. "The relationship also kicks in for other unique needs. In the past, for instance, when some of our artists or 'American Idol' winners would go to the airport, they'd miss their flights because people were mobbing them. Now we have to provide security guards and these security guards don't fly, so they have to get gate passes. That's no easy feat, and our preferred suppliers will arrange for that to happen."

Restructuring travel policy has helped Rudy and the SonyBMG travel group confront the challenges of driving compliance and meeting supplier agreements. "After the merger, we took the best of both companies for the travel policy and just incorporated them into the online booking tool," Rudy said, noting that the merged company chose American Express' CTO—a GetThere-powered online booking system already in use at Sony—and is aiming to book 50 percent of eligible travel online by year-end. "Driving compliance really came down to understanding why they book outside the policy. Once we really looked at it, we built some unique exception codes into the drop-down menu that a traveler or admin uses." Rudy customized the booking tool to include reason codes, such as "traveling with an artist" or "negotiated into artist's employment contract."

Expense management, particularly charge card reconciliation, is another ongoing issue Rudy faces as a result of having such a large and demanding non-employee traveler base. SonyBMG's travel team is developing a back-end reconciliation product that will automatically match non-employee payment and expense records with specific passenger name record and trip information.

"With entertainment travel, change can be costly. Half of our travelers are employees and the other half, non-employees," Rudy said. "It's really about getting vendors to understand our business and take the cookie cutter out of the picture."

Rudy, a former global sales executive at United Airlines, said the move into a more procurement-based role posed some challenges. "When I was a Bertelsmann employee, I reported directly to the president of the company," he said. As a SonyBMG employee, "The only change is having an open mind. I've had to convey to the procurement professional on our team, 'Do not compare this to when you're bidding out computers or copiers.' I've invited him to some of our airline meetings so he can see, first hand, what negotiating for travel is all about."