Salesforce.com during the past three years has standardized,
consolidated and simplified both its travel management program and travel
policy and in the process increased compliance, savings and spending
visibility.
Hired three years ago to manage the travel program at what
was then a 10-year-old company, travel procurement veteran Ralph Colunga
applied the "discovery, recovery, delivery" process he used at Cisco,
Oracle and other companies to review and refine existing travel processes.
Within a few months at Salesforce, Colunga asked to manage the company's
corporate card program, then asked that travel and expense be merged into one
team.
[PROFILE_1]Discovery revealed that Salesforce "had four
regionalized programs, four completely separate addendums to T&E policy and
four separate accounting groups to manage different processes," said
global expense and card programs manager Jeff Piatt, who documented processes
in each region, overlaid them and identified reasons for variances. "We
had 15 different agencies," multiple tools and multiple processes, he
said.
Salesforce's online booking tool was used only in the United
States for 40 percent of bookings. Fewer than half of employees used the
American Express corporate card, said Colunga, who now serves as global travel,
meetings and expense senior director.
Standardization Needed
"Before we could get to any rational, meaningful data,
we really had to get all those groups aligned," Piatt said. The goal,
added Colunga, "was to integrate travel and expense into a single team
with a single vision, simplify the processes and policies and really drive the
spend transparency and compliance, as well as user experience."
The team secured the support of the company's CFO to "create
a global process," Piatt said, and went to convince executives in Europe,
Japan and Singapore of program benefits, emphasizing increased compliance and the
ability to reduce operational costs—including transaction fees—and increase
cost-saving opportunities.
"One of the first things we had to do was issue
requests for proposals for a global travel management company and booking tool,"
Piatt explained. In the discovery phase, six agencies were identified as
suppliers. In reality, Colunga added, "15 to 20 different agencies were
being utilized because no one was driving this on the back end and monitoring
what was happening."
At the time, Salesforce employed about 3,200 people. That
figure last year swelled to more than 7,000 and is expected to surpass 10,000
this year. "How do we establish the policies that allow us to manage to
that growth?" Colunga asked, noting that most of the hires are in sales or
support the firm's customers, now numbering 104,000 and growing 6,000 each
quarter. The answer, he said, was "standardization."
With a young employee base, the team identified a need to
shift the employee view of travel decision-making "from a sense of
entitlement to one of empowerment in making the right decisions for the
company," Colunga said.
Source-To-Settle Solution
"My thought process was to create a closed-loop system,
basically source-to-settle, so you know who you should be sourcing with on the
front end and who you're actually utilizing and what your spend is on the back
end," Colunga continued.
Too often, he added, travel executives "focus on the
front-end portion of this experience—the type of bookings and how they occur,
online or through an agency—negotiations with suppliers, etc. Typically, you
then toss it all over the fence to the expense teams to deal with the
aftermath."
Buyers often focus on agency data, "which is just one
portion of the story," Colunga said. "There's also card and expense
spend, which tells you who's not even using your card, not utilizing preferred
suppliers and not even within your program. Ultimately, expense spend is your
most accurate spend and what ties back to your general ledger. That was our rationale
behind how we combine these groups to create the closed-end, source-to-settle"
program.
Travel, payment and expense functions were integrated into a
single team. Regional travel policies were consolidated to a single global
policy of less than 10 pages, and Colunga hopes to truncate it to no more than
two. T&E policy simplification was designed to drive compliance.
Within four months, Salesforce bid, selected and implemented
in 24 countries BCD Travel as its global TMC and Concur for online booking and
expense management.
Automated Audits
A communication plan helped to improve policy compliance and
program usage, but the new team also built automated audit flags into the
expense system. "We were auditing 100 percent of expense reports through
the Concur audit program, but more flags" on policy violations appear
within the system, Colunga said. The global integrated travel and expense
platform made it feasible for Piatt to add two additional layers of auditing. A
third-party auditor verified all receipts and policy compliance. Within two
months, those audits identified $41,500 in non-allowable spending. Within six
months, the figure had grown to $200,000.
In a third audit layer, the company uses software to run
analytics and random audits of expenses or categories "that tended to be
problematic," such as mileage, Piatt added. The team uses algorithms to
identify "duplicate submissions and the top 25 submitters of $20 to $24.99
expenditures [below the $25 threshold requiring receipts]. We found someone who
over the course of a year submitted $24.99 75 times."
The number of expense reports in the year ending Jan. 31,
2011, grew to more than 64,000, up from 47,000 a year earlier and 29,000 two
years prior, Piatt said. Spending on air travel, car rental and hotel stays in
two years likewise rose by double- or triple-digit percentages.
Once word of the expense crackdown spread, "our
employees became part of our team, further spreading the word and assisting"
with compliance, Piatt said. Salesforce uses its Chatter social media tool for
internal communications and "watched Chatter each morning" as
travelers answered questions about travel and expense.
Chatter "is an enabler that absolutely tears down any
walls and forces transparency," Colunga said. "Anyone can ask any
question, so it forces us to ask, 'Is this really an issue or is someone just
venting?' "
The company also has "placed a lot of attention on
training." Instead of worrying about the 3,200 employees—of whom 80
percent were compliant—the travel team focused on the new hires. "If we
focus on teaching people the right way to travel the minute they get in the
door, they don't develop bad habits," Colunga said.
The travel team also embraced administrative assistants with
a quarterly newsletter that emphasized policies and practices around travel,
expense and meetings and events, as well as reminders and tips. "That
helped us deliver consistent messaging and allowed them to be advocates or
conduits to deliver the messaging for us."
Enhanced Data Visibility
Since January 2010, the company's online booking penetration
rose to a global average of 70 percent of all eligible transactions. Regional
TMC transaction fees were reduced by 10 percent to as much as 40 percent, with
a global fee that averaged 28 percent less last year than before consolidation.
[PULL_1]Salesforce in 2011 captured 87 percent of T&E spending
on its American Express corporate card, up from 49 percent in 2010, and boosted
year-over-year spending on the card by 93 percent. The company increased by 70
percent to 5,000 the number of Amex cards issued while reducing outstanding
cardholder balances and late payments. To maximize its rebate and minimize any "overage
charges," the company sent messages "on a monthly basis to
individuals who were 30, 60, 90 or approaching 120 days late," Colunga
said. "We reduced our client held days from 16 days to 12 days."
To encourage card usage, the travel team provided to senior
management summary decks of top non-card users. "Not only does the card
give us a whole separate level of data for audit, analysis and compliance
purposes, but it makes your consolidated reporting and data that much better
when you can use all the card spend reports knowing that you have 85 percent or
90 percent of the spend on the card," Colunga said.
The Salesforce travel team received the Association of
Corporate Travel Executives/MasterCard Worldwide Excellence Award for Corporate
Travel Spend for "going above and beyond to come up with an innovation
solution to approach a challenge," said MasterCard's Leigh Bochicchio. An
industry committee reviewed the achievements of nine travel teams before
tapping Salesforce.
This report
originally appeared in the February 2012 issue of Travel Procurement.