Negotiating favorable deals with airlines and hotel companies is all well and good, but if travelers don't make use of them, such rates and airfares mean nothing more than wasted effort. To ensure its travelers are following policies, booking appropriate choices through proper channels and foregoing non-essential journeys, Hitachi Data Systems has been implementing a pre-trip approval tool in most of its 30-plus country locations and recently began using a third party to monitor hotel bookings. It also replaced more than 15 regional travel and expense policies with an overarching global one.
"You can go negotiate the most fabulous deal, but your biggest opportunity for savings is changing the behavior," said HDS global travel and meetings management director Denise Adleman.
Pre-trip approval is by no means a new concept. Automating it through corporate booking tools or other travel management technology also isn't a very recent development; some early examples date back a good 15 years. But converting into a better practice that not-so-new concept is something many organizations today are exploring.
Effective deployment of an automated pre-trip approval process requires some building blocks (notably a well-defined travel policy) and a thoughtful approach (deciding exactly what to monitor and why).
For example, funneling all trips through that process tends to lead to rubber-stamp approvals, which defeat the purpose.
"Pre-trip approval reflects a general corporate trend toward putting profit and loss responsibility in the hands of line managers," according to information from BCD Travel, Hitachi Data Systems' travel management company and provider of the Trip Authorization tool. "Pre-trip authorization makes managers 100 percent accountable for their travel budgets."
BCD Travel vice president of global business solutions Juan Perez said he's seeing three primary reasons that prompt clients to pursue an automated pre-trip approval system: to modernize a pre-existing manual process, to watch and influence traveler behavior, and to maintain duty of care.
For many, the latter is paramount. "Travel is increasing to places where there are some concerns—whether medical or security—and your people are going there, so let's help them in the planning phase of the trip," Perez said.
For others, a good first step may be to focus on one priority: scrutinizing international travel costs, pushing use of preferred suppliers or perhaps determining which proposed trips aren't necessary.
"Let's not make it too cumbersome," Perez said. "Once you get it out there and are getting feedback, you can modify your authorization program and go for the higher fruit."
As with other similar systems, BCD Travel's point-of-sale Trip Authorization can be configured to alert managers automatically when travelers book a certain type of trip (international, for example) or make an out-of-policy booking. Based on all such criteria determined by the client, the tool uses logic and rules engines to assess whether each specific booking should be emailed onward for approval. Designated managers then can approve or decline proposed trips.
Trip Authorization has been around since 2007 but "interest has begun to escalate because of duty of care and more customers wanting to influence behavior," Perez said.
Globalizing Policy And Approvals
Because HDS has had a policy requiring pre-trip approvals for all international trips, Adleman when joining the company about four years ago had an eye on subsequent auditing and began wondering how to track such written approvals. "We have to have something somewhere, or let's adjust the policy so that it just says 'verbal approval,' " she said. "In my quest to solve this problem and have written approval in an area where we can reference back consistently and globally, we went to BCD and said, 'You have to help us.' "
To improve auditing—with the additional benefit of facilitating standard global use of Trip Authorization—HDS rewrote its global travel and expense policy, supplanting various regional-specific ones. Having so many different policies "made the T&E auditing process much more complicated because the T&E team had to know the contents of all of the policies," Adleman explained. "Our T&E team does a 100 percent audit so auditing from one standard policy is much easier than having to know the nuances for more than 15."
She noted that specific countries can append some additional language, but "only if it is required due to local regulations or employee contracts and/or not addressed in the main section of the policy."
The new global policy took effect on Jan. 1, 2014.
As that was in the works, HDS about two years ago started deploying Trip Authorization in three countries at a time. By this past April, it was part of the pre-trip process in all countries where it was deemed worthwhile (those where at least 100 airline tickets are issued annually). HDS paid BCD Travel one-time implementation fees for each market, and also pays relatively small transaction fees each time it's used. It works for both offline (agent-assisted) and online transactions.
Now, when an HDS traveler books an international trip, breaks policy or meets other specific criteria, his or her line manager automatically receives an email. Those criteria include all non-customer-related trips, whenever travelers decline alternate flights that would have saved at least $100 for domestic trips, whenever trips are booked fewer than seven days in advance, whenever a premium-class airfare is booked but not first authorized and whenever a booked hotel rate exceeds a ceiling (which varies by city). That manager then can approve or deny the booking, or ask for more information. "Depending on the severity of level of noncompliance, it can also go up to their specific executive committee member for approval," Adleman said.
She added that the process has gained wide acceptance, so much so that managers have been asking if they can approve all travel bookings, bar none. "We say no," Adleman said. "We don't want it to be too hard to manage."
A pre-trip approval process runs the risk of managers failing to approve bookings within the ticketing deadline (usually 24 hours), and while Adleman acknowledged such instances do occur, they've been "very rare." (BCD Travel's Perez noted that Trip Authorization can be configured to enable managers to appoint backups should they be unavailable, and to allow the client to choose whether a booking should or shouldn't be ticketed before the 24-hour window expires in cases when a manager does not weigh in.)
The benefits for HDS have been clear. Only accounting for bookings that managers rejected (meaning the traveler then must rebook a presumably cheaper itinerary or not take the trip), the company achieved a 288 percent return on investment (dollars saved versus implementation and per-transaction costs) by deploying Trip Authorization.
But the savings go well beyond that. "Now we are trying to put measures in place to measure our average loss savings for airfares," Adleman said. "We have discussed many times that people catch on quickly when they know they are being monitored."
In other words, traveler behavior is changing, manifested as greater use of preferred suppliers and lower-priced options.
A New Trick For Improving Age-Old Hotel Compliance Woes
Compliance particularly to hotel booking policies is a familiar travel management challenge, and HDS has tackled it through both simple and advanced means. Falling within the former, the company allows exceptions to rules governing booking-channel choice (when travelers book special conference rates, for example) so long as travelers inform BCD Travel. That way, itineraries are properly updated and expense management systems receive proper data.
As with other clients, BCD Travel also will send email reminders to travelers to reserve a hotel room should any multi-day itinerary be booked without one.
In a more recent development, HDS on Aug. 1 began using the services of Windsor Locks, Conn.-based Fare Audit, a corporate airfare auditing company that also offers a hotel component.
Fare Audit takes in a feed from BCD Travel to check if all HDS hotel bookings are at preferred properties, and if so, to ensure negotiated rates were used. If negotiated rates weren't applied, Fare Audit will "take action with the hotel," Adleman said. If the booking isn't at a preferred property, Fare Audit will check for HDS preferred hotels within a specified radius of the originally booked hotel.
"If we have any preferred hotels in that perimeter, the system sends an email to the traveler and gives them policy language, explains which preferreds were found within that radius, at X per night and X savings per night, and then we provide instructions on how to change it," Adleman said. "Most people are accepting of that. Our compliance really is getting much better."
HDS first is using Fare Audit for U.S. and Canadian travelers regardless of where in the world they may be traveling.
Meanwhile, to further optimize purchasing at the point-of-sale, Adleman also has been pushing to improve HDS' online booking adoption. The company's self-booking tools are furnished by Concur in the United States, Canada, the United Kingdom, Australia and New Zealand; Sabre's GetThere in Brazil; Amadeus in France, the Netherlands and the Nordics; and Cytric in Germany.
The company first uses a "softer approach" in each country, which includes heavily promoting the tool preferred in that market and offering training classes. HDS also benchmarks with other BCD Travel customers to track progress.
"If after two or three months—a warm-up period—adoption is not where it should be, then we say to BCD, 'That's it. If a traveler calls you and this is something that could have been booked online, you need to direct them back in a friendly way,' " Adleman said.
Calculating And Sharing Results
Thanks to all these efforts, Hitachi Data Systems has experienced improved travel program metrics. In addition to higher online booking adoption, the company claims dramatically higher usage rates with preferred airlines and hotels, and reduced instances of travelers refusing to use lowest-applicable fares.
The company's travel team shares these and other travel and meetings savings results with senior management through an executive dashboard developed by BCD Travel and deployed in May by HDS.
But making that dashboard as accurate as possible meant buttoning up traveler profiles.
Previously, when sending quarterly reports to the executive committee, Adleman said she would hear complaints like, " 'This person isn't part of my group.' "
In many cases it was simply a matter of the employee not updating the profile, "so we took that away from them and just started doing it," she added. "Frequent-flyer [account information] obviously is important, but that's up to the traveler. We do things specifically on cost-center string, employee ID, etc., and we set up an HR data feed from our system to BCD's system that goes on a regular basis. We also added direct manager contact information that allowed us to implement Trip Authorization and some other tools."
By taking these steps, HDS claims to have improved the accuracy of its reporting by 41 percent.
A separate employee report card lets HDS travelers see how many trips they've taken, how many times they accepted the lowest fare, their total spending in a given period and other metrics.
This report originally appeared in the November 2014 edition of Travel Procurement.