End-To-End Pilot Co. Gains

The European sales and distribution division of medical devices company Boston Scientific Corp., based in Nanterre, France, has reaped benefits from being one of the first businesses to implement an integrated self-booking tool and expense management solution.

This summer, BSC Europe piloted the use of corporate travel technology provider KDS's offerings multinationally for both online booking and expense management. BSC Europe finance director Volker Spichal said that using the integrated tool has created numerous synergies and process efficiencies. These include a single personnel hierarchy for workflow and approval; better visibility of trip spending for travelers and travel approvers alike; greater independence in data collection; and, with the launch earlier this month of version 6.0 of KDS Corporate, a clear audit trail from trip start to finish.

Introducing an integrated system generates savings through lower fares from the self-booking tool element, which finances the expense management element, which has a slower payback, Spichal said. The need to log on to KDS to make expense reports draws travelers into using the booking tool.

BSC Europe's extensive feedback has shaped version 6.0 of KDS Corporate, which integrates the two elements much more closely, especially in terms of providing an audit trail. Ironically, the firm will not be among the first KDS customers to benefit. Version 6.0 will be rolled out to new clients next month but to existing clients in January 2007.

The concept of automated end-to-end travel solutions has been much hyped since online booking and expense management tools made their debuts in the mid-1990s. SAP, which long has offered an expense product as part of its much larger enterprise resource planning platform, went into partnership with Amadeus shortly afterward, but never met with widespread success. Recently, however, technology companies have started to pursue the synergies once again. KDS, a booking tool provider, launched its expense management package in 2004, and in January 2006 the Redmond, Wash., expense management tool provider Concur bought booking tool and expense solution provider Outtask.

One advantage BSC Europe had when it first contemplated implementing an integrated solution in 2004 was that it had neither a booking tool nor automated expense reporting. Its U.S. parent company was using an IBM expense package that was inappropriate for the European market. The company was growing fast and so was its travel expenditure. In fiscal 2004-05, travel and entertainment cost an estimated $20 million and BSC Europe's finance department processed 9,000 expense reports manually. Pre-trip approval also involved a cumbersome manual process.

With clear pressures to introduce better compliance, Spichal and his team saw online booking and expense reporting as obvious solutions. A package that integrated these two tasks would be even better. "We decided that if we were going to scope out a program and make changes, we should do it just once," he said.

Finding the resources to implement the technology—especially within the busy BSC Europe IT department—was a major challenge, but the answer lay in finding an application service provider that hosted a solution online. "Not having to buy any hardware gave us the green light to move forward, with the driver being that the savings we made would pay for our fee to the ASP provider," said Spichal. BSC Europe's IT department provided a file transfer protocol bridge to open the flow of data between the company and KDS.

BSC Europe selected KDS in July 2005 and after piloting the booking and expense tools in November 2005 and April 2006, respectively, went live with the integrated solution in France and Benelux in May. The rest of Europe will follow by March 2007.

Spichal was able to assemble a single project team—consisting of BSC Europe finance, IT and human resources personnel plus KDS and the Carlson Wagonlit Travel Solutions Group—and to devise a coordinated change management strategy, such as a unified communications plan.

The biggest time-saver in this respect was having only one personnel hierarchy that laid out policy entitlements for each employee and the workflow for line manager approval of trips and expenses. "We have unique employee numbers for every employee we could flow through the system," said Spichal. "You only have to do the exercise once. The direct manager who approves the reason for a trip is generally the same one who approves the expenses."

Spichal added that there is a "constant flow of data back and forth" within the system, providing much greater visibility for travelers and managers. Travelers, for example, can see debits in their inbox the day after they are made, which is usually the day after booking. This allows them to build a better understanding of the total cost of their trip from the time they book it.

The other advantage for travelers is that filing expense claims becomes a rolling process, rather than a cyclical one based on the monthly arrival of their American Express card statement. However, Spichal said travelers would need more communication before they change their approach.

Managers, meanwhile, have better insight into travelers' compliance patterns. This starts with the flagging of policy exceptions at time of booking and flows to the expense report. Spichal said managers also can identify more readily traveler behavior that does not break any rules but is nevertheless cost-inefficient. An example is travelers buying flexible fares when they could have bought cheaper restricted fares.

When it embarked upon the project, BSC Europe sought to improve the auditing of trips, especially in light of Sarbanes-Oxley regulation. Spichal, however, still has found inconsistencies between booked data and data in the reporting tool. This was attributable partly to bookings through Carlson Wagonlit not appearing in travelers' inboxes and partly to an inconsistent flow of data into the system from the Amex card. Productivity is lost as travelers need to re-enter the travel data lost in the transaction flow in the expense report.

Spichal, though, is confident that version 6.0 of KDS Corporate will fix the problem, as it ties up the data from bookings and the Amex card to complete the transaction trail. "We will now be able to audit just once online. Our internal audit team in Boston can audit online from there. We won't need to give them a room in our basement here," he quipped.

The integration of the travel management company and card feeds also means the KDS system effectively becomes a data warehouse for BSC Europe, giving it more autonomy in its data management.

Further improvements that BSC Europe would like to see include being able to flow travelers' entire itineraries into Microsoft Outlook calendars. KDS hopes this will be possible when Outlook 2007 is released next year. Another is incorporating travelers' annual travel budgets into the tool for better visibility of their budget status during the pre-travel approval process.

Spichal would like more progress on rail reservations—a continuing problem with all booking tools. He said KDS's rail offering "works brilliantly in France" but not in Belgium, where the national rail network is not on the system. Booking Eurostar also has proved problematic.

With the project still in its early stages, an objective assessment of the return on BSC Europe's investment in an integrated solution is not yet possible, but Spichal is encouraged greatly by what he has seen: an integrated solution that bridges booking data and expense report data. However, he said, "It is more difficult to present the business case internally if you already have a booking or expense tool. Companies would have to ask themselves how much in extra savings they could generate."