Today, government defense contractor Lockheed Martin plans to begin its transition from legacy travel management company Carlson Wagonlit Travel to employing Internet-based TMC Travelocity Business to manage its travel program. That makes Lockheed—the fourth-largest buyer on BTN's 2006 Corporate Travel 100 list, with just more than $213 million in U.S. booked air volume last year—one of the first large companies to undergo a full multinational consolidation with an ITMC and by far the largest yet to do so.
Travelocity Business began vying for the Bethesda, Md.-based company's business more than one year ago, and in doing so created technological capabilities specified by Lockheed Martin director of corporate travel services Richard Wooten, whose mantra is "automate, automate, automate." A strong focus on automation is not surprising in such a large, multinational program as Lockheed Martin's, which caters to roughly 80,000 travelers and is subject to special regulations as a government contractor.
"The online players have tended to lean towards automation in devising their solutions and have worked harder at developing reporting and negotiating tools that require less human analysis," according to Tom Wilkinson, president of TRW Travel Consulting in Pennington, N.J. "The larger and more traditional TMCs have been doing the same thing, though the ITMCs already have a lot of development, ideas, energy and horsepower going into these analytical tools and that's definitely going to continue to be a more important battleground, because it's at that level that they really can compete with the big guys."
A handful of other large multinational companies have used Expedia Corporate Travel and Orbitz for Business, though to a limited degree. BTN's annual Corporate Travel 100—which this year listed corporations with a minimum 2005 expenditure of $39 million in U.S. booked air volume—showed Orbitz for Business last year managed 15 percent of travel spending for financial services firm Fidelity, which ranked 71st with $50 million in spending. McKesson, a healthcare services company that was the 53rd-biggest U.S. booked air spender with $65.6 million in in 2005, consolidated domestic operations with Travelocity Business last year.
After eight years with a mega travel management company—first Sato Travel, which was acquired by Navigant, which in turn was bought by Carlson Wagonlit Travel—and its TMC contract on the verge of expiration, Lockheed's Wooten began a request-for-proposals process that included traditional and Internet-based TMCs. "Through the bid process, we brought in all the competitors and then we graded the criteria and began our down-select," Wooten said. "We down-selected to three and did the site visits and kicked the tires, so to speak, to really understand whether they could truly match our needs and we ended up with the selection of Travelocity Business. I really looked at them as a TMC and how well they could fit our requirements."
Take, for example, Lockheed's need for its TMC to ensure that travelers conform to the Fly America Act, which states that an employee traveling on federal government business must fly on a U.S carrier unless there is not a U.S. carrier that serves that route. Travelocity Business already provided technology so that another client, the American Bar Association, could ensure compliance with the Fly America Act, but Lockheed Martin's interest in the ITMC pushed Travelocity to further automate the capability, per Wooten's request. "We put technology in place that analyzes trips to see whether they are compliant and if it is compliant, we document that," said Ellen Keszler, president of Travelocity Business' parent company, Sabre Corporate Solutions. "If we think the trip is noncompliant, we auto-generate an e-mail to the traveler to call us and we'll walk through it with them. There is no manual intervention required. This is a big issue, because otherwise travelers had to document it themselves and it is fairly complex."
Another challenge Lockheed presented was streamlining travel for job applicants, which historically was an offline transaction for the company. "One of the issues around an applicant booking online is that you need a profile and login, but you don't want it to exist for a long period of time or there is a fraud opportunity," Keszler said. "We created a way for Lockheed to let their job applicants book online and then as soon as the reservation is made, the login and password is disabled so they can't get into the site again."
This past April, Travelocity Business unveiled two automated tools aimed at ensuring travelers book the correct negotiated hotel rates
(BTNonline, April 24). The first functionality, known as the hotel audit tool, confirms that negotiated hotel rates with suppliers appear correctly in global distribution systems. The second capability, called the "squatter" tool, crosschecks bookings against negotiated rates within GDSs to better regulate the use of approved rates. The tools also can benchmark data against other rates and perform scheduled, periodic audits. Both functionalities were created specifically for Lockheed Martin. "By doing that, we can help Lockheed drive higher compliance with their hotel program and more market share to their preferred suppliers," Keszler said.
Similarly, Travelocity Business adhered to Wooten's automation requests through hands-off technology that guides travelers in making decisions compliant with policy, such as automatically generating an e-mail every time a traveler refunds a ticket or if a traveler books offline as opposed to online. It also integrated with Lockheed's IBM-developed expense management system and created a customer relationship management system that tracks customer service issues and keeps the traveler informed of any changes.
"We have done a lot of things for Lockheed as part of the implementation process, but this is a long-term relationship and their business needs will change," Keszler said. "One of the things that we're committed to is building new capabilities for them as needed. They have some great ideas with business programs that we can help them solve. It's quite likely that some of our clients have some of those problems and we'll be able to use those solutions." Indeed, the technology created for Lockheed Martin now is available to all Travelocity Business customers.
In 2005, Business Travel News recognized Wooten as Travel Manager of the Year for pushing his travel management company partners to implement real-time pre-trip approvals and alerts and unused-ticket exchange technology
(BTN, Sept. 5, 2005).Given Travelocity Business' roots as an online travel management company, technological innovation may not come as a surprise. Instead, some industry experts are concerned about whether Internet-based TMCs have the multinational service operations required to support a global travel program. The bulk of Lockheed Martin's travel takes place within the United States and United Kingdom, as well as in Canada, Mexico and Asia/Pacific. Travelocity Business provides full support in the United States and the United Kingdom. In Canada, Travelocity Business gets additional support through a fulfillment partnership with HRG. "Asia/Pacific is fairly light for us, but we do have some employees there, typically expatriates, and we want to offer the service and access to our discounts, so we definitely want the agency there," Wooten said. By early third quarter 2007, Travelocity Business plans to further expand its operations in the Asia/Pacific region. "We're in the process of implementing our technology processes and integrated data consolidation for Asia/Pacific at Zuji.com, our Asia/Pacific operations," said Keszler.
Until then, Lockheed will continue to use BCD Travel's offices in the region and Travelocity Business will support the company in other regions across Europe through its call center in the United Kingdom.
"We will take calls across Europe in the U.K. and we will support them there or through one of our wholly owned offices in Europe, which will do ticketing for countries that use the euro," Sabre's Keszler said.
Wooten expected the agency transition to be seamless, as Lockheed already uses the GetThere booking tool. Lockheed is the largest corporation to adopt GetThere's new Travelocity-based user interface. The company's online adoption rate stands at 86 percent, a satisfactory figure Wooten hopes to improve as implementation begins across Lockheed's locations in the United States, United Kingdom, Canada, Europe, and in six months, Asia/Pacific.
"Travelocity is a well-known name and I think the travelers will feel comfortable booking online," Wooten said. "We're really putting a lot of effort up front to make sure we have everything coordinated with our internal departments and anything that's unique. We've really been working with Travelocity to make sure they have that up front; to train the agents and make sure that their systems will support it. That's really the key—all the up-front preparation to make everything as smooth as possible."