OP ED: Avoiding Automated Expense 'Land Mines'

Much has been made of the revolutionary changes currently being visited upon all sectors of the travel industry, thanks to computers. Everyone is talking about the Internet, electronic booking, automated quality control products and my personal favorite-automated reimbursement systems. Promises of improved service levels, reduced costs and a revolution in the way we book and manage travel abound, but have we reached the promised land?

Automated reimbursement systems can add immense value to any company. The potential effort required to identify, evaluate and purchase such products can yield a significant hard-dollar savings by reducing the time required to process reimbursement requests by travelers, approvers and auditors. For example, a company that processes 15,000 reimbursements (not just T&E) per year could see a drop in processing fees from approximately $45 to $13.50, and a concomitant drop in processing time from 1 hour and 20 minutes to 15 minutes across the entire submission, approval, audit and payment cycle, for a total savings of $472,500 in the first year.

Other benefits of automated reimbursement systems include:

<LI> Collecting back-end data, which more accurately reflects actual expenditures and is essential in negotiating vendor deals

<LI> Reducing cost inefficiencies, such as lost VAT reclamation, foreign exchange leakage and unused airline tickets; and reducing vendor and traveler error by reconciling booked versus actual spend

<LI> Reducing frustration and tedium for travelers, approvers and auditors by pre-populating reimbursable charges directly to the traveler's reimbursement form, automatically splitting and allocating charges to the appropriate cost centers, highlighting items considered out of policy, allowing requests to proceed directly to payment if they are within policy and eliminating the rekeying of data and coding to the general ledger by finance

Multiple evaluations of these products for clients suggest that in contrast to vendors' marketing enthusiasm, only a few of these products are ready for prime time. While several flexible and robust products are currently ready to integrate into other corporate travel and financial systems, the majority are still a far cry from being off the shelf and ready to go.

Unfortunately, no single product will work for every company, and a concerted effort is required to identify products that are wholly compatible with your existing software, hardware and financial environments. There are a number of key areas with the potential for problems serious enough to derail the successful implementation of an automated reimbursement system. The only way to avoid a catastrophe is to identify these potential land mines:

<LI>A product's ability to successfully integrate with existing or planned software and hardware systems, such as servers, e-mail systems, networks, end-user operating systems and applications, corporate card and centrally billed downloads, financial packages (GL, AP and payroll) and internal proprietary databases

<LI> The method of data distribution (i.e., e-mail, LAN/WAN or intra- or Internet), which can raise data security and integrity issues

<LI> Increased loads on the network, with the associated implications for already burdened servers, networks and clients

<LI>Where the application and data are stored (e.g., server-based applications versus client-server applications), which has implications for the resources required to run the system as well as the number of sites and users that can access the system

<LI> The back-end database products, which collect data for travel, financial and general management reports, and are of three types: open, proprietary and outdated architecture

<H1> </H1>Whether a product has all the functionality and flexibility your reimbursement process requires, such as transaction splitting, cost center allocation, VAT tracking, hotel and car rental detail, booked versus actual spend reconciliation and multiple foreign currency support, to name just a few

<LI> Whether the product is easy to use, which is a direct function of its graphical and logical interfaces

<LI> The vendor's track record and stability, including the number of sites where the products are installed and operating, the number of users and transactions processed in the past year, the number of integrations the vendors have performed with your company's particular mix of software and hardware, and stability in terms of employees and financial resources.

Assessing all these factors requires a careful definition of each company's needs and then a structured review of each vendor's product architecture and capabilities. Information systems cannot be purchased successfully based solely on responses to a written RFP. All that being said, a number of extremely robust and fully functional products already exist, which will yield considerable financial and process benefits for many years to come. While products continue to improve, companies that move forward to reengineer the reimbursement process will gain a head start that translates into a competitive advantage.

<I>Shimon Avish is a senior consultant with the Travel Management Group, a consulting firm in Alexandria, Va.