Mandates have arrived for corporate online travel. After years of doing a soft sell—Power Point demonstrations, video pitches by senior executives, special training sessions, incentives to encourage travel planners and first adopters to book online—U.S. corporations are requiring their travelers to use online corporate travel systems.
Part of it is the evolution of these systems. What had been seen as a promising but pioneering technology is now widely recognized as an integral part of successful travel management strategy, according to Jeff Palmer, chief operating officer of GetThere, a Sabre company, whose merger with Sabre BTS means it has more than 500 companies using its corporate travel procurement systems. A lot of the kinks have been worked out of the systems, general travel sites like Expedia and Travelocity have helped train customers to research and buy travel online and, increasingly, consumers are turning to e-commerce.
But the big reason is economics. Oracle estimates that it will save $16 million this year and more than $100 million over the next five years by mandating use of e-Travel‘s corporate travel technology. Microsoft just launched its new online corporate travel booking system, retiring the AXI tool it had been using and switching to Highwire’s Travelport. Upon making the switch it almost immediately began mandating its use. Its adoption rate increased from 20% to 63%. American Management Systems (AMS), an international business and information technology company, which was already enjoying a 65% adoption rate just issued a mandate. So did Xerox, which has 24,000 employees who travel.
The motivation to mandate is powerful. Even before its mandate, AMS expected to save $1 million on its annual travel budget and reduce its corporate travel department from 22 to 10. Microsoft, whose mandate was complete reversal—the company had always been opposed to a mandate—is seeing savings of up to 50% in fulfillment costs—that is, the operational costs of booking and issuing tickets—and an average 15% saving on ticket prices.
While mandates have clearly arrived, they are not draconian. Generally speaking, there is no “or else.” Use of online corporate travel systems is required—but not for all travel. International travel involves more complicated faring, for example, so mandates generally don’t cover international trips. Still, some teeth are beginning to show. Some companies show what it cost to make a booking on travel reports so travelers can see that booking by telephone agent costs double or triple an online booking. Such not-so-subtle messages are great motivators.
Also, migrating to online travel systems is not occurring in a vacuum. At Oracle, for example, chief financial officer Jeff Henley says that the company has done a number of things over the past four years to shift employees to doing tasks such as expense reporting, purchase requisitions and benefits online. At Microsoft, virtually all employee systems are online, according to Zoe-Ann Bartlett, Microsoft’s director of global travel and relocation. Travel was the one exception. Additionally, Microsoft had been conducting a company-wide campaign about how the company could manage its business more smartly. Whenever any corporation looks at its costs, T&E are at the forefront, says Bartlett.
Companies do work to sell the programs to employees. Oracle ran a full-blown marketing campaign to increase awareness of its e-Traveler tool. The campaign included e-mails, Webcasts hosted by senior officers followed by live call-in sessions, flyers tucked into charge card statements and posters. Oracle’s corporate travel agency was told to instruct employees calling in to book travel to use e-Traveler.
Microsoft was similarly high profile and it’s clearly important for a successful transition. Bartlett says that even at a technology company like Microsoft, shifting employees online takes work,.
“It’s not something travelers naturally gravitated to,” she says. “Travelers take a bit of a push.” She notes that although usage began to climb with the introduction of Highwire’s Travelport (the newer system was more seamless and easier for travelers to use), it wasn’t until the mandate was issued—and she describes that mandate as a “soft conversation”—that usage really spiked. Still, the company issued the mandate only after it saw increases in usage.
“We did some auditing and found that our fares were much lower than when people went out and shopped around, so with that audit process and the savings and we haven’t had any resistance to the tool,” she says.
It also doesn’t hurt that Microsoft employees are also shareholders—they’re interested in fattening the company’s bottom line.
Still, mindset helps. Cheryl Hutchison, global travel manager for AMS, points out that even before AMS issued its mandate—and she, too, soft-pedals the word mandate a bit, saying that “it’s definitely not an edict”—travelers were using the online booking tool, provided by GetThere.
“Right off the bat we were at very high adoption rates. We came out the door at about 20% usage,” she says. “We’re very tech savvy with very young, smart people, so it’s no shock that there would be good adoption.”
AMS also worked hard at introducing the system and getting employee input. It sent out press releases and newsletters, survey travelers to find out what they wanted in the system and got feedback on the system. Its travel site, on the company intranet, has an e-mail link and a phone number so employees can ask questions and ask for assistance while booking.