June 2008 - Effectively managing travel budgets amid rapid corporate expansion is no easy task. Managers want their people on the road and selling more, and they want them to be comfortable and productive. Particularly in the software business, talent retention can be challenging, so applying strict travel policy mandates-leaving no wiggle room for exceptions-often is not the preferred means of cost control.
Having experienced double-digit income growth for the past six years, software company Autodesk finds itself in such a scenario and now strives to more carefully monitor and manage its business travel spending. "Even though we have had meteoric growth over the past several years, like others, we are also influenced by vendors, suppliers and clients," said senior manager of global travel services Bruce Finch. "As the economy has shifted, so has our focus."
Recognizing that mature managed travel programs can reach a point where vendor negotiations alone no longer yield incremental savings, Autodesk has turned its attention to traveler behavior. To scrutinize that, as well as the effectiveness of "soft mandates," Autodesk-along with its U.S.-based travel management company, Travizon-deployed a reporting system that collects and merges global travel data from multiple travel agencies, enabling managers and business owners to address their travel budgets as they see fit. While real-time reporting ensures compliance to risk management policies and uncovers savings opportunities before the company pays for travel bookings, ad hoc reports and a set of six standard monthly reports provide a wealth of travel data to help examine traveler tendencies, identify areas for optimization and benchmark both internally and externally.
| • |
Organization:
San Rafael, Calif.-based Autodesk, a design software manufacturer with 7,500 employees spread across 118 offices in 38 countries and annual sales of approximately $2.5 billion |
| |
| • |
Volume:
$94 million in global travel and entertainment expenditures, including $22 million in U.S. and Canadian air travel costs |
| |
| • |
Challenge:
Uncover cost-saving opportunities amid rapid corporate growth, while maintaining a "soft mandate" environment |
| |
| • |
Approach:
Use U.S. travel management company Travizon to aggregate global travel data from multiple travel agencies, create reporting technology and empower managers with information |
| |
| • |
Solution:
Extensive real-time, monthly and ad-hoc management reports built around cost centers that identify traveler purchasing habits, present lower-cost ticketing options and establish benchmarks |
|
|
"Where we have never heard from some of them before, we are now hearing from senior managers that they are looking for us to help them understand what they can be doing in their own business units so they can drive behavior and cut costs," Finch said. "We have become the trusted business partner for these managers to explain not what the reports mean but what they can do to influence behavior in order to save money. Once educated, these folks really are self-sufficient in terms of looking at the report data."
For example, an Autodesk policy requires travelers to use coach class when booking airline tickets, but in the soft-mandate environment, managers can make exceptions and allow business class when deemed appropriate. "We capture the variance between those two so managers can look and say, 'Aha, if I really want to turn the pain dial up, here is my opportunity for cost savings,' " Finch explained. "If we can provide enough information to managers, eventually they will take a look at the report and locate problem employees--the ones who are spending over $1,000 a ticket more than they have to be."
Other reports relate to advance purchasing, traveler tracking and hotel costs. They are all based on cost centers and designed to provide insight into traveler behavior. Once employees understand that "visibility factor," Finch said, "they tend to do the right thing."
The key was first building a system to aggregate data from around the globe. Autodesk uses multiple travel management companies (one each for Europe, North America and Asia-Pacific), having chosen them for their regional expertise and ability to deliver consistent data.
Autodesk's U.S.-based TMC, Travizon, serves as the data consolidator. Using its Glodac system, Travizon can "work with the other travel agencies to get the data, both pre-trip and post-ticket, from their back-office accounting system, mid-office quality control system and even their front-office global distribution system," said Travizon chief technology officer Lehi Mills. "There really is a minimum set of data elements that you need to be able to produce analytical reporting that is worthwhile."
|
"We have become the trusted business partner for these managers to explain not what the reports mean but what they can do to influence behavior in order to save money."
— Bruce Finch, Autodesk senior manager of global travel services
|
|
|
Once global data is collected and normalized, it must be presented in an understandable format. The six travel reports Autodesk cost center managers and finance business partners receive monthly are:
A fairly standard executive summary, showing average ticket price, cost per mile, number of tickets issued, refunds, etc.
A ticket detail report that shows, by cost center, employee names, dates of travel, city pairs traveled, class of service, ticket costs and number of days in advance travel was booked. "As you peruse these documents, you know who is booking outside of policy (less than seven days in advance)," Finch explained.
A lost savings report--"virtually the same" as the ticket detail report--that also calculates the variance between fares that were booked and other fares available, whether the traveler used agent assistance or Autodesk's self-booking tool. " 'I can see that consistently Bruce never takes the lowest fare offered,' " Finch said, mimicking how a manager might react when reading this report. " 'Hmm, I wonder why.' That is why we are putting information into the hands of the manager, so they can manage their own employees and their own budgets."
A hotel report that includes the name of the hotel, cost per night and
number of nights per stay, among other information. "You can bet your bottom dollar that they are looking at who is staying at the Four Seasons and The Ritz," Finch quipped.
A report showing who booked first or business class tickets.
A top traveler report, by volume.
Including ad hoc reports, the Autodesk travel department and Travizon email more than 400 reports each month. It began with the company's CEO, expanded to senior vice presidents and vice presidents, then to their direct reports and "each quarter we went another level down," Finch said. "We then finally opened it up to any manager who wanted this. So we have managers that are 20 levels down in the food chain who said, 'Look, I have five people who travel consistently, and I really would like to get some reports.' "
|
"There really is a minimum set of data elements that you need to be able to produce analytical reporting that is worthwhile."
— Lehi Mills, Travizon chief technology officer
|
|
|
The system also integrates information around the world as appropriate. "Say I oversee the purchasing division on a global basis, and I have 20 cost centers around the world," Finch said. "I get the six standard reports and each one has data from all those cost centers. I can ask for it in any particular currency, and it can be normalized for me in a way that makes sense in my budget.
"However, some managers oversee different divisions," Finch continued. "So instead of being siloed, they actually have cost centers from here and from there that can be put in manually to create the entire picture for that particular manager."
Travizon uses data feeds from Autodesk, as well as an automated "report bot" to link individual travelers, cost centers, report recipients and associated data. The system serves to ensure that cost center hierarchies are updated as people join the company or move to different departments.
Meanwhile, Travizon developed "mid-office and scripting solutions where we'll look at what a fare has been priced at and can then push out a notification to Autodesk to list other options for managers' approval ... before you pay for the ticket," Mills explained.
Those other fare options are gathered from the global distribution system and other content aggregators, and sent daily to "a central travel manager inbox where all global travel managers can take a look and see if there are opportunities for cost savings," Finch added. "The trigger is $200. It is all about providing information back to the manager and the employee."
Progressing With Assessing
A next step for Autodesk is benchmarking. Using its data aggregation and analysis NexusReporting platform, Travizon will provide dashboard technology to facilitate internal benchmarking-which "promotes healthy competition" between business units, Finch said-and comparisons to other Travizon customers and industry averages. Using a Web-based interface, Autodesk managers and senior leaders can see color-coded indicators showing how their departments stack up and areas for improvement. Customizable metrics include average ticket price, cost per mile, average advance purchase and costs for hotel stays and car rentals.
If the Autodesk-wide cost per mile for airline tickets "is 11 cents and a particular division's is 30 cents, it sparks questions" during quarterly meetings with business owners, Finch said. "Are they traveling more internationally? Are they traveling more in business class? With those other reports that come out, I am able to say, 'If you reduced business class by 20 percent you'd save x.' "
|
"If we can provide enough information to managers, then eventually they will take a look at the report and locate problem employees--the ones that are spending over $1,000 a ticket more than they have to be."
— Bruce Finch, Autodesk
|
|
|
After beta testing the system for the past few months, Autodesk now is rolling out the benchmarking tool "to the masses."
Autodesk also wants more regional data on hotel costs--"which probably is the most difficult product globally to get our arms around," Finch said--so it can combine that information with meetings spend data. "This year, working with our procurement team, we will be able to marry our metrics with theirs and, hopefully, as we go into our request for proposals for next year, be able to leverage off one another."
Noting that sales and marketing teams at other companies often "bury all their stuff" in the meetings budget line, Finch said, "It is amazing to me that more corporate controllers and CFOs don't want those two [meetings management and transient travel] disciplines married together."
To complete the reporting circle, Autodesk this year also plans to roll out an automated travel and entertainment expense program (first in North America, then in other regions) to link booked data to "consumed" data.
Apart from travel spending data, Travizon provides to Autodesk the GlobalGuard tool, a traveler tracking system to help the company locate employees around the world. "We are able to see the number of employees on every single flight on a global basis, and next to their names and titles are flags from the agencies that made the booking," Finch explained. "We could never have had all that four years ago."
Now, by receiving daily pre-trip information, Autodesk can be sure its travel agencies around the world are not unknowingly violating the company policy of having more than four employees on a given flight. "Let's say we book two people on a flight," Mills said. "That is not a violation. But let's say the folks in the United Kingdom [from another Autodesk travel agency] also book two people on the same flight. If they are doing their individual reporting, it will never flag as a violation, but since we're harnessing all that data, we can send out one report showing the violation."
Meanwhile, Autodesk also is working to benchmark its remote conferencing activities, in terms of both cost and carbon emissions reductions. Telepresence technology has been installed in key locations in the United States, Europe and China, with plans for additional facilities in Singapore and other locations. The company plans to track trip reductions on heavily traveled city pairs and use an internally developed calculator to determine money saved by avoiding airline flights, hotel stays, meals on the road and other travel costs, and to help measure Autodesk's carbon footprint.
