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Buyers Split On Pre-Trip Tool Use
By Jennifer Merritt
NOVEMBER 06, 2006 --
Midmarket business travel buyers are divided on the use of pre-trip approval, as many buyers in the $2 million to $12 million U.S. booked air spending tier are moving away from such practices, while others are embracing such tools. Furthermore, of those who use pre-trip approval, implementation methods vary from forms at the front end to back-office tools.
Just last week, anti-virus software company McAfee, estimated to book about $12 million in U.S. air volume this year, implemented a pre-trip approval process using its expense reporting system, Ariba. An employee puts in a travel authorization request that flows automatically per the approval hierarchy in SAP to the traveler's direct manager. Once the itinerary is approved, a task number is created by the system and the traveler gets an automatically generated e-mail with an authorization number allowing a booking through either an agent or the online booking tool.
Judy Shannon, worldwide strategic sourcing manager, said she opted for pre-trip approval in McAfee's expense system versus its online booking tool, GetThere, because it allows importing of travel authorization data directly into an expense report. "It's a check and balance and it will automatically flag noncompliance," Shannon said.
"The key for me," she continued, "is how companies choose to be accountable. Are you going to do preauthorization via a tool or via your managers? Our executives felt that on a global basis across the organization, there wasn't as much awareness and discipline just using a form. People weren't aware of how much travel we were doing and we do a lot for a company our size."
Rick Wakida, global travel manager at Gilead Sciences, estimated to book about $8.5 million in U.S. air in 2006, agreed. Currently creating the company's first managed travel program, Wakida said he expects to have Cliqbook's online booking tool implemented by 2007 and looks forward to turning on its pre-trip approval functionality. Currently, Gilead requires travelers to fax or e-mail to managers a Microsoft Word document detailing reasons for a trip, but not cost. "The concern is that managers are approving the concept of a business trip, but that's it—not a budget or a cost," he said. "It seems like they're making approval decisions without all the information, which will be more addressed with our updated policy. With the implementation of the online booking tool, it will be part of the policy, which will stipulate that bookings that exceed a certain threshold will need to circle back to a manager for approval."
Marcia Saurman, director of global travel at Cadence Design Systems, headquartered in San Jose, Calif., a few years ago did away with her company's paper-based pre-trip approval product and found travel immediately spiked. Now, every trip must be approved by a director for domestic travel and by someone at the vice presidential level or above for international travel.
Cadence, which expects to spend $9 million on U.S. booked air travel this year and also uses Cliqbook, uses the pre-trip approval process in the online booking tool's workflow. For agent-initiated bookings, the itinerary is e-mailed to an approver for his or her OK and then sent back to the agency before a ticket can be issued. "After re-implementing our trip-approval process in May 2001, our total number of transactions dropped by 29 percent, average ticket price dropped by 25 percent and our total spend dropped by 47 percent—and a little of that has to do with the loosening of the economy," Saurman said, "but the savings from it are very significant and are very measurable."
Meanwhile, many buyers are not embracing pre-trip approval. "The people moving away from it are the ones who have more control through their charge card or expense reporting system," said Carol Ann Salcito, president of the Management Alternatives consultancy in Norwalk, Conn. "They may not require someone to get approval up front, but they do have a mechanism so that it's at the back end."
Colleen Guhin, strategic sourcing manager at ON Semiconductor, is one such buyer. Her company, which spent about $4 million in U.S. booked air volume in 2005, does not use pre-trip approval, opting instead for managers to approve air, hotel and car rental expenses after a trip is taken. "We made the decision a long time ago that the trip will get approved on the back end," Guhin said, noting that it was a conscious decision made when the company spun off from Motorola in 2001.
"It's very high-maintenance to have pre-trip approval," Guhin said. "It's too bureaucratic and we really didn't need it. If there's an area of the world where it's dangerous, the security director may require that he approve a trip to that location, but that's just based on circumstances. We can always track where our people are."
To some, the idea of authorizing a trip after it has been booked or even taken may steer travelers to book the most economical trip, according to Management Alternatives' Salcito. "If the entire liability rests on shoulders of the traveler, and their boss doesn't approve the trip until after the fact, guess who's stuck with the cost if that trip is not approved?" she asked. "Because of that, the company may say, 'I'm not going to bother with pre-trip approval.' "
This past August, Kay Steele, senior manager of global travel services at toy maker Mattel, did away with her company's pre-trip approval form for domestic, but not international, travel.
"When I went to the National Business Travel Association Exposition & Convention this year, I did an informal survey of travel managers and the majority said, 'No, we do not have one and have not for quite some time,' " Steele said. "From what I can gather, eliminating it appeared as a best practice."
For Steele, whose company booked $9 million in U.S. air volume last year, the process appeared to be redundant. "When you're doing your expense report, that's when your approver will see and approve your trip because they're going to see the entire cost," she said. "What we realized was that it's our back-end review by the executives that really is serving the greater purpose." Steele said Cliqbook, Mattel's online booking tool, has plenty of policy adherence tools and allows travel managers to view an itinerary's policy compliance at the moment travel is being booked.
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