Manufacturing and technology giant Emerson has been
expanding quickly in Latin America. By 2011, it fielded 16,000 employees in the
region and generated revenues of $1.3 billion there. With expanding operations
come growing travel needs. But in relying on a patchwork of at least 25 travel
agencies, the company had poor visibility into its regional travel spending,
few cost controls and few meaningful supplier programs. Enter Mike Million,
armed with a mandate—something the company normally avoids.
After more than 20 years on the travel management company
side, Million in May 2010 was hired as Emerson's global travel manager,
responsible for travel and card programs in 46 countries, filling a
role that had not previously been handled by a full-time employee. By March
2011, the company's president of Latin America tasked Million with implementing
a consolidated regional program.
"We had to do that expeditiously because Emerson was
and is still growing very rapidly in that region," Million said. "We
needed to know how to quantify negotiations" with travel suppliers.
Doing so meant first gaining a deeper understanding of the
region's cultures, language barriers and other idiosyncrasies. To aid that
effort, St. Louis-based Emerson early in the process "spotted a travel
supervisor in Costa Rica who would be our Latin America travel champion,"
as well as individuals in each country—whether managers or representatives from
finance departments—to serve as local-market champions, Million explained.
The selection process for a single TMC to serve Latin
America came down to a choice between American Express and Carlson Wagonlit
Travel, the two agencies used globally by Emerson. In making the decision, the
company had to "align resources and philosophies, get support and buy-in
from senior managers, and get that all into one cohesive, agreed-on agency,"
Million said. "The biggest factor for us in that area was a consolidated
approach to rolling out the online booking tool. At the same time we were
rolling out the agency, we wanted to roll out the online booking tool. We
needed someone to support that tool within each country." Emerson also
sought standardized TMC pricing throughout a region in which billing and
rebating practices can vary. It opted to award the business to American
Express.
According to Gerardo Tejado, American Express Global
Business Travel's Latin America vice president and general manager, "We
worked both with our proprietary markets and alongside our partner network, and
this helped to set a single regional price, taking into consideration that
every country has its own local requirements and different operating expenses."
For online booking, Emerson did more than roll out Sabre's
GetThere in the key markets of Latin America, which hardly are bastions of
self-service; it used the technology to communicate travel policies, integrate
an approvals process and create a mandate. "Here at Emerson, the word 'mandate'
is one that we don't typically use," Million said. "However, within
Latin America, since there were so many fluid components—25-plus different
agencies—it was decided to mandate the program there. This senior leadership
direction in Latin America was the backbone for success."
To maximize benefits, Emerson implemented a policy under
which "travel would not be approved within the region unless it went
through the online booking tool—with some exceptions. That really helped rein
in those adoption levels."
Tejado confirmed that "mandate strategies are quite
uncommon in the region."
He also explained that Amex's "implementation,
deployment, sales, client management and service delivery teams" worked
closely with GetThere and local Emerson personnel on "subsites'
configuration and conducted tests and validated" Emerson's electronic
booking process.
But first, Emerson conducted a "kickoff" call with
Amex and GetThere to secure support from country leaders. "Knowing that we
had a very aggressive goal to meet for our customer, the first thing we did was
host an overview of the adoption rollout plan for all countries involved,"
according to GetThere customer success manager Susan Edstrom. "We conducted
weekly calls and were launching sites while at the same time conducting the
next discovery. We also recognized early on that there may be some hesitancy
locally to answer questions due to language differences. We added a resource to
the team that conducted the calls in local languages, and it contributed
greatly to the timely completion of discovery, build and rollout."
Within nine months of launching the program, Emerson had
deployed the newly consolidated program in eight key markets—Argentina, Brazil,
Chile, Colombia, Costa Rica, Mexico, Peru and Venezuela—and racked up some
impressive results. The average online booking adoption rate hit 76 percent
across the region, including 70 percent in Brazil, 88 percent in Peru, 92
percent in Costa Rica, 98 percent in Argentina and 100 percent in Chile. The
company also realized a 22 percent average savings on its agency service fees.
According to Rodolfo Silva, GetThere's managing director in
Latin America, the average client adoption rate in the region is 68 percent. "Emerson
countries are all above the average," he explained, noting how a couple of
"standout items" contributed to that success: "first and
foremost, a concentrated plan that determined site set-up for the region with
minor changes or uniqueness in-country; second, a local champion who led the
program for Emerson."
By tightening the program—including a switch to one
corporate card, Amex—Emerson established the leverage necessary for new
supplier deals. For example, a global program with National Car Rental "was
just rolled out to Brazil," Million said. "And this year, for the
first time, we negotiated air programs with the larger carriers down there:
alliance agreements and regional carriers. We needed visibility to negotiate
and we finally have it."
This report
originally appeared in the Aug. 20, 2012, issue of Business Travel News.