Xerox Automates Pretrip Approval

<B>Xerox Automates Pretrip Approval</B>
<I>GetThere-IBM Integrated Tech Prepopulates Expense Reports</I>

By Jay Campbell

The document company is going paperless.

Starting Feb. 1, Xerox Corp. will mandate that employees with Web access use E-Pay, its internal brand of IBM's Expense Reporting Solution that prepopulates data from an automated booking tool.

The integrated technologies enable a paperless pretrip approval process that is paramount for the embattled company, which is in the midst of a $1 billion cost-cutting initiative focusing heavily on supply chain and labor expenses.

The Stamford, Conn.-based company hopes to cut per-report costs to less than $3 from $6, with untold gains in productivity and vendor negotiations. Xerox moves 400,000 expense reports and spends $50 million on U.S. booked air travel annually.

E-Pay retrieves data every 20 minutes from the GetThere-powered Xerox Travel Online booking tool. Since that data otherwise would be keyed in by travelers, the company hopes by year-end to triple XTO usage to 60 percent from the current 19 percent. That will increase usage of electronic tickets and savings on transactions and rates; already, Xerox is saving about 10 percent on airfares booked through GetThere.

Meanwhile, Xerox likely will remove two or three of the eight positions in its financial services department, assign the remaining personnel additional tasks and consolidate some functions performed elsewhere.

The company expects to show a return on its investment in E-Pay within a year.

"We were trying to find a way to mechanize the pretrip approval process," said Helen Kuhn, manager of customer service and satisfaction in Xerox's North America financial services division. "We wanted to somehow move to permission versus forgiveness, so travelers understand the policies up front and do the right thing rather than, after the fact, getting something approved outside of policy."

Xerox will reduce post-trip approval as employees stay within approved parameters.

"Pretrip authorization is an overlooked opportunity," said Norm Rose, president of Belmont, Calif.-based Traveltechnology.com and author of an analytical study of corporate self-booking tools published in November 2000. "Authorizations have been eliminated by most companies because they turn out to be rubber stamps. You really need to base those types of approvals on logic and business rules. For example, 'My number-two salesperson spends a lot more on travel with less productivity than my number-one does.' "

Rose suggested Xerox's move may be a sign of things to come as technology improves and more companies face similar cost-cutting challenges.

For Xerox, the improvement in technology was essential.

"The problem with pre-approval is it's a manual process, it takes three to four days, and you end up losing airfare before getting the trip approved," said Wendy Tuttobene, project manager in travel services. "Now, the tracking capability allows you to get online and if your manager hasn't picked it up, you can move it to another manager. After it's approved, it's a direct link to the travel agency to cut the ticket."

After being notified by e-mail that they have a pending trip request, managers can compare the proposed costs with benchmark rates provided by Runzheimer International, making them aware, for example, that while "I can get a $98 fare on JetBlue to New York City, I didn't tell him that then hotel will be $300," said Kuhn. Guidelines for meals also are included, and Xerox hopes to extend the benchmarks to international travel as well.

Travelers enjoy faster reimbursement and spend less out of pocket. A major objective is to eliminate paper receipts by using the Amex corporate card. Xerox also is moving toward using electronic signatures wherever possible.

T&E and purchasing managers benefit from cleaner data.

"We are hoping to glean a lot more accurate reporting," said Nan Vanee, a senior buyer in global purchasing. "And that will help from a leveraging standpoint. Already we have a good handle on airline, but when it gets into hotel and car, there are extras like taxes and refueling. Now we can dice and slice that information."

The integration of E-Pay and XTO grew out of the initial selection of an expense tool, which began after the Y2K hype subsided around this time last year. Xerox had set up a cross-functional team for a vigorous selection process involving nine expense vendors.

Xerox selected IBM, in part, because of Big Blue's ability to offer electronic hotel folio data (BTN, Dec. 4, 2000). Now, XTO indicates which hotels offer electronic folio, enabling travelers to avoid those for which they will need a paper receipt.

For GetThere and IBM, having the Xerox pretrip programming work behind them means they can market the feature to other clients.

"Xerox became the first user of a piece of integration work we already were going to move forward with," said Ray Curatolo, IBM expense report solutions consulting and service practice leader. "This is not just a one-off. We're going to do it with Toyota and others." Curatolo said IBM is not working with other booking vendors to the same extent.

Although GetThere has a "light" pretrip approval feature in its own tool, demand for a more robust pretrip process from Xerox and others is what prompted it to set up the XML-based feed to IBM's ERS through its DirectData module.

For that, GetThere charges an additional set-up and monthly fee, which "can be negotiable," said product manager Dave Morse. "There are other clients with different expense partners who are interested."

In addition to expanding E-Pay to Canada and Europe, Xerox is exploring such other cost-saving initiatives as Web-based meetings and consolidating European travel management.

As part of the $1 billion cost-cutting initiative, Xerox created productivity targets for reduced travel spend, under the watchful eye of vice chairman and CFO Barry Romeril.

"He's our biggest supporter on E-Pay," said Kuhn. "He wants everyone in the company following the same process, so he's breaking down a lot of barriers for us on what were a lot of fiefdoms. We fully expect our CFO to use his PC to approve expense reports; actually, he wants to be one of the first people trained.