Deploy Quickly and Walk Away
For Hormel Foods, a hosted T&E solution proved a “quick win” as part of an outsourcing initiative affecting noncore processes, says James Sheehan, vice president and controller of the company. The system, from Gelco Expense Management, was up and running in 60 days and required little involvement from Hormel’s internal IT staff. “We wanted something that worked well and would provide both savings and analytical tools, but we wanted it to be a task we could complete quickly and walk away from,” adds Sheehan.
Like Reitmans, Hormel previously used a manual approach based on spreadsheets that took 14 to 17 days to reimburse employees and frequently resulted in muddled currency exchanges. Today, the system provides reimbursement in just three days, and the T&E data has become a sales tool for the company’s major food-services business. “We capture the amount of money we spend with the hotel chains,” says Sheehan. “So when we call on customers, we are able to show not only that they are good clients, but that we are supporting them by staying at their hotels.” And by linking the Gelco system to Hormel’s corporate credit-card account, Hormel has smoothed foreign-exchange transactions for international travelers. “Before this system, we were constantly going back and redoing expense reports, trying to recover payments and make them fair to employees,” Sheehan says.
At AstraZeneca, T&E is so “humongous,” says Mike Herubin, manager of expense reimbursement, that it calls for heavy-duty in-house T&E management. Herubin serves an 8,000-strong pharmaceutical sales force in the United States that is constantly on the road wooing doctors. Following the 2000 merger that created the firm, AstraZeneca played with the T&E systems in place at both Astra and Zeneca, but ultimately decided to go with a new system from Geac. The company needed workflow capabilities to electronically route reports for manager approvals, along with the ability to embed travel policies and rules into the process to improve compliance — all while keeping costs down.
But Herubin says the biggest benefit proved to be increased visibility. “Once we got the data, it enabled us to do data mining, looking at the information and providing more meaningful reports, even electronically monitoring what’s going on in the system,” says Herubin. Now he monitors a variety of expense metrics, such as American Express credit-card delinquencies (employees have individual liability for the cards they use) and potential errant charges, such as one made at a home-center retailer. Reductions in delinquencies have resulted in six-figure gains for AstraZeneca, while rebates based on the volume of charges have returned $1 million to the company this past year alone.
“Doing these things, and letting people know that we’re looking at their spending, makes them think twice…and helps a little with mitigating fraud,” says Herubin. “Data mining is the real benefit companies should tap into. Utilize your data — get in there and look at it. Don’t let it sit meaninglessly.”
Next up at AstraZeneca: an imaging system that will allow sales reps to fax their paper receipts to the T&E system, where they will be digitized and attached via bar codes to the actual expense reports. “This brings the receipts back to the manager’s desktop, versus the old system with just an electronic version of the receipt, not the actual image,” says Herubin.
Experts say the next frontier is for greater integration between online booking and the T&E systems that track and manage spending. Online travel provides its own forms of savings (see “Travelin’ On(line),” Winter 2004). By combining the two, companies will begin to approach a closed-loop system that may make today’s manual processes as outmoded as the biplane.