1 Priyan Fernando PhoCusWright Executive Conference November 14, 2006 FINAL Good Morning. I‟m truly honored to be here today. This is my first PhoCusWright conference. And I would like to thank Philip Wolf for driving this dialogue on “what‟s next” in our respective businesses. Clearly, the next generation of travel –– Travel 2.0 –– is upon us. And established Travel Management Companies (TMCs) like American Express are looking at their business models in a very different light. I have had many opportunities to visit our travel service centers around the world. And I am excited to see how we are embracing the reality of Travel 2.0. 2 We are re–casting our centers to adapt to a climate where online “self–service” has taken firm root. Customers, of course, want a seamless online experience. We also know that when customers pick up the phone it is now for specialized transactions, and therefore they expect personalized service every time. So they want the best of both worlds, online and offline, delivered with excellence…. and of course, at a lower cost. I believe TMCs are best-positioned to deliver on this promise. The question is: How do we achieve this? How do we prove to the marketplace that TMCs have a solid future in the era of Travel 2.0? To answer this I am reminded of Peter Drucker‟s quote: He said “The best way to predict the future is to create it.” While this might mean dismantling some of the past, the future belongs to those who embrace the technologies of Travel 2.0 –– not only because they 3 are cool and hip –– but more importantly because they have the ability to enrich the customer experience. The “new world” of Travel 2.0 is really about building on the strengths of the “old world” of Travel 1.0, and supporting the needs of customers who are now… more global and more connected. Customers who are working around the clock and around a deadline. Customers who are expecting the “old world” to operate just like the new world….. To be always on. For Travel 2.0 to truly succeed, the online and offline worlds must work together seamlessly. **** So, Travel 2.0 to me, is about three things: - „Simplicity.‟ - „Convenience.‟ - And „peace of mind.‟ 4 TMCs need to embrace strategies to drive these three expectations to our customers. So first, let me talk about …Simplicity. Like I said, whether they are picking up the phone, or going online, customer‟s expectations are the same. They want to get information or book their trip as easily as possible. No matter where they are in the world… It should be simple. Likewise, companies want clear visibility into what they‟re paying for. They want actionable and user– friendly intelligence to manage their travel program. Again, it should be simple. So how do we – as TMCs – make this possible? I believe it is through standardization. We must learn from other business models that have re-defined their industry through standardization. They standardized their processes and technology to simplify the customer experience and add value. 5 The principles of standardization are relevant in both the online and offline worlds. Because even in this Travel 2.0 environment, there will be many times when customers need human assistance. In other words, parts of Travel 1.0 will still continue to be very relevant. **** You know, in this connected environment it will be difficult to deliver on our customers‟ needs without two critical attributes. TMCs must have scale and globalness. Standardization enables TMCs to leverage their scale and to do things better, faster and cheaper. Standardization also enables TMCs to provide consistent service around the globe, online and offline. To achieve this it is essential today to have common and integrated technology platforms around the world. Let me give you an example… 6 A traveler from California goes on a business trip to China. He booked his trip on our most used online booking tool with GetThere from Sabre. While in China, his plans change and he needs to get home a day earlier. He calls our toll-free number and changes his flight from Wednesday to Tuesday. This should be simple. However, for a TMC to fulfill transactions like these, thousands of times a day for travelers around the world –– here‟s what must happen: The call must flow through a global call center network that is open 24/7, one that „follows the sun‟ and never closes. This requires all platforms around the world to be integrated. The network must be capable of providing access to the travelers‟ personal record in an instant. 7 And the travel counselors must be equipped to fulfill the transaction with a common „touch and feel,‟ no matter where in the world they are. In a 24x7 global environment, we need to rely on technology to recognize this traveler, to access his personal profile and preferences and to make his life simple. To ensure global access to this personal information, the traveler profiles could be hosted in a global virtual private network rather than a particular GDS, which may not be available in all locations. This enables customers to own & keep their profile current, and also helps TMCs to provide personalized service no matter where they are served. **** The traveler also wants a simple way to reconcile and complete his expense reports. And for this an integrated end–to–end expense management tool is important. We work with Concur Technologies to provide an effortless way to capture, reconcile, report and now audit all T&E spend. 8 And, in this age of Sarbanes–Oxley, more and more emphasis is being placed on the accuracy and integrity of travel data. We also need to rely on leading edge automation to efficiently filter this data and simplify the myriad of tasks required to complete a transaction. By working with TRX, American Express ensures the integrity of all its T&E data in a simple and consistent manner around the world. So my point here is: To coexist with and enable Travel 2.0, TMCs must first standardize their existing Travel 1.0 infrastructure. They must choose the right partners and invest in the right technology to drive simplicity and deliver value. This brings me to my second point – Convenience. Today our personal and professional lives are busier than ever, they are converging and work/life balance is a constant struggle. 9 This is especially true in travel, where contrary to earlier predictions, business travelers are flying more often, and for longer distances. And the current environment has increased the stress of travel, making it more demanding and time– consuming. So in this new world of Travel 2.0, TMCs must embrace technology that brings convenience to our customers‟ work and personal lives. You know, as work styles have become more mobile, virtual, and self–powered, the Web has become the place where real work is accomplished. However, the clutter of choices employees face on the Web is distracting them and is actually slowing them down. They need some relief. The way to provide this relief is by aggregating Web content and services from many sources into one corporate space. This has become a reality in the consumer space, thanks to companies like MySpace and Amazon. 10 These companies have introduced technology that has raised the bar on personal convenience. So the convenience of Web 2.0 is now becoming an expectation in the corporate space as well. Now consider this. In business travel, we are moving towards a “self- service” marketplace where all travel–related services – that‟s the T AND the E of T & E – can be aggregated or “mashed-up” in one place. In partnership with Rearden Commerce, we have recently launched – the American Express Intelligent Online Marketplace. We are working to design and deliver Web 2.0 convenience for employee business services. Let me explain why this is important. Think of your trip here today. It did not just involve a flight, a rental car and a hotel room. But as most trips do, perhaps you required other services as well. 11 You probably needed airport parking or ground transportation. Maybe you needed to ship some work materials overnight and be on a conference call at your hotel. And, you are probably having dinner with colleagues this evening and have a dinner reservation or plans for some entertainment. **** By logging into this online market place you can source all of these services in ONE place and pick the options most convenient for you. For the individual – think of this as a Web-based Personal Assistant. Gone is the need to make numerous calls and visit multiple sites with different passwords. The trip is completely arranged to the final detail based on individual preferences and approval levels. And when the transaction is complete, the information is synced real-time to your calendar and 12 sent directly to your device of choice: PDA, phone, fax or text message. It will also automatically notify you of any unexpected changes to these reservations. So this type of software-as-a-service utilizes open- source technologies and enablers such as AJAX and RSS, to enable more aggregation, more choice, and more convenience. Web 2.0 technology will enable TMCs to expand their scope and link with their travelers. They can bring them services like restaurant reviews…supplier promotions… local weather…traffic reports…and flight and airport delays. The convenience of these new technologies is also fostering employee social networks within the company, and this has far-reaching ramifications. Employees are empowered by two things: Broader access to content and the ability to read and share experiences about suppliers. **** 13 You know, we are all moving to Web 2.0 whether we like it or not. Technologies like wikis…blogs…video–sharing… instant messaging…and podcasting … that are so prevalent in the consumer space are now invading the corporate space. So as employees move towards Web-based lifestyles, all of these new technologies and applications must be exploited by the TMC to enhance their relevance. Web 2.0 brings convenience and a more simple way to do things. Finally – my third point – peace of mind. Providing peace of mind is critical to our customers. It means: - More control over spend - Security for travelers - And data protection and privacy 14 Let me touch on each of these, briefly. When we look at how we control T&E spend, we see the traditional sourcing of air, hotel and car rentals. Did you know that this represents only about half of the true T&E spend??? As I stated before, the rest of spend such as dining and entertainment, airport parking, web conferencing and package shipping, – is largely unmanaged. In certain industries dinning expenses could exceed the cost of air travel. Benchmarking data shows savings opportunities of up to 10% to 20% in these categories. By integrating these business services into one tool, policy compliance -- to use preferred suppliers -- can happen at the point of sale. Broader control and spend management provides peace of mind to many! **** We are operating today in a crisis-conscious environment. So peace of mind is also about security. 15 Our customers depend on us to take care of their travelers. They want them to be secure on the road, they want them to have global travel support, and they want them home safely. Today, they want real–time information on events such as approaching hurricanes, political or terrorist unrest, and flight disruptions sent to their mobile devices. This information helps them take proactive steps to maximize safety and minimize inconvenience. For instance, last year during the London bombings, we were able to use our crisis management tools, to identify, locate and reach out to our thousands of travelers who were in that area. All this within a couple of hours of the incident. We worked with travelers to get them home safely, or to provide other assistance – like securing blocks of hotel rooms, or making alternate travel arrangements. For instance, after Hurricane Wilma in Mexico, we chartered a plane to bring back our stranded travelers and card members. 16 My point again is that these services will continue to be required in the world of Travel 2.0. We were able to do this because of technology that integrates Card and Travel data to support travelers who complied with their company‟s policy to use their TMC. **** Finally as TMCs, we must provide peace of mind on the protection and privacy of our customers‟ data. In this connected world, any breach of „information security‟ or „customer privacy‟ has far–reaching consequences for both the traveler and the company. We must use the right technology to mask confidential information and comply with data protection and privacy laws that are in place around the world. Technology is an integral part of corporate compliance and travel policy. Even more important, it‟s about a company‟s care for and protection of its people. 17 So, as today‟s marketplace considers the value that Travel Management Companies bring to the table…let me just say: TMCs have a unique opportunity to play a pivotal role in Travel 2.0. We must capitalize on our servicing strengths and embrace new technologies that deliver a seamless customer experience. But, it would be imprudent to do this on our own. We must partner with technology experts who have competency and scale. We also need to choose our partners wisely, and not be distracted by technologies that do not fit our strategy. **** The key therefore is to make technology investments that deliver significant value to our customers. 18 Value that makes service simple, convenient, and provides our customers with peace of mind. With that, TMCs can deliver on their promise and thrive in Travel 2.0, and beyond. Thank you.
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