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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
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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.‟
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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.
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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.
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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.
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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.
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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.
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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
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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.

****
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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
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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.
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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.
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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.
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

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.
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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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