Qualitative Research in Accounting & Management

Business Process
Redesign in Travel
Management in an SAP
R/3 Upgrade Project—A
Case Study
Marit Schallert
IDEA GROUP PUBLISHING

IDEA GROUP PUBLISHING
Business Process Redesign 319
701 E. Chocolate Avenue, Hershey PA 17033-1240, USA 16#$%"

Tel: 717/533-8845; Fax 717/533-8661; URL-http://www.idea-group.com
u p In c.
BusinesshProcess d ea G roRedesign
y rig t I
in p
CoTravel Management in
an SAP R/3 Upgrade
Project—A Case Study c.
In
ro up Marit Schallert
e a G Queensland University of Technology, Australia
h t Id
y rig SUMMARY
Cop
EXECUTIVE
Travel and related expenses account on average for 7% of an organization’s total
c.
operating costs and are escalating to be the second largest controllable corporate expense.
In
Based on rising business travel demand in past decades, the management of business travels
up
has received increasing attention. Furthermore, the rapidly changing environment in the
r o
travel industry dominated by requirements for e-business offers organizations evident
G
Idea
possibilities to manage business travels more efficiently. As a consequence for organiza-
tions, all transactions around business travels, from travel planning to reimbursement of
ht
expenses, have gained great importance. Organizations aim to reduce and control their travel
ig
r
costs by the utilization of integrated computer systems, such as the enterprise system R/3
y
Cop
and implementation of Travel Management. But how does an organization find its way to
reduce costs and at the same time process high amounts of business travels based on a high
quality for the traveler? Is this task an insoluble conflict or can it be a win-win situation for
all involved parties? The following teaching case provides the initial stages of a process
reengineering project undertaken in a shared service provider for local government depart-
ments in Australia. The objective of this project is to reengineer the process of business
nc.
travels applying a reengineering methodology.
I
BACKGROUND
roup
ea G
The Australian Corporate Services Agency (CSA) is a shared service provider estab-
Id
lished in July 1996 and jointly owned by two Queensland government departments. CSA
ht
yr g
provides its services to these two departments, which are responsible for industries and
i
resources. CSA was founded by outsourcing and merging service departments of these two
Co p
This chapter
Copyright
Kosrow-Pour.
© appears in the
2003, Idea
permission of Copyright
book,
Group
Idea Group© Inc.
2003,
Annals
Inc. of Cases
Copying on Information
or distributing in printTechnology, Volume
or electronic forms5,without
edited written
Idea Group Inc. Copying or distributing in print or electronic forms
is prohibited.
by Mehdi
without written permission of Idea Group Inc. is prohibited.

320 Schallert
Figure 1. Business Objectives of CSA
The Business Objectives of CSA
♦
.
Reduction of delivery and production costs
♦
♦ nc
Elimination of redundant activities and functional overlapping
I
♦
ro p
Adoption of Best Practices within public services
u
Improvement of service availability
ea G Efficiency
ht Id Customer Satisfaction
yrig
Cop
Industry Department (ID)
Objective:
Provide high quality food and fibre
Resource Department (RD)
Objective:
Assessment and monitoring of all
products to local and international statewide natural resources– soil, water
markets driven by science and innovation and native vegetation - to ensure they are
while valuing the environment and take in managed as effectively as possible
these markets a leading competitive
position
Inc.
ro u p
organizations to a separate organizational entity. The underlying beliefs are that shared
services can greatly improve the value and enhance the productivity of support functions.
a G
Therefore CSA’s business objectives of shared services are strongly influenced by the
e
ht Id
demand for CSA’s services as presented in Figure 1.
The infrastructure of CSA has been designed to effectively deliver 25 major products
yrig c.
covering financial, human resource management and administrative functions through a
Cop In
head office and seven service centers. The total workforce of 260 employees ensures a
p
rou
statewide presence of CSA. While the majority of products and services are managed from
the head office, CSA’s service centers are able to assist customers more locally with the
a G
delivery of services. Basically CSA comprises three service areas in business advisory,
e
h t Id
support services and corporate information systems led by a general manager. CSA delivers
its range of corporate services under a service level agreement to ID and RD. CSA’s mission
y rig
statement is to “professionally deliver quality corporate services for government.” CSA is
o p
responsible for operational and processing functions for corporate services, with the
C
strategy and policy functions remaining with the customer departments. In the financial year
2001/02 (the Australian financial year starts on July 1), CSA had a financial budget of AU$22M
available to deliver all services. One major service CSA is providing is the organization of
business travels for 8.157 employees working for ID and RD. Both departments are due to
their business objectives spread over the state of Queensland at more than 150 locations
(Corporate Services Agency, 2002).
SETTING THE STAGE Inc.

roup
Corresponding to their strategy, CSA has implemented an enterprise system, which as
ea G
a real-time and centralized system supports complete data visibility on all organizational
levels. SAP R/3 (Version 3.1H) was chosen to fulfill CSA’s business requirements; also both
t Id
of CSA’s clients use the SAP R/3 system. SAP R/3 Financials has been used since November
h
ig
1998, and the SAP R/3 Human Resources since late April 1999. The implementation costs were,
yr
Cop
Copyright © 2003, Idea Group Inc. Copying or distributing in print or electronic forms without written
permission of Idea Group Inc. is prohibited.
as in many other implementation projects, determined by high consulting costs. Before the
enterprise system was implemented CSA had to manage several legacy systems, which were
partly substituted by the enterprise system. A still remaining legacy system is the in- house
developed Asset Management Information System (AMIS). AMIS contains a catalogue of
nc.
owned and leased assets separated by asset fleet, type, make and model, location and
up I
tasks:
dea ro
business area. Apart from asset register functions, AMIS performs the following additional
G
•
right I
Fuel Card Management: Cost recovery of fleet vehicles’ fuel expenses and control of
y
• Copfuel invoices.
Vehicle Hiring: Provision and invoice validation of fleet vehicles for business travels.
CSA administers 2,000 fleet vehicles.
The IT staff of CSA is very confident with this system and there is an organization- wide
high resistance to replace this system. AMIS is not fully integrated with SAP, but commu-
nicates in some areas via interfaces with SAP R/3. Currently the preparation for a system
upgrade to SAP R/3 4.6C, scheduled for April 2002, is taking place. To realize the benefits of
Inc.
the costly implementation and upgrade, CSA is faced to achieve full capabilities and business
values by adopting best practices, reducing operational costs and integrating the Financials
roup
and Human Resources modules. The IT management believes that a major impact on the way
a G
of service delivery will be from the increased integration of information systems and through
the improved use of information technology. To realize the benefits of information systems,
e
Id
data shall be captured on one single and early point and converted into meaningful
ht
yr g
information, legacy systems and business processes need to be integrated, and data and
i
information need to be easy accessible. Some of the key areas on which CSA is focusing
Cop
involve employee self-service, electronic forms, e-procurement, and travel and expense
management.
CASE DESCRIPTION: TRAVEL MANAGEMENT

Inc.
AT CSA
roup
Project Background
e a G
h t Id
Liz, administrative travel services officer at CSA, is sitting at her desk and
y r g
preparing a report for John Walker, Resource Department. John would like to
i
know how many times some of his team members were traveling to Rockhampton
Cop
and Bundaberg to set up a brand-new dingo fence. He needs to know in detail
which accommodation they selected and who else of the entire organization is
going frequently to these places and for how long. A local hotel manager, who
offered John a business contract with fixed rates for accommodation, contacted
John before. “This can significantly reduce our accommodation costs,” he is
Inc.
thinking, and he wants to investigate this lucrative offer. John e-mailed his
request to Liz, who easily creates for him a report in the enterprise system
roup
containing all required details. Ten minutes later John receives the report and
he can start to evaluate the data.”‘How the time changes,” he thinks.
a G
Unfortunately the easy creation of a report in the enterprise system for John Walker is
e
ht Id
not a reality yet. Mary-Lyn Harrison, senior project officer at CSA, stated, “We simply don’t
know who is traveling when, where and why, causing how much costs although we capture
yrig
all data on our travel documents.”
Cop
322 Schallert
Figure 2. Process Management Life Cycle
• Process identification
•
• Process analysis
Inc.
Process modelling (as -is)
roup
Process improvement (to -be)
•
•
ea G
Process implementation
Process execution
•
t Id
Process monitoring /controlling
h
yrig
Cop
For these reasons CSA’s management decided to initiate a process reengineering
project as part of their efforts to realize maximum benefits of their enterprise system. The
scheduled system upgrade offered the chance to implement and to redesign the business
travel process based on a total Travel Management solution. The business process redesign
should achieve a higher process efficiency and enable CSA to serve their customers with
Inc.
Travel Management as a high quality and reliable product. The project should apply the
reengineering methodology of the process management life cycle, shown in Figure 2
(Rosemann, 2001).
ro u p
a G
After identifying all core processes, the processes will be captured in an as-is process
model in order to simplify the following process analysis. Based on identified IT and
e
I d
organizational issues, the project team will develop alternative to-be scenarios and present
h t
yrig
them to CSA’s IT management as project sponsor. The project team will herewith prepare the
c.
decision making of CSA’s IT management under the project management of Mary-Lyn
Cop In
Harrison. For the project team, the implementation of the full-integrated Travel Management
p
ou
solution from SAP seems to be the most coherent step, but the IT management has doubts
r
e a G
if this solution would match CSA’s very individual requirements. Therefore, also alternative
technical solutions and recommendations of how the process can be improved should be
t Id
strongly emphasized. Overall, the project objective is to identify the most suitable Travel
h
yr g
Management solution, prepare its implementation within the upgrade project, and recom-
i
mend how the business travel process should be redesigned and improved.
o p
C Review and Findings
Project
The project team started with a collection of all available data at CSA related to the
business process and interviewed Ken Blake, the business process improvement manager,
and Mary-Lyn Harrison. Ken, who selected the business process with a high priority for
reengineering, presumes that some business trips might be not required. Furthermore, Ken
wonders why no statistical data about business travels are available to report to the senior
Inc.
management and also why the GST of travel and travel-related expenses can often not be
up
claimed back from the tax office. The goods and services tax (GST) was only introduced in
Gro
Australia with July 1, 2000. For most organizations, which never dealt before with GST, this
was challenging and led to enormous changes within their financial management. The
ea
following document was created during a first project meeting with Mary-Lyn and Ken.
Id
ight
yr
Cop
Project meeting protocol 24-05-2001, 2.00-3.00 pm

Participants: Ken B., Mary-Lyn H., Cindy C., Astein M., Frode D., Marte S.
o CSA employs four full time travel officers in four local service centers and one travel
officer at the headquarters to arrange business travels. The role of a central travel
manager does not exist.
up Inc.
o Not included is an officer controlling travel advanced payments, compensating travel
dea ro
expenses or designing financial reports
G
Organization-wide travel services supplier for flights and hotel bookings is Mantas Travel
I
o
yright
since May 2001. New negotiations with Mantas will take place.
Cop
o Preferred service supplier for car rentals is Qfleet, with about 2,000 vehicles due to
negotiated rates. Car rentals from AVIS can also be purchased to special conditions
based on a statewide contract.
o CSA charges 18.45 AU$ from their clients per into SAP R/3 Financials entered travel
expenses claim. These revenues are calculated on a cost-covering basis for all indirect
costs, such as labor costs, allocated overhead costs and cost for SAP R/3 caused in
association with domestic travels. One travel claim can contain expenses of several
travels.
o The captured data in SAP R/3 Financials are total management cost data.
o The GST of all direct expenses while traveling, for example, for taxis, meals, newspapers
consolidating all data.

Inc.
and other incidentals, is not reclaimed due to the high effort of collecting receipts and
roup
Travelers can receive a reimbursement either of all travel expenses on a flat-rate basis
(so-called travel allowances, according to CSA’s travel policy) or of all actual travel
o
expenses.
a G
Corporate cards are widely not used for business travels. Only senior executives and
e
ht Id
managers are corporate cardholders. Credit card statements are monthly provided by the
card issuer VISA as digital data.
yr
o
ig Some travelers do not have access to information technology and rely on the services of
the local service centers.
Cop Available data of the financial year 1999/2000 about business travels
Approximately 47% of all employees of ID and RD were traveling for various business
purposes
o 29,823 trips were processed
Inc.
up
o 1.1% of these travels had an overseas destination.
Gro
o Among the interstate travels 95% took place within Queensland (intrastate).
o Direct travel costs were 16.519.417 AU$.
Idea
o Costs for overseas travels reached 1.215.515 AU$
o ID had 1,708 business travelers causing direct travel costs between 35 AU$ and
ig t
8,594.94 AU$ per traveler.
h
o Traveler applied in 6% of all travels to receive travel allowances in advance of the trip.
yr
Cop
Paper-based documents within the process
1. Travel requisition form–required if the travel service supplier Mantas Travel or AVIS is
involved for flight or car booking and reservation of accommodation.
2. Motor vehicle booking form–required if a Qfleet vehicle needs to be booked.
3. Application for travel advances–required if the traveler applies for travel allowances which
will be paid in advance of travel covering all direct travel expenses.
4. Travel expenses form and possibly receipts–required if the traveler wishes to claim either
travel.
Inc.
the total amount of all direct travel expenses after travel or prefers to receive allowances after
roup
5. Private mileage form–required if a private car was used for a business trip to claim the car
usage on a flat-rate basis.
a G
The responding activities to the processing of these documents are a booking confirmation or
payment or an inquiry based on incorrectness, missing data, authorization or not in
e
ht Id
accordance with the travel policy. All documents are decentralized in the appropriate local
service center archived.
yrig
Cop
324 Schallert
The project team took this information as initiation to follow the flow of the above
documents and identify their origin and transformation within the process. Further it analyzed
interview results from travelers in order to evaluate travel patterns. This enabled the team after
several weeks of work to describe the process on an abstract level with two incidences, A
and B:
Inc.
Process Description
roup
Project Findings by Cindy C., Astein M., Frode D., Marte S.
ea G
Objective of this description is to build a basis for the establishment of a process model depicting
the as-is stage of the selected business process.
ht Id
The overall business travel process is triggered by a reason for a business travel with a specific
rig
date and location. It needs to be distinguished between two different process incidences caused
y
Cop
by the different characteristics of the business travel.
A: Interstate, 2-3 days, flight

For example, travel of a senior manager to a two-day conference in Melbourne.
B: Intrastate, 1 day, car

For example, a one-day business travel of a scientist to take water samples on
different sites.
Inc.
Based on the reason for travel, the traveler will have to explore the most suitable transport and
ro p
accommodation for his/her travel purpose.
u
A The traveler will require accommodation and flight. The service provider will need to be
a G
contacted via telephone to receive detailed information about alternative flights and
accommodation. The traveler is not limited by travel policy to directly contact a preferred
e
ht Id
accommodation and explore vacancies. B The traveler will require a car, but no accommodation.
The traveler will have to contact, according to CSA’s travel policy, the government car rental
rig .
provider Qfleet in order to explore an available car. Once the traveler has gained all required
y c
knowledge, he/she will set up his/her personal travel plan. The travel plan includes travel details,
Cop In
such as departure and arrival dates and times, the selected accommodation and selected
p
transport.
rou
The traveler undertakes now the required bookings in accordance with the travel plan.
e a G
A The travel requisition form will need to be filled and approved by the supervisor and a financial
t Id
authorized employee before faxing it to the service provider. As response the traveler will receive
h
g
a booking confirmation via fax. B The booking of a Qfleet car is an internal transaction whereby
py ri
the internal fleet service department of CSA undertakes the booking in AMIS. The motor vehicle
booking form will need to be filled and approved by the supervisor before it will be transferred to
C o
the fleet service department. As response the traveler will receive a booking confirmation.
The traveler will have to decide what type of reimbursement for direct travel expenses he/she
individually prefers:
A Application for travel allowances, presenting a flat rate for daily expenses based on the
destination and absence time, established in travel policy. The traveler can receive these travel
allowances either in advance (advances) or after travel (allowances). If the traveler wishes to
receive advances it will be required to fill the application for travel advances, which will have to be
approved by the supervisor and an officer with financial authorization. B Reimbursement of the
c.
actual travel expenses, which takes place based on receipts after travel (actual expenses).
In
up
Finally, the travel requisition form and, if requested as A, the application form for travel
Gro
allowances are sent to the responsible travel service center. The travel officer will check the
correctness of all details and the accordance to travel policy. If there is incorrectness the traveler
Idea
will be contacted by the travel officer for clearance. In case of accuracy the travel officers will
enter the following data into the SAP R/3 Financials and archive the documents: total amount of
ight
travel allowances, account code, GST claim applicability.
yr
Cop
A If the traveler decided to receive travel allowances all regular expenses will be covered
expenses beyond have to be covered by the traveler him/herself.
B During traveling the traveler will pay all expenses either in cash or via private credit card in
exceptions the traveler will hold a corporate card. If the traveler wants to claim these expenses as
actual expenses all receipts will need to be kept. To claim actual expenses, after return the
up Inc .
traveler will have to complete a travel expenses form, which has to be approved by the
d ea G ro
supervisor. All collected receipts will need to be attached and the form will be sent to the finance
department. The officer will check the correctness of all expense details and the accordance to
yri
archived.
g t I
the travel policy. Finally the data will be entered into the SAP R/3 Financials and the documents
h
C op
CHALLENGES AND PROBLEMS FACING CSA
The textual process description facilitated the project team to identify the following core
processes, which were captured in a value chain, as shown in Figure 3. This value chain should
establish a common understanding of the business process and should help to structure all
reengineering efforts.
Inc.
The project team decided to skip over the development of as-is process models in order
up
to save time, because the SAP R/3 upgrade project was to become finalized. A further
Gro
argument of the project team was that process models become useless after the process
analysis. The project team reported all findings and identified processes to Ken Blake, the
ea
business process improvement manager. The next initial project step would be the identifi-
Id
ig t
cation and analysis of organizational and IT issues within the business process. It needs to
h
be investigated where resources are wasted, process steps can be automated or data
yr
digitalized. This analysis should be presented in a milestone meeting to general management,
p
Co
IT management and process management. After this milestone the IT management is
supposed to undertake the final decision if the SAP R/3 Travel Management solution should
c.
be utilized or alternative solutions should be investigated.
In
Ken Blake has high expectations on the process analysis and from here derived
roup
alternative solutions based on best practices for Travel Management. Oppositely he is afraid
that there will be still a high uncertainty about various issues which can not be solved or
a G
considered in the solutions, because simply insufficient data are available and the complexity
e
Id
is too high. One of his concerns is the high limitation by the travel policy. The project team
ht
is thinking to categorize all travelers into frequent, casual and nonfrequent travelers to
ig
r
establish travel profiles which will be treated in a same way. These travel profiles would
y
Cop
determine the travel policy. To some extent Ken would also like to focus on an organization-
wide corporate card solution for travel expenses in order to streamline travel expenses. The
IT management of CSA informed Ken after investigations that it would be not a feasible
solution to provide to every traveler access to the SAP R/3 system. This would cause
enormous licensing costs for SAP R/3, which can hardly be justified to CSA’s client
c.
departments ID and RD.
p In
rou
Figure 3. Value Chain of the Business Travel Process
ea G Travel
d
Travel Travel Travel
ht I planning booking reimbursement
yrig
Cop
326 Schallert
FURTHER READING
Agnew, M. (2000). Travel & Expense Management: A Special Report in Business Finance.
Retrieved April 2002 from http://www.bfmag.com/specialreports/travelexpense.htm
Avish, S. (1997, September). T&E expense: To outsource or not? Management Accounting,
79(3), 44.
Inc.
ro p
Davenport, T. H. (1993). Process Innovation, Reengineering Work Through Information
u
Technology. Harvard Business School Press.
ea G
Department of Finance and Administration, Australian Government. (2001). CTC Best
Practice Guidance on Travel Management. Retrieved January 2002 from http://
t Id
www.ctc.gov.au/toolkits/travelmgt/best_practice_guidance_on_trav.html.
h
ig
E-Travel. Online Travel Solutions. Retrieved May 2002 from http://www.e-travel.com/.
yr
Cop
Gelco. (2002). Gelco Expense Management. Retrieved May 2002 from http://
www.gelcoexpense.com/.
Lang, J. (1993). The American Express Guide to Corporate Travel Management. New York.
Malhotra, Y. (1998). Business Process Redesign: An Overview. http://www.brint.com/pa-
pers/bpr.htm.
Onley, D. S. (2001, August 20). No more delays—Travel system is ready to go. Government
Computer News, 20(24).
Inc.
SAP. (2001). Travel Management. Retrieved December 2001 from www.sap.com/solutions/
u p
financials/keycapabilities/travelmanagement.
ro
e a G
Segev, A., & Bloch, M. (1996). The impact of electronic commerce on the travel industry.
Retrieved May 2002 from http://lion.mnu.edu/~bgartner/travel.htm
Id
Taylor, L. (1997, November). On the road to reengineering. Government Executive, 29(11),
ht
y
56.
rig c.
Co p
REFERENCES
p In
rou
American Express. (1998). Survey of business travel management. Retrieved May 2001 from
a G
http://home3.americanexpress.com/corp/latestnews/default.asp.
e
h t Id
American Express. (1999). Corporations implement greater control of expenses to improve
competitive position. Retrieved April 2001 from http://home3.americanexpress.com/
rig
corp/latestnews/default.asp.
y
C p
Corporate Services Agency. (2002). Retrieved April 2002 from http://www. csa.qld.gov.au.
o
Farhoomand, A. (2001). Global e-Commerce. Travelling via the Web: The Changing Struc-
ture of an Industry, 25-48.
Meyer, S. & Schumann, P. (1998). Travel management-Anforderungen an die Integrierte
Informationsverarbeitung. Wirtschaftsinformatik, 40, 386-396.
Rosemann, M. (2001). Business Process Management Lifecycle. Queensland University of
Technology, Brisbane .
c.
Waters, S. & Milman, A. I. (2001). Travel industry world yearbook—The big picture.
n
Retrieved December 2001 from http://www.tia.org/Travel/TravelTrends.asp.
I
roup
ea G
ht Id
yrig
Cop
BIOGRAPHICAL SKETCH
Marit Schallert (MBA) is associate lecturer at the School of Information Systems,
Queensland University of Technology (QUT), Brisbane, Australia. She received her MBA
p Inc.
from the University of Münster, Germany, in 1999 and also studied at the Copenhagen
Business School, Denmark. Her main areas of research are Enterprise Systems, Enterprise
u
Gro
Architecture, Business Process Engineering and Process Modelling. Marit has comprehen-
dea
yright I
sive consulting experiences through projects in the telecommunication industry and in the
Cop
public sector. These experiences span from a project at German Telecom to achieve the ISO
9000 qualification to an e-procurement project in the Australian Public Health Services.
Inc.
roup
ea G
ht Id
yrig
Cop
Inc.
roup
ea G
ht Id
yrig
Cop
Inc.
roup
ea G
ht Id
yrig
Cop
328 Schallert
APPENDIX
1. Service Categories and Selected Services of CSA
Inc.
Assets and Administration
♦ Assets Registration
roup Human Resources
♦ HR Reporting
♦ Document Management
ea G
♦ Fleet Management (Vehicles/Equipment)
♦
♦
Payroll Management
Recruitment and Employment
♦ Procurement
♦ Telecommunications
ht Id ♦ Workplace Health and Safety
Financial Services
yrig Information Systems
Cop
♦ Accounts Payable/Receivable
♦ Financial Reporting
♦ General Ledger
♦ Reporting
♦ Intranet Services
♦ Systems Development
♦ Taxation ♦ Systems Operations
Corporate and Business Consultancy
Inc.
ro u p
e a G
2. Statistical Results from Interviews with Travelers
ht Id
yrig Job
Occupational title
level
.
of traveler
c
Preferred hotel, when travel to the same destination
Cop 10%
p In 37%
rou 14%
36%
e a G Prefer booking of same hotel
d
17%
1
h t I 2 3
Administrative Technical Professional
4
Professional Operational
Prefer to stay in different
86% hotels
g
Administrative Technical Operational
py ri
Travel requisition form: Form completion time
C o 20
< 5 min 11
11 <10 min 20
8 > 10 min 4
4 Unknown, secretary is responsible 8
Inc.
roup
ea G
ht Id
yrig
Cop
Medium of receiving trip approval on Time supervisor takes for approval

travel requisition form
up Inc. 4 several hours/
o
19%
r
18 10 immediately
t Idea G 5%
one day
h
> one day
ig
5%
r
57%
Copy phone email verbal

24
paper
14%
> three days
unknown
C rit e ria fo r ch oic e of a cc om m od ation

Online experience in general
2%
17%
34%
8% 30%
18%
1 7%
4%
Inc.
up
70%
o
P r oxim ity to work lo ca tion L eisu re fac ilities
S e lf co n ta inm en t
Ro om servic e
a
Me al fa c ilitie s
Othe r e .g. p ric e , c le a nliness
Gr experienced
1 2
not experienced
e
No a ns wer
ht Id
g
Payment mode
i
18
r
D ay s to rece iv e ac tual ex pens es
y
16
p
corporate
Co
cash payments 5% credit card
14
26% 12
10
c.
8
n
private credit
up
69%
I card 4
Gro 0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 6 17 1 8 1 9 20 21 22 23 24 25 26 27 2 8 29 3 0
Idea
ht
Further results the project team assembled with this survey:
ig
Out of 153 trips
yr
Cop
• 150 had their destination in Australia (interstate).
• 129 had their destination in Queensland (intrastate).
• The most common reason for business travel was projects and trainings.
• The duration was always between one and four days.
• The most used means of transport were Qfleet cars followed by Mantas flights. In
nc.
exceptions other airlines were booked because of cheaper offers.
I
•
•
roup
The most common accommodation is individually preferred hotels.
116 travelers chose for trip financing travel allowances.
ea G
ht Id
yrig
Cop
330 Schallert
3. Travel Expenses Form
Inc.
roup
ea G
ht Id
yrig
Cop
Inc.
ro u p
a G
* Circled Areas Indicate Data Entered in SAP R/3 Financials
e
ht Id
yrig
4. Travel Industry Background
c.
Cop In
The following trends and statistics given by the Travel Industry Association of
p
(Waters & Milman, 2001).
rou
America and the Travel Industry World Yearbook give an insight into the travel industry
•
a G
The U.S. civilian government spent some $3 billion on travel in fiscal 1999; the Defense
e
Id
Department about $5 billion; and the Department of Transportation, $273 million.
h t
•
ig
Asian-American travel volume has grown 7% from 1997 to 1999, increasing from 28.5
y r
million to 30.4 million person-trips. Business trips represent 3 in 10 of the total person-
• C o p
trips taken by this group. (Source: The Minority Traveler, 2000 Edition)
Business travel has grown slightly since 1998, to 212.3 million person-trips in 1999.
Thirty-six percent travel by airplane. Among overnight business trips, 85% stayed in
a hotel or motel, which is up from 82% in 1998. (Source: Survey of Business Travelers)
• The number of airline passengers worldwide in 1999 grew by 3.8% over 1998, to 1.34
billion.
Corporate travel expenses are an integral part of every company’s budgetary concerns.
nc.
Sometimes, these expenditures are even unaccounted in the organization’s annual budget.
I
up
Travel and related expenses account on average for 7% of the total operating costs, which
ro
are escalating to be the second largest controllable corporate expense. Travel costs were
G
rising from 1996 to 1998 up to 13% and at the same time travel supplier commissions were cut.
ea
Where do these developments result from and who are the players in the travel industry? The
Id
ight
yr
Cop
travel market is not very transparent. The number of more than 125 airlines worldwide presents
that the existence of many market participants, such as hotels, airlines, wholesale and retail
travel agencies, and car rentals, makes the travel business very complex. The travel industry
was throughout the 1990s one of the largest industries. The fact that about half of all travelers
nc.
were business travelers indicates the importance of traveling for business purposes
up I
ea ro
(Farhoomand, 2001). The increased popularity of network organizations and a trend towards
G
outsourcing intensified the integration of organizations with their environment. Reasons to
d
yright I
travel are attendance at conferences, workshops and training sessions and visits of business
Cop
partners such as customers, prospectors, vendors, banks, logistical service providers, etc.
Employees undertake also necessary travels for doing business. This includes activities as
a part of mobile sales and services.
The travel market suppliers provide two main products which a business traveler
requires: transport and accommodation. In most cases travel service suppliers do not
directly distribute their services to the market. The services are sold to intermediary travel
agencies, who allocate demand and supply as wholesalers or retailers to their customers. The
c.
various travel services are demanded by organizations, which consolidate the need for
In
business travels of their employees. This demand is driven by the diverse travel purposes
roup
of each single business traveler. In comparison to leisure travelers, business travelers know
their travel details and need far less time, assistance and expertise from travel agents. Note
a G
the organizational demand is less elastic to prices and economic conditions and therefore the
e
ht d
profit margins are lower than in the leisure market. Profit margins in the business travel market
I
are only about 5% (American Express, 1999).
yrig
Several different trends can be pointed out within the business travel market. Tight
Cop
functional and financial relationships between suppliers and intermediaries characterize the
market. For example, travel agencies are since the 1970s functionally linked to service
suppliers via computer reservation systems (CRS). More than 70% of airline bookings are
Inc.
made through travel agents via CRS. The CRS with the highest market share, between 22%
and 27%, are Amadeus, Sabre and Galileo. They enable travel agents and travel service
roup
providers to market and sell travel around the world. In addition, over 100 airlines and other
technology of CRS (Farhoomand, 2001).

ea G
travel service providers optimize their internal operational requirements and use the modular
ht Id
The traditional supply chain and interconnections of the business travel market are
yr g
shown in Figure 3. But organizations do not necessarily purchase all travel services from
i
services suppliers. For example, organizations, in particular most government organizations,
Cop
tend to support their own car fleets. That means organizations disclaim external purchases
Traditional Supply Chain Travel Industry
c.
Accommodation Business traveler
n
Travel agencies
up I
Transport - Ground
Wholesaler
Market:
Supply
&
Organizational
demand Travel
Business traveler
ro
Transport - Air
G
CR
Retailer
Demand
policy
Business traveler
Idea
Food Services Business traveler
ightService Supplier Service Distributor Service Buyer End user
pyr
Figure Traditional Supply Chain Travel Industry
Co
332 Schallert
from car rentals if they reach the break-even point to support their own fleets. In conclusion,
dependent on their travel demand, organizations have to undertake classical make-or-buy
decisions. A major movement of the travel industry is based on the development of the
Internet. New technology offers organizations to purchase business travel services directly
In .
from the service supplier with increased buying power. The need for intermediary travel
c
agents reduces and therefore distribution and sales costs decrease. Buyers access directly
roup
the CRS of travel service suppliers and eliminate in this way parts of the legendary supply
chain. Organizations have recently tended to establish long-term relationships with either
a G
service suppliers directly or with selected travel agencies. The underlying purpose of fixed
e
ht Id
contracts is to reduce transaction costs due to the stability of the relationship. Organizations
want to ensure that travel suppliers are providing the most efficient, cost-effective travel
rig
services in congruence with their travel policies. Travel policies provide within each
y
Cop
organization the backdrop for undertaking business travels. Organizations set up travel
policies in order to streamline internally the need for travel in terms of purposes and expenses
and to facilitate travel management. Travel policies advise when and for how much cost an
employee is authorized to undertake business travels. This authorization is mostly dependant
on the employee’s position and responsibility.
Inc.
ro u p
e a G
ht Id
yrig c.
Cop p In
rou
e a G
h t Id
y rig
C o p
Inc.
roup
ea G
ht Id
yrig
Cop

Qualitative Research in Accounting &amp; Management

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Qualitative Research in Accounting &amp; Management

Uploaded by

Copyright:

Available Formats

Business Process

IDEA GROUP PUBLISHING

701 E. Chocolate Avenue, Hershey PA 17033-1240, USA 16#$%"

e a G Queensland University of Technology, Australia

without written permission of Idea Group Inc. is prohibited.

Figure 1. Business Objectives of CSA

The Business Objectives of CSA

SETTING THE STAGE Inc.

CASE DESCRIPTION: TRAVEL MANAGEMENT

Figure 2. Process Management Life Cycle

Project meeting protocol 24-05-2001, 2.00-3.00 pm

consolidating all data.

A: Interstate, 2-3 days, flight

B: Intrastate, 1 day, car

ht I planning booking reimbursement

1. Service Categories and Selected Services of CSA

yrig Information Systems

e a G Prefer booking of same hotel

Medium of receiving trip approval on Time supervisor takes for approval

up Inc. 4 several hours/

Copy phone email verbal

C rit e ria fo r ch oic e of a cc om m od ation

3. Travel Expenses Form

technology of CRS (Farhoomand, 2001).

Traditional Supply Chain Travel Industry

ightService Supplier Service Distributor Service Buyer End user

You might also like

Qualitative Research in Accounting & Management

Qualitative Research in Accounting & Management

701 E. Chocolate Avenue, Hershey PA 17033-1240, USA 16#$%"