The More They Travel, The More They Save

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November 10, 1997

The More They Travel, The More They Save

Guardian Industries automates T&E accounting

By Charles Waltner

hen Guardian Industries grew tired of picking up the tab for its antiquated approach to travel-and-entertainment expense management, it got some help from a software package.

Guardian, an Auburn Hills, Mich., maker of flat-glass products for autos and construction, was spending up to $13 every time it processed a paper-based travel-expense report. That put Guardian among the least efficient companies for that business function, according to the Hackett Group, a management consulting firm in Hudson, Ohio.

So last October, Guardian decided to trim its bill for T&E expense reimbursement with help from Portable Software Corp. in Redmond, Wash. The vendor makes an automated enterprisewide client-server package called Xpense Management Solution (XMS). It's a sort of Quicken for corporate travel spending.

The result: Guardian not only streamlined its accounting methods and slashed overhead, but by consolidating all travel-expense reports into a data base, it also gained insights into its travel practices that were impossible to obtain with paper records.

Another quick benefit: Guardian is winning instant returns on its investment in negotiations with travel-service suppliers such as airlines. With concrete proof of its spending volume from XMS reports, Guardian has won more generous discounts.

Guardian, which is undergoing a comprehensive reengineering initiative, targeted its travel-expense management as a way to reduce activities that weren't adding to the bottom line. "We were preparing expense reports and getting nothing back," says Curt Castillo, Guardian's tax administrator and a co-manager of the XMS implementation.

Guardian turned over control of the project to the accounting department rather than its IS group, mainly because accounting understands the close relationship of tax issues to T&E reporting. But the IS department worked with accounting to implement the software. IS provided technical support, including installation of the serv er and troubleshooting.

Jeff Knight, chief financial officer of Guardian, claims deploying XMS was relatively inexpensive compared with other enterprise network projects-but he won't reveal the exact cost of the implementation. Portable says that licensing fees for XMS start at $150 per seat and are discounted by volume. A total XMS implementation runs from $100,000 to $750,000, according to the Meta Group in Stamford, Conn.

Also, XMS required little additional hardware. Guardian bought only a few client PCs and one low-end Windows NT file server. One big challenge for Guardian's IS department was deploying the XMS clients to the company's 1,200 user desktops. Guardian won't finish this task until March, Castillo says.

Guardian runs 40 production facilities around the world with 13,000 employees. About 1,200 of its staff members travel to remote factories for maintenance and management checkups, and to visit customers.

In an agreement with First Bank Visa-one of the largest U.S. corporate-credit-car d issuers-Guardian has given its travelers a Guard Card for business-related purchases. Billing information from these Guard Cards is electronically downloaded from First Bank into employees' Lotus Notes E-mails. Employees then transfer that information-known as prepopulated files-with a few mouse clicks into their XMS travel reports. The prepopulated files contain most of the accounting work employees had to perform with paper-based reports, including converting foreign-currency purchases into dollars.

Eileen Crabtree, a network administrator at Guardian who helped with the deployment, says XMS was easy to work with once she became familiar with its design. XMS performs all calculations and partly automates the categorization of expenses, helping avoid reporting inconsistencies. Castillo estimates XMS has pared the accounting department's work on T&E reports by 80%.

Convenience And Savings
XMS has made life easier for Mike Bellaire, a Guardian infrastructure support manager. Bellaire spends as much as 60% of his work time traveling, and he says the prepopulated filing feature spares him the fuss of reconciling receipts or calculating exchange rates. "It's the difference between the Stone Age and Jet Age," Bellaire says.

XMS's streamlined travel-expense management process has also boosted cash flow. Employees file just once a month-XMS can categorize expenses by trip or any other factor-and Guardian sends payments to First Bank at set times twice a month. Guardian has made this process completely cashless with EDI transfers.

A huge benefit of XMS has been its reporting capabilities. Guardian negotiates volume discounts with airlines, hotels, and car rental companies. Previously, Guardian was unable to readily pull together consolidated spending figures on most of its travel, so vendors had the advantage. "Before, they said what they thought we spent and told us what they could do," Castillo says. "Now we can do better than guess."

Armed with detailed information on its travel spending, Guard ian earned back the money on its investment in XMS from its first negotiation with an airline. CFO Knight says he anticipates XMS will "easily" save his company 5% to 10% annually in direct and indirect costs associated with corporate business travel, adding up to more than $1 million a year. "I don't think travel-expense management is a change-your-destiny type process," Knight says, "but it's traditionally a convoluted one with clear inefficiencies we were able to exploit."

Moving expense reporting into a database has helped Guardian's managers, too. Tom Hecker, an operations support manager, says searches for spending anomalies from his 60-person staff used to take a few hours. Now, with XMS, the task takes him only a half-hour.

XMS has also helped systems manager Patricia Olesek budget more efficiently. For example, by looking at historical spending records, Olesek can determine whether it would be cheaper to send two staffers to work for one week on a project or one person for two weeks. "There's a l ot of analysis you can do now that we have it all in one report," she says.

But implementing XMS hasn't been simple. Castillo and corporate accounting administrator John O'Reilly initially spent several months hashing out a new policy and standards. "Without a policy and standards, you've got nothing to automate," Castillo says.

One of Guardian's biggest challenges was selling the new system to members of its work force who were less than comfortable with technology. Castillo says XMS education fees were among the biggest expenses incurred in the transition (see related story, " All Aboard For Training ").

Guardian wants to extend the project. XMS is currently available only to U.S. employees, but Guardian plans to deploy an updated version to its staff overseas. The company is also searching for a credit-card issuer who can provide cards denominated in multiple currencies-that is, one bank that can issue franc cards to Guardian's Luxembourg-based travelers and peseta cards to its Spain-based travelers.

See related story, " Portable Stands Alone -- For Now ."

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