In 2013, Daimler head of travel management Bernd Burkhardt
summoned senior executives from four of his long-standing service providers to
the automotive giant’s headquarters in Stuttgart, Germany. He had brought
AirPlus International, Amadeus, BCD Travel and SAP together, he told them,
because he wished to share an ambitious vision.
One Trip Option: That’s It
Now known as FiveStar, the concept Burkhardt proposed that
day simplified the entire trip planning, booking, payment and expense
management process to just three clicks and three minutes of work for the
traveler. Click 1: The traveler confirms on a mobile app where he or she wants
to travel, when and what combination of air, hotel and car rental he or she
requires. Click 2: The app returns not dozens of itinerary options but just one
single trip recommendation, and the traveler approves it. Click 3: The traveler
approves the expense report after the system has centrally and invisibly
handled payment for the trip.
Five years, several setbacks and much product development
later, that vision is becoming a reality. SAP bought Concur and dropped out of
the project early on; Amadeus, on the other hand, bought and switched to the
Cytric booking tool but stayed in the project, forcing some rework but
incorporating a more capable tool. The original vision lived on. This year, the
platform emerged from “user experience” tests in the U.S. and Canada, and come
2018, Daimler will roll out FiveStar to its Mercedes-AMG division in Stuttgart.
Burkhardt also hopes to pilot voice-activated bookings next year. Assuming all
goes well, it will roll out globally after another eight months.
Burkhardt isn’t looking to transform Daimler’s program
alone, however; he wants to show the industry a path forward. “We saw the
project had the potential to become an industry standard,” he said. “There may
be other ways to get there,” he added. “FiveStar is one way, and we all need to
move in this direction.”
Simplicity & Trust
Yet it takes a lot of complexity under the hood to create
ultra-simplicity for the traveler. The biggest challenge has been developing
technology that travelers will trust to deliver the single trip option with the
best available product at the best price. FiveStar uses algorithms that crunch
together policy, price, personal booking history and colleagues’ preferences to
create the optimum fit. The need to handle expenses is avoided by deploying
centralized payments. Air and car rental transactions are paid for through
Daimler’s AirPlus lodge card. Hotels are paid for with automatically generated
AirPlus A.I.D.A. virtual cards, which ultimately also are settled through the
lodge card.
Burkhardt knows that building trust with travelers is the
issue on which FiveStar will stand or fall. “Compare it to Google, a business
model based on trust,” he said. “No one thinks there is a better source for the
information or mistrusts what Google is saying on page 1 or 2 [of its search
results] and should pay attention to page 9 or page 12 instead. We should think
the same way.”
He added: “In today’s world when we have all the data and we
are thinking about algorithms, machine learning and artificial intelligence, we
can make it happen if we know everything about our travelers and their travel
patterns and preferences and we know our travel policy as a corporation and our
needs when it comes to the question of safety and security. This could be a
long journey, but we are learning step by step. It could be the first try won’t
fit 100 percent or even the third try. It may be the fifth, but we need to step
into that world.”
The enormity of the challenge also explains why Burkhardt
felt compelled to act with partners, seeing himself as a conductor “standing in
front of the orchestra” of his service providers. “I strongly believe that we
really need to be disruptive in the travel industry—not continuous improvement,
not creating another app, or online booking tool—but really being disruptive,”
he said. “This will only happen if you bring partners in the value chain
together. The problems are too complex today to solve them in silos.”
Total Cost of Ownership
The underpinning philosophy for Burkhardt, who reports to HR,
is that the true total cost of ownership of travel is often overlooked or
misunderstood. Daimler employees undertake 500,000 trips a year, and Burkhardt
estimated conservatively that booking, paying and expensing each trip takes
half an hour. Pricing employees’ time at €100 per hour, that’s roughly €25
million of lost productivity each year.
“From our perspective, it was time for digitalization of
business travel,” said Burk-hardt. “We thought the only thing a traveler should
have to do in a digital world is to say where they need to go to and when they
need to be back. There is no hassle, no struggle, no administration. We can
reduce their administrative efforts down to zero. It’s not a question of making
a 10 percent or even 60 percent quicker process. It’s really about eliminating
all the administrative efforts.”
A Global Support Structure
It isn’t the first time Burkardt has attempted to break the
mold. A Daimler employee for more than 30 years, he joined the travel team in
1998 and was one of the first to create a global travel program with a seamless
and automated end-to-end process from booking through payment and expense
reporting to data upload to the company’s enterprise resource planning system.
Daimler operates a policy of “one” wherever possible: one
travel management company, BCD in 52 countries; one payment provider, AirPlus
in 40-plus countries; and “one travel process for all Daimler employees
worldwide.” Having a global process, Burkhardt explained, is “part of our
culture. We do not differentiate if we are working in Stuttgart, Bejing or
Tokyo. It’s all the same.”
This cultural DNA of conformity explains why presenting a
single option to travelers can work at Daimler in a way that it might not at
other companies (the fact that 80 percent of trips are routine travel between
company locations also helps). While the uniformity might sound controlling and
as process driven as the company’s car production, changes are afoot.
In particular, Burkhardt regards the all-important question
of trust as a two-way street, with the employer also needing to show faith in
the employee. Within Daimler’s travel program, this trust is manifested by the
total elimination of formal pre-trip approval processes. “Every traveler has to
talk to their supervisor about the need for their planned trip, and that is
enough,” Burkhardt said. “That’s essential to our corporation because we have a
program of cultural change, and travel is showing the whole organization that
we really mean we are changing to a basis of trust.”
Remaining Focused on the Traveler
With the Daimler travel program oriented ever more firmly on
traveler management, attention has shifted away from supplier management in
recent years. Airline deals are now negotiated only for long-haul routes, and
Daimler has outsourced hotel negotiations to HRS. Daimler provides HRS with
rate caps and its likely demand patterns, then leaves the hotel specialist to
get on with it.
One of the main reasons Burkhardt chose to outsource
accommodation management was to gain context. Judging whether a rate reduction
of 3 percent is good or bad is difficult without “knowing how the market has
developed or the details of what other companies are getting,” he said.
Burkhardt also prefers to use a specialist because Daimler continues to
globalize its customer base. “Our fastest-growing market is China, and we
aren’t just going to Beijing. We are visiting cities in the middle of the
country I have never heard of before. I have no clue about the hotel landscape
there, and my procurement guy has no clue, either. In this part of the
business, you need experts; otherwise you are lost or it costs you too much
internal involvement.”
Shedding traditional supplier management duties is therefore
liberating Burkhardt to get on with his work of liberating Daimler travelers to
get on with their work. This is ultimately why he is confident FiveStar’s
three-click proposition will prevail. “We believe that having such an
easy-to-use process will make our travelers want to use it,” he said. “If they
follow the company standard, it’s the easiest way to travel, and the easiest
process will win. We should really jump into this. Then we have an opportunity
to conquer the world.”