American Express Corporate Expense Management Programme. Together we ll deliver more

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2 Background Business Requirements Design & Functionalities Demo Conclusions American * Amex1998 internal survey

3 Background Business Requirements Design & Functionalities Demo Conclusions American Purchasing Cycle Objectives Definition Information Gathering Analysis Strategy Tracking & Measuring Implementation Recommendation Negotiation Decision Process Services Contract Savings Quantification Market Intelligence Benchmarking

4 Background Business Requirements Design & Functionalities Demo Conclusions American

5 Background Business Requirements Design & Functionalities Demo Conclusions American Response Speed Independence from Experts Flexibility Explanaibility Embeddability Ease of Use Development Speed Computational ease Compactness Accuracy

6 Background Business Requirements Design & Functionalities Demo Conclusions American Data Warehouse I/O Data Trasnformation Engine Contract Contract Database Scoring Methodology Savings Quantification Contract Tracking Simulation & Optimisation Market Intelligence Positioning Maps Airline Competition Benchmarking Internal External Technical Meta Data Business Meta Data

7 Background Business Requirements Design & Functionalities Demo Conclusions American

8 Background Business Requirements Design & Functionalities Demo Conclusions American ROI 600% Efficiency Gain 300% Intelligence Density Ratio 5:1

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45 Air Deal Manager: American Express provides an End to End Purchasing Solution with SAS System. Dionino Di Florio (Purchasing Group Europe,American Express Services Ltd. - London) Marcon Giuseppe, Stroppa Emilio (Simbologica S.r.l./Up-Tecno Group SAS System Quality Partner - Italy) Abstract. The paper describes a SAS software application called Air Deal Manager developed by Simbologica S.r.l./Up-Tecno group (SIMBOLOGICA), an Italian SAS System Quality Partner, for the Purchasing Group Europe at American Express Services Ltd. London. The main objective of the application is to provide an end to end solution to manage the Travel and s purchasing management process in the air travel sector. Air Deal Manager automates most of the purchasing management decision support requirements to deliver new services to Amex corporate clients. The main features and functionalities of the application are: A European Database of airline contracts and airline transactions to allow MIS reports and Data Mining Embedded data quality analysis and reporting An electronic contract management module that computes airline Rebates and Discounts A Forecasting System of spend trends A complete Benchmarking & Summary Reporting system Statistical and graphical procedures to implement airline contracts scoring, A generalised procedure to produce graphical positioning maps based on advanced statistical techniques A methodology of evaluation of airlines discount policy structure using regression and graphical tools A simulation/optimisation model to provide optimal strategy of flight distribution to AMEX corporate clients, based on rebates/discounts computed for various what if scenario including external and internal exogenous factors Introduction Purchasing Group Europe at American Express provides consulting services to multinational clients across Europe on Travel and Entertainment spend management. A core expertise of Purchasing is to advise clients on the best ways to leverage spend in order to achieve T&E best management practices.

46 In this document we outline the business requirements to build the system, the system design and the data warehouse structure, we present a few example of the end user s interface and finally we describe the business benefits of using SAS to develop the software system. Business Requirements Travel and related expenses (T&E) is one of the major spend item (about 7% of total operating cost) for a sample of global and large national companies surveyed by American Express. T& E ranks as the third largest controllable expense among advertising, salaries and data processing. Air fares represent about 44% of the companies T&E spend, hotel expenditure are 24% and meals account for about 15%. American Express provides a wide range of services to manage T&E expenses more efficiently and effectively with particular focus on Air and Hotel spend. A new decision support system called Air Deal Manager has been developed for the air sector to provide additional services to Amex corporate clients through a fully integrated software solution. Table 1 contains a description of the purchasing cycle, the corresponding type of decision associated to each step of the cycle and the services that have been identified. Table 1: Type of Decisions and Services entailed in the Airline Purchasing Cycle Purchasing Cycle Type of Decision Services Provided Objectives Definition Choose between Savings and Spend Optimisation Travel policy review & guidelines package Data Gathering & Analysis Understand patterns of Saving quantification of current spending, evaluate contract contracts, contract scoring reports Conditions with existing suppliers Strategy Choose between available Saving Simulation and alternative suppliers Optimisation Scenarios Negotiation Negotiate better deals Guidelines to contract negotiation through contract scoring methodology Implementation Tracking & Measuring System Design & Modelling Choice of preferred carriers and travel policy, internal and external communication of choices Provide recommendations on travel policy and suggest preferred carriers Reporting on compliance to travel policy & carriers, internal and external benchmarking Air Deal Manager has been designed to meet the service requirements identified through the purchasing cycle and the underlying decision process. A number of software solutions to build

47 PC the system have been evaluated. SAS System has been chosen following the result of a detailed investigation and analysis on business requirement dimensions such as: Speed/Reliability of Response Time, Flexibility, Scalability, Compactness, System Portability, Embeddability, Ease of Use. The system architecture was designed to be embedded in a client server environment (PC Mainframe (MVS)) ; the system Data Warehouse structure is reported in table 2 and the system architecture is in table 3. Table 2 Air Deal Manager Data Warehouse Technical Meta Data Structure Description Business Meta Data SAS System Modules Data Access DB2 Clients data SAS/CONNECT Sequential files Benchmark data SAS/BASE External files Airline Schedule SAS/FSP Flown Data Transformation Data Quality Store Stats on SAS/FSP Engine Financial Model Data Quality SAS/BASE User s Interface DSS Contract : Store Rebates SAS/STAT Contract Editor and Discounts SAS/CONNECT Scoring Methodology Simulation and Optimisation Store Scoring Stats SAS/EIS Spend and Air Fare Forecasts Store Stats on SAS/AF Benchmark Data Analysis Benchmarking, SAS/ETS Business Meta Data Analysis Forecasts SAS/OR Visualisation Positioning MAPS SAS/GRAPH 3 dgraphs Reporting Data Quality Reports Savings Reports Compliance Reports MAINFRAME

48 Table 3 Implementation The system has been implemented in a Client / Server environment (PC-MVS) using SAS/AF to build the end user s interface. Figures 1 and 2 show the starting Frames of the SAS application. An innovative functionality of Air Deal Manager is the capability to manage airline contracts electronically through a contract management interface and the possibility to evaluate the contract terms and conditions through an original Contract Scoring Methodology. A few Air Deal Manager end user s interfaces are reported in the following pages.

49 Figure 1: Air Deal Manager Title Frame Results Figure 2: Air Deal Manager Main Menu

50 Figures 3 and 4 shows two frames in the contract management module, where it is possible to edit, store and retrieve airline contracts. Figure 3: Air Deal Manager: Contract Editor Results Figure 4: Air Deal Manager: Destination Country Selection

51 Figure 5: example of contract scoring methodology positioning map. Figure 6: Example of Positioning Map for Benchmarking

52 Business Benefits The main benefit of Air Deal Manager is a significant increase of internal productivity to deliver consulting services by reducing the time to process and analyse data from 15 to 3 working days. A further benefit comes from the capability of providing more sophisticated analysis driven by a user friendly interface that does not require any programming skills. Finally with SAS System it was possible to manage the whole information delivery process from data extraction to knowledge management.