1996 Spring ACTE Quarterly: President's Message | Process Mapping |

One of the offshoots of the re-engineering movement is a technique called process mapping, a.k.a. activity-based cost analysis. At its most basic, process mapping is "understanding at a very detailed level what people do to get certain things done," says Michael Zeisser, senior engagement manager at McKinsey, the management consulting firm. "It's an intricate look at the types of activities people perform, the decisions they make, and, very importantly, who is involved in bringing things to closure. For instance, taking a look at things like hand-offs--where the responsibilities of one person end and another begins," he told ACTE Quarterly.

All sorts of companies in all sorts of industries benefit from process mapping. Mail order companies use it to evaluate the handling of returns. Southwest Airlines studied pit crews to see if it could learn anything about airline turnaround times. Insurance companies use it to study the claims process, and will follow the paper trail left by a claim from the moment it is filed until it is resolved. The "map" itself, which describes the process of claims adjusting in minute detail, often takes the form of a flow chart superimposed with lists of functions performed by everyone conceivably involved with a claim. The map is a graphic representation of the often-convoluted relationships between customer and insurance-company employee. It shows who does what when, and with whom.

Once the map is drawn, an analysis is made of all the costs involved with each step of the process. Those figures are studied with an eye toward simplifying efforts, improving efficiency, and reorganizing decreasing or eliminating steps. At the end of process mapping, you've established a model, where activities become variables that can be manipulated in various what-if configurations. These scenarios then allow you to predict the operational and financial implications of any change or a combination of changes in whatever process you're scrutinizing.

Mapping the Travel Process
While the technique of process mapping has been around for five or six years, interest in it in travel management circles has grown noticeably in the last year, when commission caps triggered profound changes in the traditional relationships among corporations, suppliers and travel agencies. "If you're making across-the-board changes in something as fundamental as the way you work with your travel agency," suggests Earl Foster, ACTE president and travel manager for Hewlett-Packard, "it makes a lot of sense to analyze every part of your travel process, too. It's time-consuming and very detail-oriented work, but it's an essential part of the re-engineering process."

Foster isn't exaggerating about the time involved. The mapping part can take months or longer. It's painstaking work, identifying everyone who's involved in the corporate travel process, developing questionnaires and conducting interviews and focus groups. "You have to consider all the players inside a corporation who are involved--including relevant departments like shipping and receiving, human resources, and risk management. Plus, you have to look at suppliers and their staffs. Then your own customer: the manager who signs the bill for corporate travel, plus the traveler." Added Foster: "You also have to formulate a way to elicit the right information to identify in minute detail every step involved in every action, analyze the reason for the step, determine the cost of every step, and run a lot of what-if exercises to see how changing one or a few steps impacts the other elements of the process.

"You have to ask, 'does your customer still want you to do what you're doing, and are they willing to pay for it? What are we doing well? What would you like us to continue doing? What would you like fixed--and is it a tweak or something major?' We looked at process mapping as a way to perfectly understand what we were doing and what our customers thought we were doing," Foster said. "We weren't necessarily on the same page, and the process allowed us to get in sync."

Once Foster elicited all of this information, however, the real work began. "The object isn't to make the map," he said. 'The object is to re-engineer. You use the map as a tool for a 'process owner'--someone you've assigned to turn the map into the next phase of the re-engineering project. Obviously, if your re-engineering vision isn't well defined, even the most meticulous map isn't going to help. It's essential, once you start implementing change, to refer frequently back to the map and the managers you originally interviewed and continue to use them in the loop. Tell them, 'This is what I intend to do--am I on the right track?' Or, 'This is what I heard you say--did I understand you correctly?' Only then can you continue with any confidence."

Micro Mapping
Other companies are taking a more micro approach, process-mapping a single travel-management function. Analyzing the reservations process is becoming more common as many companies are moving toward fee-based pricing arrangements with their travel agencies. "Before you can determine pricing parameters for agency services, you first have to analyze what your travel agency is doing, why they're doing it, and why they're doing it that way," says Bob Brunner, travel manager for Philips Electronics.

To analyze the reservations process "from start to finish," Brunner solicited the input from travel managers from various Philips departments, representatives from Philips' eleven reservations centers and Philips' agency, Rosenbluth International. "I thought it would be a straightforward procedure, but it turned out to be unbelievably complex," Brunner said. And lengthy. What he thought would take a few weeks has dragged into four months. "It took us that long just to get an accurate view of what we were doing," he explained. And that's just in the data collection stage. The actual map hasn't been completed yet. "Now we're seeing what's costly, and looking into how making changes will help us save money. We're making little P&Ls; for each reservation, to see what Philips should be doing, what the traveler should be doing. Who, for instance, should make limo reservations? What about Amtrak? Should the agency continue to make courtesy reservations for Philips employees? Should frequent flyer points be part of the reservation process?"

The complexity of the exercise has been a bit of a surprise, but what Brunner has uncovered has been worth the effort. "Once we started digging, all sorts of interesting things came out," Brunner said. "The first being that we all had different conceptions of what happened when you made a reservation. Different divisions had different procedures. We also found out--to our amazement--that there are some divisions still requiring written authorizations for domestic travel. Our policy doesn't require it anymore--and it's an incredible waste of time for travelers and res agents to act as a kind of meeting planner. It's hardly an efficient way to plan a meeting. Or use a res agent. And just think of all of that purchasing power wasted."

It's not just corporate travel departments that are process-mapping. Airlines are doing it to streamline unwieldy distribution costs. Car rental companies are process mapping to determine the profitability of one-day rentals. Travel agencies are process mapping to determine where technology products can help them keep staff counts down without sacrificing quality.

Travel agencies are also performing process-mapping exercises on behalf of their clients to show how changing corporate-travel practices can result in more efficient use of time, money and manpower.

Travel One, the mega agency based in suburban Philadelphia, performed an internal study of its customers and their various travel behaviors--information it uses when recommending certain kinds of technology products. "We looked at things like how much time it takes from the moment a traveler decides to go on a trip to the time he or she gets on the airplane," said Vice President of Marketing Andy McGraw. "For each one of those steps, we analyzed the cost to the company down to the penny, to see where there's an opportunity to squeeze costs." Travel One came up with 75 events that may be involved in the reservations process alone, among them gathering flight information, making a booking, changing a reservation, producing a boarding pass, submitting documentation to ARC, accounting costs, and expense reporting costs."

What Travel One unearthed was a real attention-getter. "Typically the cost to a company to make a reservation was more than eleven dollars," McGraw said. "The average travel arranger called 3.5 times for flight and fare information. Tickets usually were changed at least twice. Before a typical trip is made, there are on average four nonrevenue-producing transactions.

"The same reservation made through an e-mail process, on the other hand, costs two dollars," McGraw said. That's an enormous jump in efficiency, for the company and for the travel agency."

Caveats
In theory, process mapping is extremely useful. In practice, well, that's another story. "The complication," says McKinsey's Michael Zeisser, "is that it's a very strenuous effort," both in terms of time and resources.

"It may take three or four months just to analyze a single process," Zeisser continued, echoing Philips' experience analyzing the reservation process. "By the time you're done, the process may have changed. There may be a new computer system, or an executive has left who had played a big role, or a new service policy may have come into effect during the analysis. Then you have to do it all over again."

Zeisser also cautions against excessive zeal. "Some companies rather ferociously attack the process and have a lot of information they don't exactly know what to do with," he warned.

"And after a while [the information] loses its value, so if companies wait too long they've done it in vain."

What to do? Instead of reaching for 99% precision, go for 80%, and cut the time involved by a factor of 5 or 10. "That's enough of a benchmark to give you sufficient data to understand where you spend money," Zeisser said.

Second, enlist the right people to help you in your quest for solutions. "Make sure you enlist the people involved in a hands-on way in the process. For travel agencies, that would be reservationists. They know very well where the bottlenecks are, but hardly anyone asks their opinion on ways to do things differently. They may have five or six ideas about efficiency, and two will be feasible and useful."

Third, do process mapping for the right reasons. "The trick is not to get caught in the exercise and do it for its own sake, but to find what you're looking for--a way to see objectively whether you're performing what you'd like to perform, and not wasting time, resources, money."

In the case of Hewlett-Packard, process mapping is part of a massive re-engineering effort that will ultimately transform the travel department, "not just to make it more efficient today but to develop the next generation of travel policies," said Earl Foster. "What we do tomorrow won't even resemble what we do today." AQ

1996 Spring ACTE Quarterly: President's Message | Process Mapping