Company

The Blues Company is the largest North America Entertainment Company with over 40,000 employees of which 18,000 of them will have travel expenses. Blues Company has locations in over one hundred places across the continental USA. The Blues Company has 4000 sales employees who have remote access and work out of their office. At this point, the current travel system is only for the United State employees.

The Blues Company spends approximately thirty-seven million dollars in travel expenses. Travel continues to grow at a five- percent rate each year. The Blues Company wants to better manage and control its travel expense. The company is convinced with an automated system, better system controls and better management reporting they can save 6.7 million dollars.

A new travel manager has joined the Blues organization. He reports directly to the Finance director who has been given two choices -- either better manage travel expenses or start to look for a new job.

The current process is for the Blues employee to complete his/her travel expense form, have his/her supervisor sign the expense report and forward it to the travel department.

The travel team then inputs approximately 25,000 expense reports a month, 1250 a day. Each report takes ten minutes to input. It takes 26 employees to complete the input with an annual salary of $50,000. The current system is an old mainframe system with limited capabilities.

The Blues Company travel manager cannot take any chances. He found out that his good friend Professor David Lee is teaching a class at one of the finest universities in the United States. He needs a solution that will save his job. His good friend David Lee said that his 422 class is so smart that they will design the award-winning system. Since David Lee does not want to take any chances, he is going to have all teams work on the same project. However, only one project team will win the award. Each project team will have the opportunity to rate the other project teams.

Requirements

The new system is expected to reduce operating costs, streamline administrative, leverage existing technology, support corporate practices and policies, track reporting and satisfy employee needs.

For each expense report we must classify the business purpose and start and end date for the TRIP -- would like to classify TRIPS to determine where we are spending our travel dollars. We do not want the Travel department to enter the expense reports so there must be a streamline-input solution. This project will not address relocation expenses or travel planning. The project team will not address approvals. These will be addressed as a phase II item. The expense system is for Blues Employees only, not contractors. We will no longer allow cash advances, so it is important that the expense report get process as soon as possible so that the employee is reimbursed for his/her expenses. The employee will have both cash and credit expenses.

Standards

It is important that we track travel expenses versus the industry average. The DJLC Company will provide us with an annual file that has travel expenses by city for hotel, car, and meals. So, the expense-input facility must provide the capability to capture expenses by day by city. The DJLC file is by city code, state, country, year, expense type, and amount. The amounts for international companies will be in US dollars using the average currency rate. The amount on the file is the average daily rate,

The project team is responsible for defining the expense types and categories. For example, expense type might be airfare and the category the different air lines. Another example might be supplies and the categories the different kinds of supplies We will only have two levels of expense classification.

Ground Transportation - We need to know the type of ground transportation. If it is by car, the person will input the mileage and the system should calculate the amount based on the Government approved rate.

Airfare - The person should list the name of the Airline. Since we have an agreement with Air Express, we need to track the airline people are flying so we can negotiate better rates with the airlines. The same applies to car rentals and lodging.

Meals - It is important that the traveler distinguish between breakfast, lunch, and dinner. If the person does any entertainment, the place of entertainment, people attending, and amount needs to be captured.

Telephone - We need to capture the different telephone expenses to determine home, car, billing card and public phone.

Additional categories -- the project team should determine if we should capture expense for any other travel expense category such as supplies, flowers, or training.

Personal expense -- items of personal expense are not reimbursable unless they are in connection with customer entertainment

The project team will develop a proposal for expense reporting approvals. It is important that the process be as streamlined as possible. The person should be able to start a report and finish later. The person should submit the report after all information has been entered. The project team is responsible for identify and creating forms. It is only necessary that the supervisor review the report either before or after submission. It is not necessary to wait for supervisor approval before processing.

Also included in this project is how the expense report is routed, reviewed, and stored. We were given approval by the audit department for the travel department to randomly review at least 15 percent of the expense reports. There are certain people who will have their expense reports audit all the time. They include officers of the company, people who chronically fail the audit and people whom supervisor asked them to be audited. The new system must provide the capabilities to track the audit points failed and report to management. The project team will define the audit points and the audit review process. For tax reasons it is important that all expense reports end up in the travel department along with the associated receipts. Whenever possible the policy violations should be automatically flagged as expense reports are entered, so users are made aware of violations immediately and everyone avoids the time-consuming correction loop.

In the event the employee has international travel, he/she will convert to US dollars and enter the expense report. The travel department will take into consideration currency fluctuation when reviewing the reports.

Each location has wide area network access to the main computer. The Sales Force can dial into the main computer and work at a remote site.

Interfaces

EPS HR/Payroll system. It is important that when a person becomes an employee of Blues Corporation that the person information is entered into the travel system. Any updates made to the EPS HR/Payroll system are applied to the travel system. A key requirement is to determine which fields are to be fed from the EPS HR/Payroll system versus input required in the travel system.

Bank - Payments will be made to the person's EFT account. We can use either the Payroll EFT or a special travel EFT set up for the employee. We will not allow cash advances or pay expenses by check. Every night we will send a file to the bank. Since the employee completes the expense report it is not necessary to send the employee a notification that the expense report was direct deposit.

DJL Express - All employees will be issued a Corporate Credit Card - so it important that the system allow the users to distinguish between credit card charges and cash expenses. Twice a month we will send a file to the credit card Company. In the event the employee violates corporate policies the privilege of having a Corporate Card will be revoked. The Corporate Card will be in the employee's name, so it is important that the employee expense report is processed as quickly as possible to avoid finance charges.

General Ledger - The General Ledger system will be fed from the travel system monthly. The information must be aggregated at the GL account level. The GL account has two parts. The first part is the Cost Center which department is to get the expense. We should get the Cost center from the EPS HR/Payroll System. At the time of inputting the travel expense the person should have the capabilities to override the expense. The second part is the account the type of expense. In the travel system, each expense type will have a general ledger account. For example, airfare would have an expense type of 01, car expense would be 02, lodging would be 03 and so forth. It important that the appropriate debit charge is made.

The employee expense report should be saved for later selection, reviewing and printing.

Every two years expense reports should be purged from the system in April. The project team will need to determine how to keep the system up to date and develop a strategy for purging old records.

Controls

Ensure that the same report is not entered more than once.

No report can be entered more than once for the same day.

There should be limit checks on key expense categories.

There should be controls on what goes to the bank and American Express

Expense reports for terminated employees need special processing.

Nonemployees will not use the Travel Expense system

It is important that the proper level of security be maintained

Limits on the amount that can be EFT to an employee account

Password protection for individual users

The project team will need to add their own control points

The travel department will audit the travel expenses. The project team will identify the audit points and develop a process to track and report audit violations.

The project team should define the system backup requirements.

Reporting

The project team will develop a proposed set of reports. There should be an audit listing, control reports, metrics, and management reports. Management reports need to distribute to the person responsible for each cost center. We need to create Management reports monthly. There should be reports that allow us to do, analysis on travel expense.

HOMEWORK:

Your homework will build a PowerPoint presentation. There

1. Explain to the organization what Change Management is
2. Document to the Organization the type of change that will happen to:
   1. Employees
   2. Management
3. Develop a Change Management Phase Program
   1. Show a picture with all five phases (see below)
   2. Work through the five phases ( Awareness, Understanding, Commitment, Move to Action and Internalized Change.
4. Explain the content/activities in the Change Management Phase Program
5. It is important to indicate what is the content and/or purpose. For example, if you say build a Flyer what is going to be on the flyer.

Change Management Plan Sample Phase I: Phase II: Phase III: Phase IV: Phase V: Awareness Understanding Commitment Move to Action Internalized Change Sept 14 Jan 15 Mar 15 Jun 15 Sept 15 Sept 16 . All Team Meetings . Spotlight Articles . Orientation * Touch point Sessions * Brown Bags * Global Focus * Org Announcements . Road show . Training * Quarterly Audio- Groups . Welcome Letters . Launch Intranet Site * Measure Progress conferences . New Mgr 1:1 . 2 Way Survey * Measure . Manager Toolkits . Focus Groups Progress . Measure Progress . Bi-annual 2 . 2 way survey way survey Change Training Track progress Project Kickoff Management & Assessment & Analysis Job Transition Guides and course correct Communication End Users participating Plan In Design Sessions Manager Toolkits Development Organization Alignment