In 2014 American Express took the bold step of spinning off its Global Business Travel (GBT) division, selling a 50% stake to an investor group for $900 million and setting GBT up as a separate joint venture. Creating a separate travel management company would allow GBT to focus squarely on the corporate traveler, a market that the Global Business Travel Association estimates will reach $1.6 trillion in spending by 2020. It also meant GBT could move faster and accelerate its growth by “funding meaningful advances in technology, analytics and service excellence” according to a press release announcing the move.
When GBT left the mothership it brought along many things — millions in capital, a trusted brand, an extensive customer base, and terabytes of historic customer data it could use to create new products and services. Just as exciting is what it didn’t bring. Namely, the dated, on-premise corporate systems that saddle and slow down many large companies — especially those that have been in business for a century or more.
Having a clean slate proved to be both a challenge and opportunity. It meant GBT had less than a year to select and stand up a dozen or more corporate systems to support its 12,000 employees and 5,000 contractors, operating in 30 countries. But it also meant the new organization wasn’t saddled with the sins of the past and could wholeheartedly embrace the cloud applications that had finally gone mainstream.
GBT formally announced its cloud-first strategy in May 2015 and the vendors it had selected for its self described transformation. This included Salesforce for sales, NetSuite for finance and ERP, Coupa for procurement, Workday for HR, and Jive for internal communications. Dell Boomi was selected as the underlying integration platform to bring together all these cloud applications, as well as the 25+ on-premise systems that held the bulk of GBT’s intellectual property.
It’s been nearly three years since the spinoff, and GBT Director Prasant Panicker and his team have now spent two years implementing and managing these applications. He explains how GBT’s cloud-first strategy has paid off in terms of accelerating the company’s growth and some of the lessons his team learned along the way.
The strategy pays off
One of the biggest benefits of GBT’s move to the cloud was simply making the company’s separation deadline. Panicker explains:
I think our biggest advantage was time to market. Typically, based on past experience with large corporations, it would take years to build out a platform across the globe, in multiple countries. By using proven cloud applications we could, for example, roll out our procurement application within three months across all 30 markets. Our retail platform was even done within three months as well.
Since cloud vendors automatically push new features and security enhancements directly to the application, GBT is also able to keep its applications fresh and current without requiring a ton of resources to purchase, install, download or update new software versions. Because it uses Boomi’s integration platform-as-a-service (iPaaS) to mediate connections between systems, the team can stay on top of any changes when connections need updating.
As a rule we do not allow point-to-point integrations. Having it all centrally managed, having an inventory of all integrations helps us. If something needs to change we know that it feeds into X number of downstream systems, that X number of systems need to also change.
With past companies [if this were to happen] an email would be sent to all application owners, they would have to respond back saying ‘yes, I’m impacted’, then reminders would have to get sent, then you’d wait. It’s a very tedious process. It could typically take four to six weeks.
Panicker points to the company’s integration strategy and technology as one of the core tenets of its cloud strategy. The iPaaS system, along with the pre-built connectors that come with it and the best practices that Boomi feeds back in using encrypted metadata, makes it easier for Panicker’s team to onboard future applications as the company expands globally or acquires new companies.
Lessons for a cloud-first strategy
Large scale global implementations are never easy, but Panicker believes the approach GBT took helped set it on the right path. First and foremost is GBT’s strategy to configure, not customize its cloud applications.
I think a lot of the speed, time to market was due to staying true to our principle of no customizations. We were able to standardize processes across countries as well.”
The more you can standardize your process the better, not just from an initial investment but also ongoing costs of both maintaining the applications and then also making sure they are correct. Any homegrown application usually can’t keep pace with some of the cloud applications that keep continuously refining and updating. You know that with a cloud application you can enforce a common set of factors across the globe.
Many companies, especially those that have been in business for a while, have a hard time avoiding the itch to customize a new application to existing processes. When I asked Panicker how he stayed true to that principle of no customizations, he had this to say:
I think we had strong program management and leadership buy-in and support at the highest levels for the strategy. Our priority was to get things set up quickly. We’ll focus on building out our capabilities where it differentiates us, where it’s travel specific. Where it doesn’t differentiate us, we do not make any specific changes to the platform. We didn’t give too many options to people.
Although GBT is vocal about its cloud-first strategy, it isn’t religious about it. The company still has a number of on-premise applications specialized to the travel industry and its business.
We’re investing in building the capabilities that distinguish us in this space. A lot of the systems will be on-prem because of the data sensitivities. It’s customer data, travel data, so we need to make sure that we have all that in a very controlled environment. It also depends on how we interact or interface with the customer. If it’s something that allows interfacing with the customer with minimal information that we need to share outside, we don’t mind putting it in the cloud.
For its cloud applications, Panicker and his team had a fairly simple selection process. They started with the leaders, picking the top three vendors in their respective categories. The team would do a week long proof-of-concept and a technical evaluation that included factors such as integration support, security, performance, scalability, ease of development, maturity, customer service, and so on.
When asked if this kind of cloud-first approach would have been possible a few years earlier, Panicker had this to say:
I think the timing was good for us. We didn’t have any legacy values to bring along with us. It was a good time in the market. Maybe two years before that the different technologies may not have been fully matured by then.
Cloud computing has matured immensely over the last decade. According to recent Intel Security research, cloud services are now utilized by more than 90% of organizations around the world, with many “working under a cloud-first philosophy.” However most companies are still implementing cloud technology piecemeal, often because they simply can’t abandon their legacy systems, data and thinking.
This barrier can give a real leg up to startups that can begin with a clean slate. Older, entrenched companies are also finding ways to make the shift so they too can consume the benefits of the cloud. While few global companies will be wholly in the cloud in the next few years, GBT’s story is proof that a cloud-first strategy can pay off if one takes a thoughtful, practical and long-term approach.