Amex To Combine Online, Offline In Global Restructuring

American Express Business Travel earlier this week revealed plans to combine its online and offline divisions as part of a global restructuring that involves undisclosed cost reductions."It's a merging of operations similar to the 'best in class' approach we took with Rosenbluth International," said vice president of global corporate communications Alicia Klosowski, referring to last year's acquisition of the Philadelphia-based travel management company. "If there are similar positions, we'll look at the talent and the best talent will remain in the positions."Klosowski said that more detailed communications about cost reductions have not been shared with employees and noted that, "as we globalize the business, we need to understand how to best structure it and look for opportunities to streamline. So we will look at all components of cost."In an October 12 memo obtained by The Beat, Amex outlined its "Playing 2 Win" transformation, highlighted by an evolution of the general managers' roles to include online operations. North American executive vice president and general manager Pamela Arway and senior vice president and general manager for Europe, Ron DiLeo, were among the letter's five signatories who serve as general managers.According to Klosowski, online-oriented client wins are becoming as commonplace as those generated offline. She said benefits from the combination include operational synergies and economies of scale that help enable low transaction prices, as well as an accelerated process for bringing new and existing clients online.Amex is creating a new global structure for operations, marketing, supplier relations and corporate communications--like it had in the past with the sales team, run by Andy McGraw. Paraphrasing DiLeo on how this impacts communications, for example, Klosowski said, "We want to be able to start a sentence in one country and finish it in another."In addition to Klosowski, other new global functional leaders include Priyan Fernando in operations and Andrew Winterton in supplier relations. Amex is seeking to fill global vice-presidential positions in reengineering, solutions development and marketing. Mark Webb will continue to head the global corporate group that services Amex's largest business travel and corporate card clients."With key functions taking a global position, it now allows the regional and country GMs to have an increased focus on the customer while still having total business profit-and-loss ownership and accountability," according to the memo.The end of the Global Interactive Travel Group follows success that Amex said "helped propel us further into the global arena and combat the fierce competition of the Online Travel Agencies. It is time to take that transformation to the next level and fully integrate our online business into everything that we do. It needs to be a holistic thread weaved into the operational fabric."Klosowski said 32 percent of transactions in the United States now are processed online, as well as 20 percent in both Australia and the United Kingdom. "We have seen a staggering 310 percent increase in online travel bookings across our client base in Europe over the last twelve months," she claimed. "American Express Business Travel booked 40 percent of all the online business travel transactions across the globe in 2003."She revealed first-half 2004 year-over-year online transactions growth of 213 percent in the Nordic region and the U.K. respectively, 144 percent in France and 143 percent in Germany.