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C
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Founded in 1876, Ericsson (Telefonaktiebolaget LM Ericsson) is a Swedish multinational provider of communications
technology and services. The company is headquartered in Stockholm, Sweden and looks to use innovation to
empower people, business and society.
T
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Historically, Ericsson worked with 61 commercial card suppliers around
the world. Each card programme was accessed and managed in a
myriad of different ways and there were significant differences in terms
and conditions, resulting in a convoluted administrative process. In
addition to this, the back-end processes were fragmented, hampering
efficiency and making payment settlement complex.
Managing relationships with these 61 providers was also a time-consuming
and cumbersome endeavour and a lack of scale in programmes with
many providers resulted in higher costs through inconsistent card fees
and FX charges on outbound transactions. It also meant that Ericsson
had no consolidated reporting and no global view of its programmes,
meaning that the huge volumes of data produced around spend per
supplier and employee travel behaviour were inaccessible. As a result,
Ericsson could not use this information to produce benefits for the
company, such as negotiating improved terms with suppliers. Moreover,
as Ericsson’s spend was fragmented among multiple card providers, its
ability to earn rebates was constrained.
As Ragnar Lodén, Head of Corporate Finance explains: “we wanted
to transform our use of commercial cards around the world by
implementing a truly global proprietary solution. We sought a provider
that could cover as broad a geographical footprint as possible with high
levels of card acceptance.”
T
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To overcome this challenge Ericsson decided to move from the
fragmented and non-proprietary programmes from multiple suppliers
to one global proprietary programme and partner, Citi. The decision to
centralise its global commercial card programme from 61 providers to
one has enabled the company to develop and implement a global travel
policy, whereby Ericsson has been able to implement a holistic control
mechanism globally – for the first time.
The new solution captures 95% of the company’s travel and
expenses (T&E) spend through a Central Travel Account (CTA) offering
the following benefits:
•
60,000 of Ericsson’s registered travellers are now part of one
commercial card programme, representing 93% of eligible users.
•
Non-compliant spending has been substantially reduced since the
implementation of the corporate card in emerging markets which are
growing by 50% and becoming increasingly important to Ericsson.
•
Spend tracking has increased by over 15% at the same time
ensuring high levels of merchant acceptance in markets where
Ericsson previously used cards that were not Visa/
MasterCard branded.
•
Efficiency has improved and their costs have been significantly
lowered; the use of local currency cards across 57 markets means
employee spend does not incur additional FX-related costs in
these countries.
•
Through this one global card programme Ericsson has received a
25% increase in its rebate since launch.
B
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Ericsson’s commercial card programme is the world’s largest individually
billed/individually paid solution. While many multinationals are satisfied with
spend accounting for 70% of expenses, 60,000 of Ericsson’s employees
– 93% of their travellers – now use its programme, representing 95% of
all cardholder expenses. The company continues to expand its solutions;
soon all travellers will be included.
“This solution has facilitated a shift to two shared service centres, giving
us greater control and economies of scale by, for example, reducing
administration by 1,500 hours a month which has increased employee
productivity, saving approximately 3,000 working hours per month,”
explains Lodén. “This has enabled staff to spend time on more value
added tasks.”
HIGHLY COMMENDED WINNER
Best Card Solution
Telefonaktiebolaget Ericsson AB
Ragnar Lodén, Head of Corporate Finance
James Lee, Citi and Virpi Salomonsson, Ericsson
K
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Risk removed/mitigated.
•
Process efficiencies.
•
Productivity gains.
•
Time taken to implement solution and realise benefits.
•
ROI.
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