14 Oct Thought Leadership: What is the most important aspect of a managed travel program?
There is always a large focus on a company’s travel spend, after all, it is one of the largest controllable expenses and something that can be more easily and quickly controlled, unlike some of the other large spend areas such as real estate, IT and personnel costs. Travel is also a spend area that employees are highly emotionally linked to. So where should a company focus their attention to make sure they get value for money and that the trip being taken is cost effective? With internal resources and project funding stretched, what gets you the biggest bang for your buck? The below list highlights the key areas of a successfully managed travel program. But which is the most important?
- Supplier Contracts: Generally, the largest focus area of most companies, contracts that cover the large spend areas of Airline, Hotel, Travel Agency and Ground Transportation agreements. Consolidating all spend via select preferred suppliers, making sure you have the right terms and conditions aligned to your corporate culture as well as goals to get the optimum service, value adds and rates.
- Integrated Travel & Expense Policy: Critical to a successful travel policy is the communication of the policy to employees, its mandate – including both pre and post audit checks, and its integration to and between the travel booking and expense claim processes. Ensuring employees and their leaders are given clear direction and ownership of the travel policy, including how travel bookings are made and approved, modes of communication, technologies used etc.
- Budget: Does each department have an agreed T&E budget for the year ahead? Is this tracked periodically? Surprisingly this is an area that a lot of companies don’t focus on. How do you control spend when there is no set baseline?
- Reporting: Critical to the success of a company’s travel program is the accuracy of the reporting on total travel spend. The ability to consolidate data sources to provide two slices of the data. 1.) Internal business reporting aligned to your internal expense structure focused on spend and behavior by cost centre, division, location etc. 2.) External supplier management reporting aligned to your supplier strategy e.g. leveraging global hotel & events spend in London to negotiate rates. Air spend by point of sale regardless of internal cost allocation etc. How and when this data is used is also important, pre-travel reports allow a company to adjust or prevent travel before the costs are incurred and also manage security related issues, BCP, CSR etc. Whilst post-trip data gives clear indications of behavioral patterns and missed savings information, allowing for focused training areas.
- Technology: Whether it is an online travel booking tool, expense system, or reporting database, the key to good technology is simplicity and not trying to make a new tool fit an old process. Also, working with systems that can be customised to meet the business requirements of your company, whilst providing automated guidance to ensure employee’s remain within the program.
So, what is the most important part of a managed travel program? Like a jigsaw there are multiple pieces that need to be in place for a well-managed travel program, it’s tying them all together that is the key to a successfully managed travel program. For me the importance of a clear and robust travel & expense policy that links in with both a pre-trip approval and an independent post-trip expense claim process are critical to a successfully managed travel program, it’s about adherence to policy and ensuring the right controls in place, to validate the employee is making the most cost effective and efficient business decision related to their trip. You can have the best supplier contracts in the world in place, fantastic reporting and technology, but if you don’t have the right travel & expense policy to guide and direct employees to make cost effective decision for your company (which airfares should be used, what hotels and room type should be booked, per diem allowance), along with simple pre-approval and post-expense claim checks to make sure people are doing the right thing……..without these in place then all those great contracts that have been negotiated may not be saving you the money you think.
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Author: Robert Norman
Robert has been in the travel & expense industry for over 20 years, working across EMEA, The Americas, Asia and Australasia.