Earlier this month, Certify released their 2019 Travel and Expense Management Report. The report measured how much travel programmes used automation and data management systems in Travel and Expense (T&E) management. 585 professionals from small, mid-market and enterprise-level travel programmes were interviewed to find out their level of automation.
The results were surprising. In enterprise-level programmes, automation was overwhelmingly preferred, with 46% of companies using a dedicated solution and 27% using an ERP accounting package (Oracle, SAP etc). What was most surprising is that, even though these companies manage large scales of spend, 27% of these companies still relied on manual systems like pen and paper, Excel spreadsheets and homegrown solutions to manage their programme.
Obviously, the small and mid-market companies were even less automated. Out of all companies surveyed, 43% of companies still rely on manual methods to process and manage travel expenses.
Based on the minimal headcount in each team and the vast volume of spend they control, T&E is known as one of the most complicated areas of the business to organise. According to the Global Business Travel Association (GBTA), business travel spend is growing even more. It grew globally from $292 billion in 2017 to $305 billion in 2018 —and is projected to grow another 3.1% in 2019.
In an age where Elon Musk is developing driverless cars, it is surprising that manual management is still almost common practise in such a massive spend management function.
Does automating travel and expense management make a big difference? Is man or machine preferable? There are three key factors to consider when evaluating the value of any system: its data visibility, useability and ability to deliver ROI.
The battle begins!
Visibility: man or machine?
“You can’t manage what you can’t measure“ is a phrase coined by statistician and quality control expert W. Edwards Deming. Other procedures may be different but, when managing a category that revolves around spend and numbers, measuring the numbers we work with is no doubt crucial.
When it comes to this, the machines are leagues ahead. Human error is the number one cause of data inaccuracy. When agents enter booking data incorrectly into the TMC and when travellers fill out expense reports inaccurately, it becomes challenging to reconcile the data.
Simply introducing an automatic process such as an online booking tool and expense management software that automatically scans receipts has the power to cut the data inaccuracy down significantly upon data entry, whilst potentially producing better-structured output data.
This is important, in order to ensure optimal visibility, we must not only have accurate data capture but also accurate data analysis.
In the Certify report, 44% of those who used manual processes with no plans to change believed that their existing systems worked well enough.
Although manual methods like Excel spreadsheets may deliver an analysis, they fail due to two major reasons: data accuracy and speed.
1. Why do manual systems fail to achieve data accuracy
One of the biggest obstacles in achieving accurate, consolidated data is human error. Spelling mistakes and typos create 58% of all data accuracy issues. Automated machines or software runs the same process multiple times and, if it uses machine learning models, it is able to learn from previous data.
Although more accurate, machines do have limits as they can only be as sophisticated as the development work behind them. In most cases, however, if a development error does happen it is immediately noticeable as opposed to tiny, small, constant inaccuracies happening from human input.
2. Why do manual systems lack speed
One of the biggest changes organisations notice upon automating their travel and expense management is the time they save.
Instead of employing off-site personnel or having the travel team spend weeks pouring over spreadsheets combining data from different fields; introducing software to combine and match the data for us can be a massive time-saver.
Having the data on hand quicker can also be game changing when it comes to ensuring policy compliance and mitigating risk. The travel team and, if necessary, the travellers themselves, can be notified immediately if any risk, policy or tax issues arise.
Of those travel and expense managers surveyed in the survey, surprisingly, only a quarter had a system that automatically flags out-of-policy expenses.
Automation also saves time for the travellers themselves as they no longer have to waste hours of their time entering details manually from crumpled receipts. The corporates footing the bill for this time are even more grateful.
Winner of the visibility round? The machines.
Useability: man or machine?
Useability is a bit more complex than visibility as people are sometimes most happy with using familiar systems. In the Certify survey, 10% of the companies who did not want to change from manual management reported they did not have knowledge of any appropriate solutions they would use.
In the survey, however, 63% of respondents reported improved efficiency and expense reporting processes after introducing automation to travel and expense management.
Even though automating the system was different to what employees were used to using, it was overwhelmingly more efficient. In this category, machines win the game again.
Delivering ROI: man or machine?
The survey reported that, once implementing a more automated process for travel and expense, 50% of large enterprises realised a positive ROI in one year or less while 57% realised a positive ROI in two years or less. In small or mid-market companies, the savings were even higher.
The numbers speak for themselves: machines provide better visibility, are easier to use and can deliver more ROI.
When it was first spoken of in the 17th century, electricity was a foreign and weird concept. Now it is an integral part of everyday operation.
When looking at the vast array of booking tools, expense management software and data analytics tools on the market today, upgrading the status quo is not as daunting as it once was. Once the development is done, managing travel and expense can be as easy as switching on a lightbulb.