GBTA predicted that, by 2020, worldwide corporate travel spend will reach $1.6 trillion — a whole 25% more than it was in 2015.
Managing spend in Travel is no easy business. In fact, Travel ranks as the second most difficult expense category to manage. Establishing proper control over this category is sure to improve control and governance of expenses, not only in Travel, but across the business as well.
If you have ever taken on the momentous task of managing this category, we are well aware that this article may be preaching to the choir, however, T&E does not necessarily need to be so difficult. There are three major secrets for a successful T&E management strategy: visibility, automation and simplicity.
You cannot manage what you can’t see. The secret to visibility? Data, data and more data.
At this stage of the game, we all know the importance of data and that it is needed. The question is whether we are using data correctly.
Most of the time we are not. The data is there, but often it is scattered in more than a few different sources and systems. Tools like SAP, Oracle and other resource planning software is fundamentally wired for the simpler purchasing and payables datasets used for other category management, rather than T&E reporting.
In Travel we look to not one, but several data feeds. The TMC contains valuable information, but also leaves out transactions and bookings that happen outside its channel and are placed directly on the credit card or manually entered through the expense system. Moreover, this “hidden spend” or “leakage” is often the area where the management of T&E is most likely to break down. To enable active management, multiple sources and data feeds need to exist in a dynamic environment, so we can get insight from the data as and when we need it. What good is an Excel spreadsheet that only gets updated once a quarter?
The systems we operate with need to be more transparent and be able to integrate with one another. On top of that, we need data analytics that allows answers and guidance to emerge from the data harnessed from these systems.
In travel, we know this is easier said than done. To prep any data for analytics, analysts must pull data from APIs, transform and merge records and load the data into a cloud data warehouse — creating a data pipeline. This involves a lot of initial manual work. Each data feed has to be unified into a single dataset that continuously refreshes as and when the source data changes. There are thousands of duplicate records creating conflicts that need months of code to resolve. Once this is done, we will have the ability to know what is happening in reality. The next step is to act on it — preferably automatically.
Automation is the secret to proactive management, specifically when it comes to developing an intuitive traveller policy, negotiating contracts and ensuring these are honoured in reality.
You will find most human beings are not an encyclopedia of travel policy and contract terms. That is why we need machines to do it for us.
From online booking tools promoting preferred supplier content to automated alerts on compliance, tax or risk issues — automation takes the mundane tasks out of human hands.
Travel managers can now start to throw out old practices like the traditional RFP in favour of a dynamic pricing model as the system automatically keeps an eye out for what is being booked and at what price. It can assess when a set rate cap is about to be reached plus keep an eye out for the lowest logical room rate and suggest it to the traveller through a booking tool, for example. With the right software, the lowest airfares can be sourced, discount structures can be integrated, benchmarks can be used and alerts can inform whether your negotiated rates are measuring up to what is happening in reality.
Tax fines can be avoided if alerts show that travellers are booking travel that conflicts with tax laws for any country. This will allow for proactive action that was previously difficult.
When it comes to expenses, classic ERP software does not diminish the manual labour that agents and employees have to perform, like collecting receipts and inputting information. With every human intervention, the risk of inaccuracy grows higher. That is why it is best to keep it simple.
Many mobile expense tools make the process easier for the traveller while also reducing the chance for receipts to be lost. Online booking tools need to have good content suggestions and have an easy user experience — making them a preferred channel for booking. When we make it easy, travellers automatically do what we want — without us intervening.
Of course, there are so many other ways in which spend can further be controlled, but, when we have good reporting, automation and a simple experience for the agent, travel manager and traveller alike, you will find that these additional activities are complemented by a system that works.
The bottom-line? Travel is not that Expense-ive if you have the right tools to manage it.