Every organization has what we call “rogue travelers”, or travelers who book outside of your established travel and entertainment (T&E) system. The dangers of rogue behavior are enhanced when process development and compliance with your T&E line item are unclear and not properly communicated. Tools and technologies are available – online booking that’s merged with your travel policy is a great example - to combat rogue behavior and enforce procedures. These tools are extensive and when fully leveraged, their impact can be critical to operational success.
We have helped a number of organizations develop a travel policy and integrate them into tools and processes to support the successful adoption of T&E management. Rogue behavior can impact your organization by causing lost savings, wasted productivity, and ineffective control and support. Compliance with your travel program should be a priority to avoid those impacts. Here are 13 key reasons that you should ensure that travelers comply with your established program.
1. Travel and entertainment is a sizeable line item.
T&E is known to be the second largest controllable cost for the average US organization. It’s critical to have a well-managed T&E budget. Researching the most effective policies and procedures can not only control this large line item, but also ensure the success of each trip.
2. The definition of "value" that is left to interpretation is costly.
Travelers may feel like they are getting the “best deal” but compared to what other options? Great travel policies leave room for empowerment and very clearly define what value means to the organization. For example, your policy could direct travelers to fly the lowest coach fare. However, what if the lowest is a non-preferred airline? Where do they go to ensure they are finding ALL of the options available? How about connections and alternate airports? Policies often fall short in defining monetary thresholds. Ensure you define the best value and have a way to enforce and track what was missed.
3. Avoiding TMC fees is not the best way to save money.
“If I book through a Travel Management Company (TMC), I have to pay an extra fee, which then costs the company and my department more money.” This is a common misconception amongst travelers. When you book through a TMC, 97% of the trip cost is air, hotel, and car while only 3% is the fee. One of the ways to significantly impact your business travel and save money is to control volume by executing travel through one system. This enables you to secure the best supplier deals, enforce reasonable policies, and have the system manage exceptions under clear, enforceable thresholds.
4. Unbiased fare search is hard to find and limited choice will drive up costs.
Have you noticed that once you begin shopping online for a new car, suddenly every time you log in, a pop-up ad for the new Toyota models magically appear? Predictive technology is a body of tools capable of discovering and analyzing patterns in data so that past behavior can be used to forecast likely future behavior. If your employees have used any public site, it knows what they want and skews the display toward what they may want again. Three things should be of concern: (1) Not every site delivers all potential suppliers and fares; (2) Some are set to be wildly biased to their preferred suppliers vs. your preferred suppliers; (3) Some sites are wildly biased to the traveler (using predictive technology). Direct your team to the right place to buy, and then communicate and reinforce this information through your business’ travel policy.
5. Productivity impacts of non-compliance are significant.
The components of making a travel purchase include “looking,” trip authorization, “booking,” securing approval, making changes, managing disruptions, and processing the expenditure. What are the most effective ways to complete this process and what are the productivity costs of doing it inefficiently? Everything from looking at multiple sites and adding your required data each time, to navigating change without dedicated support, to submitting expense reports outside of automated system require time that most travelers just don’t have. Directing your travelers to one system that is supported by your TMC ensures the greatest productivity for your organization.
6. Bad things can happen while traveling and rogues open the company up to potential risks.
Lawsuits often occur when employees aren’t properly cared for while working. For many that includes travel. What are the impacts to your duty of care requirements for your employees if rogue travel behavior is allowed? How does this impede the company’s ability to track, support, care for, and notify travelers of harm or potential harm? While there are manual ways to track rogues, this takes time and affects productivity. TMC support in this area is critical.
7. The costs of poor support can be sizeable.
Travel has a purpose...closing a deal, collecting data, creating a new partnership. Not achieving the goal because disruptions weren’t managed as well as they could be can have a big impact. Why not make sure your travelers are supported 24/7/365 in case of any disruption that may impact their work goals or personal life? Encourage your rogue travelers to trust and use the benefits your TMC provides. A TMC knows how to navigate the opportunities, especially when travelers are held ransom by airline/airport support personnel.
8. Reasonable autonomy can continue as long as it is a win-win.
Employees like autonomy, especially when it comes to travel. The perception of more choices, supplier loyalty and personal benefit from a rewards program motivate employees to book travel on their own. Reasonable autonomy can be provided in a managed system when the employees are engaged and when the system has online and call-in options that roll up into one database through a respected TMC. So the choice isn’t “call a travel agent” or “go online.” The right managed system can incorporate and respect both.
9. The opportunities and benefits of leveraging volume can be significant.
Discounts and even corporate reward programs can be a winner for most organizations. When volume is combined and your team’s buying habits are properly directed, air, hotel, and car deals can have a big impact on the bottom line. Assess the opportunities and talk with your road warriors about volume. More importantly, these programs almost always allow the traveler to keep the points they would normally earn. Credit cards may be the exception, but leveraging your purchases through a purchasing system can also net big results. Evaluate the opportunities!
10. Travel should be approached like any other procurement process.
A culture of procurement is commonplace in business where there is a process for handling all purchase requests. Think about the way that you purchase your office supplies – there is a process in place even for that. The same should be true for your travel procurement, especially since it is the 2nd most controllable cost for most organizations.
11. There can be a balance between the yin and yang within a managed system.
It’s all about balance. Engage your rogue travelers and provide them the opportunity to use and ask questions about the travel system. Ask them to help evolve the program into a win-win for all involved. Your travel policy should ensure that both traveler and organization needs are met. When an organization is successfully able to balance the needs of their travelers with the needs of the organization, we call it the “yin and yang” of travel management.
12. The system selected should have all of the fares and a guarantee to prove it.
Most good TMCs will have a service level agreement (SLA) with a low fare guarantee. Don’t let travelers say they got it cheaper elsewhere without challenging the SLA to prove it. Getting to the bottom of these claims either directs the company to the right TMC, or the traveler to “get on board.” When travelers book outside the system, the ability to track and challenge the lowest fare is lost.
13. Without control of travel spending, data compliance issues can cause problems.
If you do not have your data captured in one place it can be a challenge for your organization to know exactly what you’re spending on travel. Key data points can include total volume travel spend, average transaction cost compared to benchmarks, lost opportunity compared to lowest fare available, and preferred supplier performance. Without data, there is no way to control spending and know what money has been left on the table. Help your leadership teams manage expenditures and improve cash flow by managing compliance and taking control of your travel program.
Let’s be realistic – your employees are busy, they have other jobs to focus on. They aren’t fully aware of the pros and cons of all internal processes, and compliance with established travel policy and procedure may not be top on their list of priorities. Their intentions are good but the expertise on this subject may be limited. Use the most salient points for your organization to bring everyone on board. Doing so will ensure that travel is a driver for even better business results!