The corporate travel program within your SME, while vital to your company’s success, can also prove to be quite cumbersome to manage. Ensuring your road warriors are following policy, booking and managing itineraries, reconciling expenses while at the same time, keeping this line item at or under budget is a challenge for finance executives. As the second largest controllable cost within your organization, the travel and expense (T&E) line item must absolutely be managed to be sure your business is appropriately balancing a successful corporate travel program and a thriving, profitable business.
Many times, SME’s look to partner with a travel management company (TMC) to lead their corporate travel program. A TMC provides a wealth of industry knowledge and experience, relationships with preferred vendors, and the systems and processes to ensure your T&E line item is appropriately managed. Their high level service provides tangible, direct results compared to that of a travel agency, creating a successful corporate travel management program that drives positive outcomes for your SME.
Finding and developing a relationship with the TMC that provides the travel leadership to best meet your business’ needs can be challenging. Whether you’re looking to move your travel program from online bookings to a fully managed travel program, or you’re interested in working with a TMC that will have a more direct impact on your T&E line item, the typical first step is to develop a Request for Proposal (RFP) or Request for Information (RFI) and provide these to a handful of TMC’s for their review. Creating a strategic and thorough RFP will help your SME align with the right TMC as a partner, empowering your SME to find the right travel management solution for your business.
We’ve seen a large number of RFP’s come across our desks, and in turn, have developed best practices and considerations for SME’s to review prior to the development of an RFP. There are many important items for SME’s to consider when partnering with a TMC that can truly enhance the value of travel management with your business.
As you review the TMC options for your SME, it’s imperative that all possible candidates provide you with definitive travel program results that will be realized in your corporate travel program. Years of working with SME’s have resulted in the development of four key travel program results that are necessary for the success of your corporate travel program. These results focus on savings, support, productivity and control.
Savings Value of Travel Management
Direct, bottom-line savings is a necessary result when working with an expert TMC. Many times, SME’s are most concerned about fees incurred while working with a travel management company. While it’s important to assess a TMC’s fee structure, TMC fees typically represent only 3% of your company’s overall T&E budget.
It’s important to determine what savings you expect from working with a TMC. Thoroughly assess your current travel program expenses and determine the area(s) where potential savings can be realized. Develop benchmarks based on industry standards and define the expected value that can result from a successful TMC partnership. Finally, ensure defined values and cost savings expectations are clearly communicated and enforced through your travel policy.
When you determine areas of potential cost savings, and define the expected value provided by a TMC, you’ll be able to create a more cost effective travel program that drives positive results for your business.
Support Value of Travel Management
Support can represent many different areas with regard to your corporate travel program. Consider the areas where your travel program needs the most support; are you experiencing poor customer service from your current travel agency or TMC? Are employees wasting precious work time because your corporate travel management technology is not up-to-date?
Effective travel management support brings value to your SME through the development of travel management systems, including expense processing, reservation management, unparalleled customer service and managing travel disruptions before, during and after a trip. It’s critical that your TMC partner has the personnel and travel and expense management system to provide outstanding support to your organization. High level TMC support will also contribute to overall program costs savings, which will positively impact your bottom line.
Productivity Value of Travel Management
Operational efficiencies are a key component to your corporate travel program. These efficiencies not only reduce waste and create T&E line item savings, but they also increase the overall productivity of your employees – both travelling and non-travelling employees.
Assess the current systems and processes that you have in place to decide where the most time is being wasted. Is employee time being wasted gaining itinerary approval? Is your expense reimbursement system inefficient? Once you determine your pain points, clearly communicate your operational efficiency needs to your potential TMC partners.
An exceptional TMC should provide you with effective processes and systems that create the most cost-effective, efficient travel management system to ensure T&E savings, and increased employee productivity.
The Value of Control in Travel Management
The value of efficiently managing your T&E line item cannot be underestimated. As the second largest controllable cost within your SME, the ability to control the how, when and why of travel and expense management presents tremendous value for your organization.
First, assess the current level of control within your organization. What tools are available to you that effectively control this line item within your business? Are procedures in place that allow for control and compliance within T&E? What areas within your corporate travel program require added tools and support to ensure overall control?
A TMC that provides true travel management leadership will ensure that your SME has the processes and tools in place to provide control and compliance within your travel program. This will help to eliminate unnecessary and wasted expense, increase productivity and provide predictability in managing T&E.
Savings, support, productivity and control are the four key areas where an expert TMC should clearly demonstrate the value that they can provide to your SME. Developing an RFP with these results already in mind will ensure you find the right TMC partner for your business, creating a corporate travel program that drives strategic business success.
Do you have additional advice on developing an RFP for travel management companies? Are there added results that SME’s should consider when exploring a TMC partnership? Please share your thoughts and comments below.
In addition, we’ve developed a workbook to help SME’s create the most effective RFP to provide the best results. Download 8 Common Travel Management RFP Mistakes to learn more.