The importance of benchmarking cannot be overstated. Goals that include realistic key performance indicators (KPIs) and strategic metrics are now commonplace within sales, finance, operations and procurement departments. Your corporate travel program or travel department should also research peer companies and identify benchmarks that align with your industry’s performance in order to set realistic KPIs and goals for travel savings and policy compliance. Most often a travel management company partner can help you identify this information and establish some key metrics to benchmark your program against.
Developing accurate and relevant benchmarks can be challenging – especially if you’ve not previously tracked specific results for your travel program. The following five benchmarking tips will provide control and visibility into your corporate travel program, resulting in major savings.
1. Set measurable benchmarks/results (Or decide what to measure)
This seems intuitive, yet many organizations don’t regularly set goals and subsequently track results for their travel program. Is your program goal to decrease overall travel spend? Reduce ancillary fees? Increase traveler satisfaction? Once you’ve determined your ideal end result, you can then identify what metrics will best measure progress (or lack of progress) towards these goals.
2. Determine where to find your travel data
Accurate and timely travel data is essential for effective travel management. Many times, organizations do not employ the same rigorous attention to travel data procurement as they do with other departments, such as sales.
Forward thinking organizations have systems in place to gather travel data through expense reports, online booking systems, and in some cases, through their travel management company. Spend time determining how your travel data is gathered, organized and where this vital information can be found.
TMC Tip: Your TMC partner can provide you with a broader business solution that integrates your business’ ERP system with your travel and online booking system. This solution saves time, improves employee productivity, and increases travel savings by providing one technology platform that streamlines expense management and travel data tracking.
3. Determine what data points to benchmark with accuracy
Every business is different; it’s critical to determine what data points will have the greatest impact on your organization’s bottom line. Typically the following data points are used to set and track benchmarks, which drive travel savings:
- Total travel volume
- Preferred supplier performance
- Travel purchase by source
- Online booking tool (OBT) statistics
- Average transaction costs
- Lowest available fares
- Unused non-refundable tickets, exchanges, refunds and voids
- Travel disruption and resulting monetary and time-lost expense
- Traveler behavior
- Hidden expenses and ancillary fees
- TMC response time and return on investment (ROI)
A regular review of these data points will allow you to gather accurate and consistent data reports that either support or negate the goals previously established for your travel program.
TMC Tip: The systems and processes that an expert TMC have in place can provide real-time reporting. Their high level web-based and broadcast access to all travel data gives immediate updates to assess potential challenges and opportunities, and offers the ability to adjust benchmarks as appropriate.
4. Secure travel savings through compliance
One of the most important parts of being able to use accurate and relevant data for benchmarking is to ensure travel policy compliance. Be sure your travel policy is well communicated and provides travelers with flexibility. Keeping cost control in mind, a relevant offering of traveler benefits also needs to be considered. Travelers are more likely to comply with policy when their overseas flight includes business-class or preferred seating, for example.
When travelers comply with travel policy, this gives your finance team control over travel and entertainment expenses, ensuring that volume discounts and preferred vendor perks are effectively utilized. In addition, travel policy compliance helps with expense management. Non-refundable airline tickets, ancillary fees and other hidden or unexpected expenses can be promptly addressed and resolved.
Travel policy compliance gives you control, clarity and predictability within your travel program, and should be established then regularly reviewed with your overall business and strategic goals in mind. When travel is booked within policy guidelines, the data that is captured will be comprehensive and accurate. In the instances where travel is booked outside of the managed system, data isn’t recorded or processed for Therefore,
TMC Tip: Through their extensive experience, TMCs can help you develop a travel policy that ensures compliance. A TMC will bring updated travel technology, travel policy guidelines and procedures that save on employee productivity, address non-compliance and other areas of your program that can be impacting our bottom line, such as travel disruption and change management.
5. Communicate corporate travel program savings (and challenges)
Benchmarking the results of your travel program savings mean nothing if not properly communicated. Consistently reviewing goals, benchmark results, potential challenges and opportunities is critical – both within your finance department and with your management team. When a high-level project demands additional travel, or travel policy compliance is dropping, it is vital to either immediately adjust benchmarks, or determine how to accurately track important changes within your travel program.
Constant communication between program stakeholders and travelers will result in a better understanding of the importance of travel policy compliance – both now and in the future - and allow for consistent travel savings.
Effective benchmarking – determining goals, gathering and utilizing travel data, ensuring travel policy compliance, and successfully communicating results – must be consistently reviewed and adjusted to drive travel savings. The control, visibility and predictability that comes with effective benchmarking provides essential information to determine your travel program’s ROI, travel savings and its impact on your organization’s bottom line.