Today’s successful CFO has a clear focus: how can our business do more, do it better and do it with less? It’s a challenge for large organizations; but especially for the small to medium-sized enterprise (SME) group who may not have the in-house expertise or financial resources to deliver results.
Business Process Outsourcing (BPO)
An option for finance executives to consider is the use of Business Process Outsourcing (BPO.) BPO is contracting the operations and responsibilities of a specific business process to a third-party service provider. This typically includes business processes like human resources, accounting and travel management. Partnering with industry experts that provide specific, task-oriented solutions improve processes and increase efficiencies. Yet, after the tactical job is done, many times compliance and continued process ownership is left unmanaged.
What happens next? How can CFO's move the needle to look at long-term, big picture process improvements that provide added strategic value to their organization? Many companies are looking to Business Process Services (BPS) as the much needed next-step-up from BPO.
Business Process Services (BPS)
BPS combines the task-oriented process of BPO, and takes it a step further by infusing knowledge experts and available technology that add value to an organization’s overall business process management. BPS doesn’t stop when the tactical process improvement is complete; it continues to provide long-term enhancements to the organization as a whole, contributing to overall organizational goals.
This sounds like managed travel leadership consulting. Travel management companies (TMC's), when leveraged as a BPS resource, work closely with finance executives, travel managers and others involved in a business’ travel to:
- Share knowledge from their expertise in the travel management process
- Work to reduce the travel and expense budget (T&E), the second largest controllable cost in an organization
- Increase business’ efficiency and productivity
- Provide control over the financial frustrations that come with managing travel
Simply put, leveraging business process services allows organizations to focus on core business challenges, instead of day-to-day non-core processes. BPS partners generate efficiencies, reduce cost and provide expertise in their core areas, so that you don't have to.
In what ways can BPS or travel management leadership work to achieve company goals?
1. Engage Executive Leadership in the BPS Process
Top executives within your business need to be intimately involved in making the decision to partner with a business process service organization. It’s critical for finance executives to clearly communicate the benefits of BPS: increased productivity, cost-savings and continued strategic direction that positively impact budget line items for future benefit.
Within a business’ travel management function, finance executives feel frustration much sooner than a manager or executive. By clearly communicating how BPS partners can improve processes like pre-trip approvals and expense reimbursements, minimize travel and entertainment expense and in turn, work to achieve business goals through effective budgeting and forecasting, executives can make immediate financial decisions that benefit the business.
2. Collaborate and Communicate with BPS Partners
BPS partners bring a wealth of industry knowledge, new technology and time-tested process improvements that can benefit organizations. It’s important for finance executives and travel managers to develop a relationship with their BPS partner to clearly understand the benefits that each can bring to deliver the best results.
In travel management, we provide successful T&E solutions through strong collaboration. Asking questions, considering options, and discussing best practices that are specific to each client’s success is essential to providing the most efficient, cost-effective solution.
3. Complete Process Ownership
One of the main benefits of utilizing BPS is the time that is saved when industry experts handle projects and tasks that are outside of your business’ expertise. For example, CFO’s that work within a national association have strengths that focus on fundraising objectives, membership fee management and of course, budgeting. Their time and energies should not be spent on reconciling group travel expenses.
When a BPS partner or Travel Management Company completely owns a process such as corporate and/or group travel management, it is the core focus of the TMC. They will take ownership of travel organization, expense management and reconciliation, while ensuring additional process improvements over the long-term are handled efficiently and completely. This increases overall productivity and reduces T&E expense.
4. BPS Provides Continuous Improvement Opportunities
Business process service organizations excel in this area. Through continued collaboration and process ownership, BPS organizations are able to see and act on process improvement immediately within an organization. Thereby maintaining compliance and increasing predictability to allow for efficient budget forecasting and management.
A travel management company provides exceptional leadership in this area. Many times we see departments or situations within a business where travel anarchy runs rampant and control and compliance are nonexistent. Through the strategic process of continual improvement, consistent updates and communication about the organization’s travel policy, travel anarchy is almost completely wiped out. This allows CFO’s and travel managers alike to realize the short and long-term impact of increased T&E control, travel policy compliance and overall business success.
5. Demonstrate BPS Results
One of the key ways to leverage business process services within your organization is to demonstrate the results of utilizing their services. What affect will BPS have on your overall company objectives and how will that impact business? Companies spend between 10-12% of total annual revenue on travel and entertainment. In Certify’s 2016 Expense Management Trends Annual T&E Outlook and Benchmarking Survey, more than 500 CFO's, controllers and finance professionals were surveyed. They reported a number of interesting results, including “expense management process” as the top “key area of improvement” for 2016. When you collaborate with a BPS organization - a travel management company - results are realized. Utilizing the services of a travel management company equals a 10-20% savings in your travel and expense budget line item.
It’s clear that utilizing a BPS service provider is key to achieving your business goals; especially when it comes to managing the large travel and expense line item in the budget. Their involvement in your organization can save time and money, increase efficiencies, provide new technology and reduce expenses, allowing you to focus on your business’ core objectives.
We invite you to learn more about the benefits of BPS by downloading 5 Key Reasons Outsourcing Fails and What to do About It. If you’d like to talk more about generating improved results for your organization, email or call us – we’d love to start the conversation.