The term “benchmarking” is a commonly used word in today’s business. Wikipedia defines benchmarking as “…the process of comparing one’s business processes and performance metrics to industry bests or best practices from other companies.” It’s an important piece to include when planning, and with December upon us, my guess is that this “benchmarking” term has come up in your staff planning meetings.
Recently we talked about measuring your travel and expense program and asked the question of whether your program was delivering the results you need and expect. One of the key components to that measurement is taken from our Travel Management Diagnostic Scorecard. Today, I’d like to specifically focus on question number five from the scorecard:
- The data that is available from travel and expense expenditures is easy to secure regardless of the booking source, seamlessly integrates with our financial systems, is timely and provides valuable insights that allow us to run our organization better.
At this moment, how would you create a benchmark that allows you to track specific data points, related to travel, that effectively show how your travel and expense line item is affecting your business – either negatively or positively? Let’s look a little deeper at the scorecard question to determine your ability to access and define this information.
- “…data that is available from travel and expense expenditures is easy to secure regardless of booking source…”
We often talk with businesses that have no idea of what they spend on travel and entertainment, and it’s difficult for them to accurately determine the size of this line item. This data is critical in determining your monthly, quarterly or yearly benchmarks and needs to be managed to improve or change results.
A recent blog post spoke about where to gather this data. Travel details including total travel volume, average transaction costs and preferred supplier performance can begin to explain where to find these potential data points. Once you determine what you’re looking for, it’s important to be able to find the data, and have the ability to use it when you need it. Your TMC, along with your online booking tool, should provide data that goes into an automated expense report system. This in turn can provide information in a number of different ways that give you the ability to benchmark appropriately.
For example - in this day and age of global travel, you can’t simply look at what is spent on an airline ticket. Additional costs like onboard Wi-Fi and additional baggage can quickly add up and increase expenses. Taking control of managing this data and determining expenses will show real opportunities for providing direction and control.
- “…seamlessly integrates with our financial system…”
There are a number of online booking and travel expense reporting options available for business to use and integrate with their own financial system. Businesses such as Concur, Databasics and ChromeRiver offer a broader business solution for expense management. These tools collect any and all travel and expense data and merge it directly into your company’s ERP system to allow you to more effectively run your travel program and your business overall
This automation saves time, money and provides control for better, more efficient benchmarking. Data can be coded by department or project, for example, and easily shared operationally and with managers to create opportunities for overall improvement.
- “…is timely…”
Great TMCs are able to provide web-based and broadcast access to all travel data that is collected from their customers. In this global business world, travel happens all the time. Accessing your travel data when and how you need it, 24/7/365 is absolutely necessary for businesses.
In addition, this “real-time” reporting gives immediate updates on your business, based on your previously defined benchmarks. If something isn’t working three months into your plan, you’re able to assess challenges and opportunities and adjust goals (and benchmarks) appropriately.
- “…provides valuable insights that allow us to run our organization better.”
Every business is unique and therefore requires a unique solution to its travel and expense program. Each organization must consider its own business plan to be able to effectively benchmark how their travel and expense program is doing against the marketplace in securing the best value on air, hotel and car. Gathering and analyzing this data can indicate value performance, identify opportunities and threats and ultimately improve your overall travel program.
When your travel program is improved, this directly affects the rest of your business. It’s interesting to consider that a lot of organizations that we talk to don’t want to take control of this line item even though it impacts the business in so many ways. Travel and entertainment is the second largest controllable expense in a business, and can directly affect an organization’s cash flow as well as departments such as operations, finance and sales. Including these data points as you consider benchmarks for 2016 will help determine how travel is impacting your company.
Start controlling and managing your data and your travel program now. It’s a game changer for your business, and with the best partnerships and tools, will deliver positive results next year and beyond.