The MacNair Travel Leadership Blog

Does Your Organization Need a Travel Management Company?

Posted by Mike MacNair on Aug 6, 2015 3:00:00 PM

Does-your-organization-need-a-travel-management-companyI was recently at a conference with many business leaders of organizations of varying sizes. The biggest question many of the leaders asked me was at what point does an organization need a Travel Management Company (TMC). They understood the value in streamlining the process, helping to save money, providing support, and securing data. What was unclear was when making the investment in this change of habit to travelers and other departments delivered a worthy return on investment.

The bottom line is that a good evaluation of your current process and purchasing results can determine a specific return on investment. Following are a few areas of complexity that drive buyers from travel anarchy to travel management. An organization doesn't have to have all of these complexities to move forward, but the combination of a few inspire the decision to manage travel with the guidance of a TMC.

Volume

We have found that for most organizations the process of managing travel becomes effective enough to drive change when the air, hotel, and car budget is over $250,000. With this volume, you can leverage systems to drive results in four ways:

  1. Leveraging deals
  2. Expanding considerations
  3. Enforcing policy
  4. Pre-trip authorization

The main challenge for many organizations is that they don't know what they spend. There are ways you can uncover this Travel & Expense (T&E) data for your travel program. Learn where to start looking in this blog post.

Complexity

Some of the organizations that utilize our services do so because their itineraries are complex and the best value and routing aren't easily found on the web. Multi-leg trips, trips to multiple foreign destinations, and air, hotel and car requirements expertly coordinated can require the support that a great travel agent provides keeping the employee focused on their results and not simply the booking of the trip.

Compliance

Complying with federal regulations and a variety of customer requirements may make booking and complying a complicated process. These complications inspire outsourced support and the confirmation of compliance data that goes along with it for reimbursement or in case of an audit.

Service and Support

Service and support from a TMC comes in many fashions. It can be anything from looking for fares, booking, changing itineraries, managing disruptions, reconciliation of billing data and more. Looking at the business process you currently have in place for travel and determining what it can be with a TMC can uncover productivity gains that can make the relationship worth while.

Deals

Some TMCs have special rates with airlines, hotels and car rental companies that your people cannot secure on their own. Knowing what you spend and where can determine if there are some specific deals that can make working with a TMC beneficial.

Policy Enforcement

If when benchmarking results for your staff and non-staff travelers you determine a wide variance between what should be the average or better results and the results your team is actually securing for their average air, hotel, and car rental rates, it may be time to talk to a TMC.

Culture

T&E is the second largest controllable cost for the average company and when data is collected and the opportunities are assessed from mapping the travel and entertainment management process, treasures are always found. It's just a matter of quantifying them against the time and effort to make such a change.

Working with a TMC has many benefits and can provide a significant return on investment. If your organization is facing two or more of the situations described above, it may be time for you to talk to a TMC.

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