The MacNair Travel Leadership Blog

If You Can't Measure It, You Can't Manage It: 6 Key Data Points to Diagnose your Travel Procurement System's Health

Posted by Mike MacNair on Mar 30, 2015 1:23:00 PM
TMC_Booking_costsI often visit organizations with unmanaged or lightly managed travel to help them gain control of T&E. The biggest challenge is collecting complete and concise data on what their team is spending - regardless of where the trip’s components are purchased. If nothing else, new tools allow your organization to more easily aggregate all your data into a series of reports that can be used to evolve the right policies and procedures with which to manage this significant line item. Your leadership and rogue travelers aren’t going to jump on board with any system unless you make the case - with data - that managing versus simply purchasing this line item makes sense. What I have also found is that the savings opportunity alone (there are other benefits of managed travel) is between 10-20%. Following are six initial data points to diagnose to quantify the lost opportunity of rogue bookings and evaluate your tolerance for the loss:
  1.  Total volume. Overall, by product (air, hotel, car, sedan,etc.), by department, by cost center.
  2. Average transaction cost compared to plausible benchmarks. Topaz International and other third parties provide this data, as do many TMCs.
  3. Lost opportunity compared to lowest fare available. What the lowest fare was for the itinerary compared to what was selected by the traveler. This data is often available from TMCs and can’t be secured from public sources.
  4. Preferred supplier performance and/or opportunities. Air program, hotel, and car. If you have them or, if not, where your volumes lie.
  5. Travel purchase by source. What was purchased from your TMC, then online and call in with your TMC, then alternate sources (public sites, supplier sites).
  6. Policy compliance. If you have details in your travel policy about what the company expects travelers to select (fares under $500 or within range of the lowest fare, per diem rates), how did the team do with compliance? Measure it within your suggested travel program. 

Here's the 12 key data points you should be tracking

Often the mistake that is made is that a travel booking process is suggested, yet not required because the organization believes that all rates and rate sources are created equal and the only difference is the fee. So the team thinks it’s doing well by minimizing or eliminating the fee. Common wisdom is that the fee is 3% of the trip and the rest is 97%. So watching and managing the entire cost of a trip should deliver better results. The above data will help you do so. 

How to collect all this data is a common challenge for those without a tightly managed program whereby the data can be provided by your TMC. Expense report data from your ERP is useful. Credit card data is usually helpful if everyone is using your corporate card system (another missed opportunity with many rogues). Then with data aggregators like TripCase corporate or Triplink you can at least require everyone to forward all bookings to these tools for complete data integration and evaluation while enhancing duty of care. 

We have found that from this evaluation will come reasonable policies and procedures to better control this size able line item. We wish you luck! 

Managed Travel: 12 Key Data Points You Should Be Tracking