At MacNair, we use the term Travel Anarchy™ or unmanaged travel to describe organizations that have a chaotic Travel and Expense Management (TEM) process. While many organizations depend on travel to drive growth, those that are completely unaware of managed travel processes end up creating unnecessary costs for themselves in both time and money. Granted, it can be challenging for organizations to see the benefits and measurable impacts of a travel program without having a structured Managed Travel process in place. When this disconnect occurs, Travel Anarchy™ ensues.
As a Travel Management Company (TMC), we look for valuable information to share with our current and future customers that will help identify the key components of a successful travel management program. We do this while connecting the dots with corporate travel policies and benchmarking data that will ultimately lead our partners’ to success.
Recently, Business Travel News’ (BTN) released their annual Small & Midsize Enterprise Travel Management Report. The report examined travel programs with up to $12 million in annual United States-originating air volume, which equated to approximately $1 million to $24 million in total business travel volume. It also accounted for hotel, car, meals and other ancillary travel spend. In the report, BTN shared that Travel Managers have six primary focuses:
The corporate travel supplier relationship is an essential piece of your business’ corporate travel management program. Without their expertise and knowledge of travel options and best practices, your travel program would be in chaos, creating increased travel anarchy and wasted productivity from travelling employees working to book travel without proper guidance.
Increases in hotel and airfare rates, combined with additional ancillary fees sometimes “hidden” within the supplier’s overall travel costs, presents a challenge for your organization’s finance department and procurement specialists. The negotiation and management of the corporate supplier relationship is complex; yet taking the time to learn about the options available for your business travelers will decrease travel spend, increase overall travel compliance and provide predictability in managing the ever-changing travel and entertainment (T&E) line item within your business.
In most organizations, Travel and Expense is the 2nd largest line item after your personnel. There is often plenty of waste and inefficiency, which affects every aspect of your organization. If you’re the CFO, you know there is opportunity to better manage your travel & expense policy to close those gaps.
For example, how many of your employees adhere to your travel policy? Do they even know it exists? How much is it a part of the company culture? Does it work with or against your existing company culture?
Your company culture may have unspoken “rules” among the employees and how much they comply with an existing policy. Is Business Class de rigueur for all or does everyone fly coach? Even that latter distinction can eat into your bottom line if you don’t have a clear stand on whether or not premium coach is acceptable or not.
According to the Global Business Travel Association, Travel expenses are expected to rise in 2016. In many organizations, T&E is the 2nd largest line item in your budget after salaries. In some cases, out-of-date business processes may only reflect 60% of your employees’ Travel & Expense spend.
If this is true for your business, then you know there’s an opportunity to trim expenses and you need to find a solution. What’s the solution? The key lies in understanding where your expertise is within your own business and then aligning your organization with a Business Process Services partner with travel management expertise. A Travel Management Company that focuses on travel leadership will provide the support you need to get your budget out of the red and here’s how:
We work with many small and mid sized companies who are ready to get a handle on their T&E spend. Sure their people can book trips a variety of ways but how do you know that you agree with what they have selected and they haven’t left some significant opportunities on the table for the company’s budget? Many don’t. They have no idea what they spend in many of these expense categories and don’t know how they stack up to others or even those within their organization. As a result they cannot quantify their missed opportunities and they cannot define what the company should expect them to do when making choices for travel. And you don’t have to be the travel gestapo to spot check and clarify expectations for big savings. By making sure that the company’s and traveler’s desires are respected, big money can be saved, expense processing can be streamlined, the volume the company spends can be leveraged for deals, and support and emergency care can be enhanced.Here is where you can find some of this data.
Getting everyone on board with your Travel and Entertainment (T & E) program can be a challenge. I have found that these three tips make compliance improve significantly.
Travel Leadership Blog
Travel and expense management is a key leverage point to enhance productivity & control costs. Join us here as we share best practices, stories, insights and tools to help you manage your travel more effectively.