10 Business Travel Metrics Your CEO Wants to See

Posted by QBT Marketing on 13-Sep-2017 17:24:57

"If you can't measure it, you can't improve it." - Peter Drucker

Business Travel Metrics Your CEO Wants to See

Travel is undeniably one of the most controllable areas of business spend. It is also the area that attracts the most scrutiny within an organisation. However, most travel procurement managers will agree that this scrutiny is not always ‘informed’, meaning what might be important to travel managers might not necessarily satisfy the curiosity of the C-suite.

So to assist you to avoid fumbling for numbers and figures during a review, we've prepared the below to help you determine what metrics matter most to your CEO.

The big picture

Just as they need a handle on sales and income, organisations need to know how much they are spending on travel. And to calculate that, you need to decide what’s included in travel spend. Is it just airfares, hotel charges and taxis, or do you also include meals, phone and data charges, entertainment costs and conference fees? There’s no perfect formula, and definitions of “total spend” will vary between organisations, but once you’ve locked it in, be consistent.

For better or worse

The C-suite will probably also want to know how current spend compares to last year's or last quarter's. More importantly, they will need to understand how current spend relates to budget. Expense budgets are usually set according to sales forecasts, so if the revenue side is not keeping up, you may find your expenditure curtailed. On the other hand, if things are going gangbusters, you could end up with more in the kitty.

Averaging things out

The business world is obsessed with ‘averages’ and travel managers are expected to be able to calculate the average trip cost, broken down by airfare, hotel rate, car hire cost and other categories. This can be reduced to a cost-per-kilometre measure – or more usefully, averages by sector or city. There’s no real point in lumping Sydney hotels in with Darwin accommodation stats if you’re trying to track rate trends.

Where averages help is in negotiations. Knowing what you paid per night for a Melbourne four-star hotel will help you in your rate discussions when contract renewal time comes around.

By the book

Having appointed a travel manager and a TMC, organisations rightly expect travel to be ‘managed’. This means that bookings must be made 'through the system', and travel managers are expected to be able to demonstrate booking visibility – i.e. the percentage of travel booked and tracked using approved processes and suppliers. Here, it is often useful to compare approved travel (via the TMC or booking tool) with billed travel (through your expense management system or tool).

Doing the right thing

Compliance, or following accepted policies and procedures using approved suppliers – is an extremely valuable measure of how well travel is managed. You should be able to clearly show the proportion of ‘appropriate’ travel versus rogue travel.

It’s a bit harder to demonstrate that trips were necessary, but management has an expectation of judicious resource allocation and you should at least be able to indicate that the approval process weeds out unjustified travel expenses.

That’s a date

Timing is everything in travel booking, and delaying a booking by even a few days can have a significant impact on costs. It is, therefore, valuable to track the timing of travel arrangements. If most of your travel is booked less than a week before the trip, that’s a red flag.

The devil is in the detail

Experienced travellers are often more demanding and try to make their way to the pointy end of aircraft and the more luxurious suites in hotels. It is important, therefore, to monitor class of flight and room type to ensure that travellers are sticking to policy.

The cost of doing business

Even though travel management (TMC) costs are only a small percentage of overall travel spend, the C-suite like to know the cost of doing business. You should be able to clearly show any fees and costs as well as any rebates and incentives which may be returned to your organisation.

And to take this one step further, you should also be able to track the cost of purchasing: any transaction fees or costs associated with your booking technology.

Duty of care

Increasingly in an environment of enhanced corporate responsibility, it’s important for the C-suite to know if their staff are at risk. To monitor threat levels, travel managers should be able to locate travellers 24/7, and they need to ensure that they can generate an up-to-date list of any staff located in any specific city at any time.

Going green

Organisations with strong CSR (corporate social responsibility) commitments will also have a need for accurate carbon emissions tracking. You should be able to see the ‘carbon costs’ of your trips and track the mitigation efforts you have in place.

While all of these metrics matter, theC-suite will expect that they are available in real time, rather than retrospectively. Visibility is crucial to sound management and if you can see discrepancies as they happen, you can nip them in the bud. There is not much value in knowing after the fact that you could have saved money by enforcing your policies. It’s much better to intervene when you see things going wrong and still have the opportunity to change.

Contact QBT and find out how we can help set up meaningful metrics for your organisation.

 

Topics: Travel Management, Business Travel, travel expenses, corporate travel expenditure

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