The cost of inefficient travel processes

Posted by QBT Marketing on 13 Oct 2015, 22:45:48

The cost of inefficient travel processes
Did you know?

A typical large business loses 15-30% due to inefficient processes in their travel program.

Travel is a business expense that can produce a significant return on investment if it is conducted properly. That means adopting a policy tailored to your needs, contracting appropriate suppliers and implementing processes that maximise efficiency.

Unfortunately, those three elements don’t always align, leading to cost blow-outs, supplier disputes and traveller frustration.

Here are some common pitfalls – and potential solutions.

Wasting time on bookings

Some staff travel regularly and are familiar with your company’s policies and processes. But these people are most productive when they’re doing their jobs – not spending time making bookings. You can ensure they use their time efficiently by providing them with appropriate online tools, enabling them to make their bookings with a few clicks.

Larger organisations have dedicated travel bookers to handle their bookings. Whether your travellers book for themselves or not, it makes sense to make it as simple as possible to manage the booking process. Everything from making and approving bookings, to updating profiles and travel preferences, to managing bookings when the inevitable happens and plans change, should all be possible from an online portal. If your Travel Management Company (TMC) can't offer single sign-on access to all your daily travel tools then it's likely that improvements could be made.

Booking the wrong services

Your team has done the market analysis, selected suppliers and negotiated rates. But the savings you have chased will not materialise if your travellers don’t “do the right thing”.

It’s important to design a policy based on those procurement decisions and to communicate it to all staff who are likely to travel.

But simply knowing the policy may not be enough. That’s where well-implemented technology can help.

Your TMC should be able to provide - or at least support - an efficient self-booking tool that encourages travellers to make the right choices. If your policy does not allow business class on domestic flights, your booking tool shouldn’t show it. Your tool should default to approved suppliers and specified services, helping to ensure traveller compliance.

Incurring unnecessary fees

For many people, it’s tempting to pick up a phone and get their agent to make bookings. However, with the move to transaction fees, this approach can be costly and wasteful, especially if you already have an online booking tool (OBT) in place.

Smart organisations encourage employees to book online by automating as much of the process as possible. This means travellers simply tick the boxes and choose from approved services from mandated suppliers. They can do so quickly, efficiently and, most important, within policy.

The cost of poor planning

Travel, unlike most indirect commodities, has wildly fluctuating pricing. Two passengers on the same flight will almost certainly have paid very different fares – sometimes one paying more than double.

Research has shown huge benefits in booking early and booking smart. But those savings evaporate quickly if your travellers constantly change their plans.

Your TMC should be able to analyse your past travel patterns and advise on the optimal timing of bookings – and the kind of fares that suit you best.

Unauthorised travel

Even the most sophisticated tools can only do so much. So, there’s always some risk of wastage, inefficiency or even fraud.

This can be mitigated relatively easily with a robust approval system. Approval mechanisms can be automated or may require human intervention, and your TMC should be able to advise on a solution that meets your corporate culture and individual needs.

Accounting costs

Besides booking travel, your team also needs to monitor the spend. Many organisations use inefficient manual accounting processes to track their travel spend, relying on invoices and receipts.

The manual accounting approach is time-consuming and, worryingly, it is also notoriously unreliable since it often requires manual data input.

Increasingly, there is a move towards automated expense management solutions (EMS). These EMS offerings are even more efficient when they are integrated with travel booking engines. That way, when a booking is made and approved, the corresponding expenses are captured and can be tracked.

Loss of negotiating power

When you sit down with your suppliers to renegotiate rates and terms, the first thing they’ll examine is your past performance. If you can’t accurately track your travel performance and spend, your negotiating position is significantly undermined.

On the other hand, if your travellers have used your OBT and all their data has been captured by your EMS, you will not only be able to question past inconsistencies, but you’ll strengthen your hand for future deals.

Your TMC should also be able to harness insights from the data to suggest continuous process improvements for your program.

Looking for missing travellers

We seem to be facing more and more crises these days: everything from terror attacks to floods and volcanic ash clouds.

These events can be debilitating for travellers directly affected, but are also more than a mere inconvenience for employers. How do you know if any of your staff are stranded (or worse!) if you don’t know exactly who is travelling at any given time?

If all bookings are made according to policy and with the appropriate tools, it’s easy to pinpoint all your travellers - any time of the day or night. And if you can’t do it on your own computer or mobile device, your TMC should certainly be able to provide that information instantly.

Automate, integrate and save

Business travel can be complex and traveller behaviour can be unpredictable. However, with a sound and well-communicated policy, clear processes and the right technology, you should be able to reduce the risk of leakage and non-compliance. Read our blog First Time to Procurement, if you're new to the job.

A well-run travel program which harnesses the assistance and support of your suppliers is an efficient program. And an efficient program makes the most of the deals you have struck. It also ensures alignment of the internal and external elements of the travel program. In short, the efficiencies you can access will allow travellers to get what they’re expecting, without any nasty surprises for your other stakeholders.

To identify efficiency improvements for your travel management program, request a meeting.

Topics: travel policy compliance, approval system