Business travel is certain to return post-pandemic. It was never a question of if, but more a question of when. Borders are opening. Business will return to normal. And every business that travelled before needs to be ready to start travel again. So what do you need to be ready for?
Three months ago we had no choice when it came to travel. Governments closed borders. Restrictions were everywhere. Business as we knew it for our whole lives had ground to a halt. The daily chore of commuting to an office or meetings became video calls and work from home. Running late has never been less of an excuse. Oh, and by the way: you are on mute…
Everyone said we will never need to travel again. We would never need to travel to an office, meeting or for interstate for work ever again. The simple reality is that business travel will be back again. And, people will return to offices. The only real question is when and how quickly will business travel return. And, to what extent.
Business travel will be back, so how are you going to manage it
Many businesses have had the unfortunate realisation during the pandemic – you need to actually manage your business and your people. The same for suppliers and expenses. When the realisation occurred and business was affected – it became all hands on deck once again. Expenses and suppliers needed management. Set and forget contract management was not delivering the results many now needed. Although it should have never been an expectation.
Jonathan Dutton wrote about Supplier Relationship Management recently. It highlights how you lose value in any unmanaged supplier relationship. It took a crisis to make it clearer to people. There is a difference between managing a supplier contract and managing a category. Travel is no different.
Everyone responsible for travel needs to remember one thing. When the need or want comes back – it will need to be ready NOW. When the CEO comes knocking and wants a trip booked – I would recommend having all the prep done.
The good news is that a post-pandemic world travel program is manageable. It may mean some organisations need to re-think their previous approaches.
Near term and future travel will force consideration of a broader array of factors. Corporate negotiated rates and service fees represent only a part of spend.
The areas that will need consideration for many organisations are:
- Risk
- Duty of Care
- Travel policies
- Travel Management
- Insurances
Technology is not the answer for all aspects of a business travel program
Many of us marvel at the technology that is available today that was not around when we started out in our careers. For all the benefits that technology has delivered to us, one thing it cannot do is make decisions for us. It can recommend a decision, but it cannot make the decisions for us. Yet.
The limits on artificial intelligence are the parameters and constraints in a system. Created by a human. And, those inputs need to be set up, programmed and managed for it to work well. Any input that does not meet the right criteria becomes an exception.
The other week I was talking to a customer. They raised an issue with their current supplier in relation to the travel booking tool they use. All I needed to ask was – Is the issue the tool or the issue how it was set up and managed? There is a difference. One relates to the technology. The other to the service provider who implemented the technology. And sometimes the client who specified the requirements.
Technology is not an answer in and of itself. Not in travel and not any category.
Management of risk is more important than avoidance of risk
Let us get one thing straight for those who think that it is too risky to travel. The bad news is that there has always been and will always be risk in travel. The good news is that all risk is largely manageable.
If your competitors are travelling to meet your customers – you might decide to get off the fence. Because the alternative business risks and costs associated with not meeting your customers face-to-face may make you think differently.
There is risk every day leaving the house. But most of us still leave the house and do stuff. When we look at the risk of business travel it comes down to the same factors as before – even when things open back up. Terrorism, political unrest, natural disasters, rogue pilots and bad weather. They have always been and always will. Yet people have always travelled and will continue to do so.
The risks in business travel are generally very low (certainly compared to car travel). And, are manageable in much the same way as any other business risk. You need to consider all the factors. And decide whether you will manage risk in a conscious manner or subconscious manner.
You can do this yourself, or, use experts in the field to do it for you.
Write a business travel policy that matches the outcomes you are after
Ask yourself, are you after a policy or an outcome? Let’s assume an outcome is what you are trying to achieve for your business travel. Then the policy should reflect that. Anyone using a standard template and tweaking a few words should hang their head. These types of policies usually collect dust and never deliver an outcome.
A good travel policy should reflect the outcomes your organisation is seeking. It should also limit the loopholes that creep in from time to time. A general “at a managers discretion” leaves your organisation open to all types of spend abuse.
With the current pandemic, online booking tools have seen updates. Such as to accommodate COVID restrictions or other messages required for travellers. And, if you are going – it may be worth checking your policy is aligned to any organisational guidance.
Your policy should take into account what your current booking tool allows you to manage. It should also cover risk, travel expense and agreed standards. These are living and breathing documents that tell your employees what is acceptable. And, what is not. If it has been a while since you updated your policy, then it might be time to revise it.
While you are at it, take a look at your business insurance to make sure they reflect your current needs. If you are spending less – it could save you money on the cost of policies. It is important to note that insurance premiums are rising across the board.
Focus on the value rather than the price of services
When you focus on contract management rather than program management – over-reliance on price is a symptom. It is important to take all inputs into account. We should have all learnt this lesson already. But many continue to be blind to total cost and are lured by the attractiveness of a low price (which can often end up not being lower expenditure).
It can be attractive to pin a decision on how to do things or which supplier to use on the basis of price. This may shift costs elsewhere in your organisation. Maybe into people’s time or exposing your organisation to increased risk. One of the most common scenarios is doing the booking yourself. This unmanaged approach makes risk management difficult. It does not allow you to know who is where or when. In the post-COVID world with reduced on ground services, you could significantly increase your risk by leaving your staff high and dry in an emergency.
We for one would rather pay someone a modest fee to do a job well. Rather than pay someone on a higher per hour rate to take longer to deliver or manage a booking.
Let’s look at all expenses in relation to business travel
There is more to business travel expenses than the price of flights, hotels, vehicle hire or taxis. Expenses during a business trip include meals, incidentals and others. They often can add up to more than the cost of the trip itself.
Many organisations use many systems that do not quite talk to each other. At the least they can make it difficult to work out exactly what the cost of a single trip was. That is without some spreadsheet juggling. If you can get the data.
Organisations do use expense management tools for more than those who travel. Some obvious uses are corporate cards or expense reimbursement. A startling number of companies including large ones still use manual paperwork. This increases the cost to process. It also opens up issues with compliance. And it becomes fertile ground for fraud.
Certain tools also have the ability to integrate with your travel system. This allows you to be able to identify an actual cost per trip. This is very powerful and gives you the ability to manage the total cost of travel.
On what data are you basing your decisions on
If you cannot report on it, you cannot manage it is the standard adage we use. We spend a lot of time collecting data. Homogenising it and turning data or reports into meaningful information. This enables our members to manage their spend .
Many organisations struggle to get data in the first place. Or they choose systems that make the data that comes out meaningless. That is when it comes to understanding or managing expenses.
Travel is one of the categories that is very open to overspend when you do not have data to manage it.
You should be receiving a swathe of detailed reports from your current providers. This should include flight credits, benchmarking, compliance and performance. Plus measurement against an agreed cost minimisation program. Transparent sharing of data from your supplier is critical. If your service provider is not providing transparent reporting – can you trust their interpretation of the data?
Can you deliver an ROI managing travel yourself?
Like any area in business. The first question you should be asking is what outcome are we looking for. Then the first real choice you need to make is whether you can do it yourself well.
Then decide whether the cost of doing it yourself delivers a return on investment (ROI).
If you do it yourself but do a poor job – it makes no sense.
If you cannot justify the time and resources to doing it well – then you are like 98% of companies out there. The other 2% are spending millions a year (and they still cannot manage it all themselves).
Investment in resources needs to deliver an ROI. Always has and always will. It does not mean that it always has been viewed that way. Easy to let it slide during good times.
If you are part of the 98% – then it makes more sense to outsource it all to an expert.
It is time to start managing travel again
Whether there is a pandemic or not, travel needs management. Like all expense lines. If you choose to do it yourself, then you need to accept the responsibility that goes along with that.
Choose to do it all yourself and it could be costing you more than the saving of that cheap fare you find online. There is the cost of time, flight change fees, flight credits, poor expense management, no exposure to off the grid pricing, and risk. Especially in the event of an external issue.
Over the past 20 years, we have worked with hundreds of companies on their travel programs. Experience counts and we know it is important to get it right. Whether you choose a bundled or unbundled approach.
A good travel program is more than individual pieces or contracts. It can deliver value beyond the sum of its parts. But it needs management.
You will need to be ready when travel starts again. So our recommendation to everyone is get ready now. And take the time to get your travel program right this time.
