The cost of inefficient travel processes – BUSINESS TRIPS

The truth about regularly B-Trips

I just want to write something about this topic which is very common in many organizations/companies . I am talking about BUSINESS TRIPS.

I’ve have seen and done a lot of such activities during my professional career in engineering too. To do a business trip to your customers or supplier can generate a positive impact to your “on going’’ project indeed, but if you do that often on weekly (or even monthly) basis WITHOUT having a plan or an agenda of your effective activity during that B-Trip it is rather a complete waste of resources (money, time, expertise …you name it). I experienced that myself a while ago when I had to travel in different countries almost weekly, 2 or 3 days. I was continuously tired. At one point you can even succeed to annoy your supplier or customer with your useless visits, when you have literally no reason to be there. But many employees just go in BT, because their boss wants so.

Your organization (well… in fact your direct manager who approves your travel) thinks that if you are traveling automatically means you return with improvement in process or design or whatever his dream is. If you travel just because your boss wants, that’s such a huge waste. You’re not smarter than a frog which is jumping randomly in case a threat is posed.  If from your point of view is not relevant to go and you know exactly what are you talking about, then DON’T GO.

But unfortunately the opposite is exactly what’s happening in many cases.  Some  « technical » staff travel just because it is the management wish to do that, but not because they have a clear purpose for it. Travel and expense policy of a company is created to limit the expenditure of an employee while on a business trip.   But in such a case, many employees take advantage of this and charge additional expenses to fill their own pockets. Making an effective travel expense policy is a time consuming process and producing a fraud proof one is even harder. Proper guidelines are crucial to control the outflow of money. 

Business Trips are often a pretext to have a short holiday.

A typical large business loses 20-30% due to inefficient processes in their travel program. Maybe even more. And the main responsible for that is the incompetent manager that blindly approve it or demands his team member to go there but without having a clear purpose.

As I said travel is a business expense that can produce a significant return on investment if it is conducted properly. That means :

  • 1. adopting a policy tailored to your needs,
  • 2. contracting appropriate suppliers and  
  • 3. implementing processes that maximize efficiency.

Unfortunately, those three elements don’t always align, leading to cost blow-outs, supplier disputes and traveler frustration. Here are 9 common pitfalls I’ve seen/met so far – and potential solutions.

1.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 literally doing their jobs – but 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 organizations have dedicated travel bookers to handle their bookings. Whether your travelers 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.

2. Booking the wrong services. Your team has done the market analysis, selected suppliers/customers and negotiated rates. But the savings you have chased will not materialize if your travelers 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 travelers to make the right choices. If your policy does not allow business class on domestic flights/hotels, your booking tool shouldn’t show it. Your tool should default to approved suppliers and specified services, helping to ensure traveler compliance.

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

4.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. It is already known that there are huge benefits in booking early and booking smart. But those savings evaporate quickly if your travelers constantly change their plans. This is equally valid for hotel bookings, too. Your TMC should be able to analyze your past travel patterns and advise on the optimal timing of bookings – and the kind of fares that suit you best.

5.Unauthorized 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.

6.Accounting costs. Besides booking travel, your team also needs to monitor the spend. Many organizations 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.

7. Loss of negotiating power. When you sit down with your suppliers/customers 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 you or your team travelers 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.

8. Looking for missing travelers. 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 travelers 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 traveling at any given time? If all bookings are made according to policy and with the appropriate tools, it’s easy to pinpoint all your travelers – 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.

9. Automate, integrate and save. Business travel can be complex and traveler behavior 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. 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 travelers to get what they’re expecting, without any nasty surprises for your other stakeholders. So here again, Artificial Intelligence can be largely deployed.

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