Q: Where are the savings coming from now that travel managers have put policy in place, consolidated markets and negotiated supplier deals?
A: Savings will increasingly come from behavioural change but that is only sustainable if managers recognise that most companies embrace a diversity of objectives and behaviour within their organisations. Flexibility in approach to different parts of a business is essential to good travel management.
Organisations
Travel programmes vary in character and expectation. There are many reasons, including the nature of different industrial sectors. For example, there are some organisations in the financial services sector where hierarchical management structures have a board that leads different layers of management suggests a greater likelihood of centralised decision-making. On the other hand, some partner-based organisations may be formed of many partners, all of whom are autonomous and therefore likely to want to make their own decisions about travel.
The sector can also affect the approach towards travel management. A manufacturing company may see travel merely as a means to an end, while a consultancy might consider travel to be more central and strategic because its business success depends upon its ability to move people effectively to where their projects are based.
Just as different sectors may have different attitudes towards travel, each company will have its own unique internal organisational structure. A strategic understanding of this is necessary if further savings in mature travel programmes are to be achieved.
The organisation's internal customers
A company may have one overarching corporate goal but it is probably comprised of many business units and budget-holders, all of whom will have their own objectives to meet in order to support the corporate targets. They are therefore likely to have different travel needs in terms of service, technology and approval process and their travellers will also have specific KPIs and requirements.
Such organisational diversity means that one size does not fit all. Different approaches to how travel is managed within any one company are critical to mutual success.
Companies usually have a travel programme with a central overlay of compliance, control and consolidation and there is likely to be an umbrella global or all-encompassing travel policy. However, very few policies are mandated and there is often latitude for local budget-holders to make decisions about how to allocate their travel budgets.
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Travel programmes have to cover various business and traveller types ©Rawpixel/iStockThese 'local' needs can best be understood by remembering that all companies have both a 'vertical' and a 'horizontal' organisation.
A vertical approach looks at a company from the point of view of its hierarchy. A board, C-level executives, managers and travellers will all want something different from the travel programme in terms of their goals and objectives. It is important to recognise this when constructing the analytics for any travel project.
A horizontal approach looks at an organisation's different departments from sales and marketing, to HR, R&D and operations, to evaluate their respective travel needs.
It's a complex matrix with each group — and people can belong to more than one group — having distinct objectives. Some of these sub-groups will have complex travel needs; others will do nothing but simple, point-to-point journeys.
Data collection and analysis, travel policy and management might have, out of necessity, been more of a blunt instrument before advances in technology. Decisions were made about travel on a company-wide basis.
However, data now allows us to understand the objectives of these internal customers or stakeholders. We can advise them on how to take advantage of any potential savings while also providing the travel service they need.
For example, in the past a company might have just issued an edict for a blanket ban on non-essential (ie all non-client-facing) travel to reduce costs. The new approach is to give every group their own budget targets and they themselves make the decisions about how and what to spend to achieve objectives.
Most travel managers will have negotiated their supplier deals. But savings don't stop there. Travel management is about more than the deal. Behaviour affects cost. It doesn't matter who it is in the company - advice can be given to anyone about what's out there that matches their needs.
Some areas need flexible tickets and book last minute, so a restricted ticket at a lower cost may be a false economy in that instance. Others book in advance and there are no external forces that affect the departure or return dates, so a restricted ticket is more appropriate. The point is that different divisions have different travel patterns and the policy and guidance should reflect that. With the continually evolving unbundling and bundling of fares and rates, it is more important than ever that bookers are able to identify what components of a trip — from flexibility to booked baggage — are priorities or even necessary. The travel team can then give advice on the most appropriate fare, 'hand baggage only' say, for the kind of journey being undertaken.
A greater recognition of the overlays among different business units across the business and the different functions going vertically throughout the organisation goes along with the rising interest in strategic meetings management.
This is because the same people are going to training and events as are undertaking transient travel for business. So the travellers are the same and so too are the suppliers. The management is different but there are a lot of similarities. You could be using the same airline or the same hotel. The travel management team should be able to combine the same data sources to make a consistent picture from which to make recommendations.
It wasn't long ago that travel managers were just keen to have MI — management information — which would basically give information about top routes, fares paid, exceptions and the rest was left to the travel manager.
Travel management is now much more about business intelligence reporting rather than simple data. The work is no longer in capturing the data. It's in the interpretation, analytics and recommendations about what customers could do differently to achieve savings.