The sharing economy, big data, mobile technology, customisation, bleisure: these are charged words in the travel industry. The corporate travel sector is experiencing a period of rapid change. It can be a difficult task for organisations to keep up with the shifting sands.
Now more than ever, companies are faced with decisions about how best to manage employees' business travel. However, decisions about how to manage travel are tied up with another factor: ultimately, it's not always clear where exactly this responsibility should sit within the organisation.
Corporate travel: too many cooks?
It may come as a surprise just how many companies don't actually have a dedicated travel function or managed travel programme — even when travel spend is high. More often than not, corporate travel is managed by a number of people across an organisation, from the procurement department, to human resources, to individual personal assistants.
We often hear of the benefits of including different stakeholders across departments. The wide range of skills and experiences needed to complete the travel booking on both the demand and supply side means that a high level of collaboration must take place between departments in order to ensure an efficient travel management process. Besides, who is in a better position to understand your company culture than someone who works in the organisation? However, when the responsibility of travel management is spread across such a large group of people, there is a danger of procurement, for example, not becoming as focused as it should be, especially if the priority is to drive demand management.
Sharing responsibility for travel in this way, rather than having a dedicated travel function, can cause problems. Each department has its own agenda and business objectives that need to be met and these often conflict.
Travel can easily be swallowed up by other departments and priorities ©Topp_Yimgrimm/iStock
For example, procurement departments are focused on purchasing goods and services in the most cost-effective way. In companies without a dedicated travel function, individuals within procurement departments are often responsible for both sourcing travel suppliers and managing the travel programme but there's an inherent conflict between the supply and demand aspects of this role.
The focus of any procurement team is reducing the cost of travel supply, but in focusing too squarely on cost, rather than other metrics, such as traveller wellbeing and satisfaction, they risk negatively affecting the experience on the demand side, that is, for travellers. This in turn could have wide-ranging implications, even affecting seemingly unrelated outcomes such as employee turnover.
The hidden cost of sharing responsibility for travel management
In some companies, the travel manager function sits within procurement, or spread across other roles and departments. Why? They believe a dedicated travel manager or travel department is too costly and that volumes and spend are too low to warrant a tailored programme. What's more, companies tend not to take travel management seriously enough; because the costs of a managed travel programme aren't descriptive, people are unaware of the real cost of investing in a programme. This may be enough to deter smaller organisations from dedicating precious time and resources to a managed travel programme. However, it might be wiser to feel more anxious about the prospect of an unmanaged system.
In truth, the cost of unmanaged travel spend can be enormous. Without a dedicated travel function, a company likely has employees who, unbeknownst to their managers, spend 20-30% of their time managing travel, with personal assistants and procurement professionals experiencing severe 'scope creep' that prevents them from concentrating on the most important aspects of their job. If you were to add up this time and headcount, the cost would probably be well in excess of a dedicated travel manager. The danger is that organisations typically have very little visibility over this set-up - it is difficult to detect, let alone manage, something invisible.
This in turn then raises questions about a corporation's responsibility to provide necessary support and care to their travellers as their corporate policy dictates. Given recent geopolitical instability it comes as little surprise that safety and security top the list of priorities for company executives - ahead even of cost control, according to our 2015 EVP Barometer. Against this backdrop, it's more important than ever that companies have dedicated resources to look after travellers. One of the most valuable roles a structured and centrally managed travel programme plays is in fulfilling your duty of care programme. Whether you are a global or mid-size company, you have a responsibility to ensure that you've done everything in your power to mitigate risk to the traveller during their trip.
Centralising the travel management role and its responsibilities
It's clear, therefore, that organisations stand to gain by proactively taking action and investing in travel management specialists. Having a dedicated travel management team gives breathing space to find a more cost-effective solution that also focuses on maintaining demand through providing a more holistic, traveller-centric programme. A corporate travel programme is a significant undertaking, encompassing responsibilities such as duty of care, risk management, supplier sourcing, policy development, communication and demand management. Putting these responsibilities in expert hands gives companies the greatest chance of success when it comes to travel programmes.
If companies want to make travel programmes more streamlined, accountable and cost-effective, the responsibility for managing travel shouldn't reside in the procurement bucket, or be scattered across the organisation. A dedicated travel management function — whether this is a single travel manager with specialist knowledge, or a dedicated team — is invaluable. The returns on the investment can are wide ranging and not to be overlooked.
Having a managed travel programme means your total travel spend, policy compliance, and associated costs are much more visible. Coupling this with a dedicated travel management function, which will streamline processes and effectively manage demand and policy change, creates a best practice approach to corporate travel. The travel manager will closely collaborate with the procurement and HR departments — but will also allow them the time and space to fulfill their primary responsibilities.