With the advent of the computer, we replaced the type-writer; with the advent of the mobile phone, fixed phones are becoming a rarity. Each technological solution addressed a particular pain-point or need, allowed for the development of new services and revenues, and required an up-skilling of the labor force.
So what about Travel Arrangers and Business Travel Management?
Business Travel Management
There is much literature and research conducted on this subject, seen that it is one of the highest controllable costs that a corporation will bear (see previous article). One memorable one was conducted on 600 corporations in Western Europe, detailing the % of these and the types of services they sought from their Business Travel Agency or Travel Management Companies (TMC). Ranging from Policy Definition, Supplier Selection Assistance, Expense Reporting, Repatriation, etc… the one that hits you smacks you in the face was “Online Booking Tool”, with an clear 20-30 point win ahead of all others. Totaling a whooping 56% of all corporations in 2013 having purchased one, this one also saw the largest increase in 1 year – another 10 points, totaling 66% of all corporations in 2014. This number is expected to have another clear rise for 2015 (although now tangled with an Expense Management System or EMS, is the burgeoning trend).
Advantages for Travel Arrangers & Managers
Naturally for Travel Arrangers or Managers savings is great, but the $$$ don’t necessarily get into their personal pockets. And although Travel Arrangers or Managers might not be the ultimate decision makers, they certainly have a heck of influential weight when it comes to deciding on solutions that will waltz through their front door. So what’s in it for them?
More research on 1000 interviewed travel managers, asked why did they chose an Online or Self Booking Tool (OBT or SBT). Reasons such as Single Window, Multiple Searches, Automated Reporting, Integrated Approval Flow, and about 5 other reasons were cited. In essence, all the reasons could be categorised into 2 parts: Automation & Simplicity.
The Impetus for Efficient Travel Management
Since 2008 and the global financial crisis, corporations have been on more-than-normal regimes of cost-cutting on every aspect of business than normal. Cost-cutting programs that have always existed of course, but clearly one could agree these ‘leaning’ programs are more prevalent today and this of course set the scene for efficient travel management strategies!
Business travel is classified as the 2nd or 3rd highest controllable costs for many corporations (after wages) but clearly also a necessity for business growth – thus clearly in juxtaposition! So how does one reconcile the $ cost of business travel with the critical need for growing or even protecting one’s business?
One of the answers was or still is, having well defined travel management strategies. However, efficient travel management strategies do not happen overnight, they occur through a slow and painful process of trial-and-error. Starting with some loosely defined controls, on budgets, rules on fare (economy vs business), or how many days one must need to book before travel, etc… this was all without much vision or global-financial cohesion, but at least a first attempt at controlling the easily definable direct costs, based mostly on common travel-industry best practices.
Industry research on over 600 corporations show that a well designed Travel Policy (a simple one – based on 5 points) and more importantly one that is systematically enforced, can help corporations save up-to 22% on total Travel & Expense (T&E) costs. Some might say “well we already have some travel policy criteria”! Thats great! Really! But the question is do you all 5 and ALL the time, no exceptions? Mmmm good but tricky question.
Rise of Travel Arranger
Continuing on the evolution of good travel management strategies, we now typically see the placement of a ‘travel manager‘. Someone responsible and in-charge of making critical decisions on how travel should be managed. But where does he/she come from? Travel managers dont just appear out of thin air?!
And voila!! the rise from the travel arranger. These typically blossomed from positions of secretarial nature helping employees (and mostly managers) book their travel needs and this was usually done via email or phone. Market research indicates that we can see an average of 8 calls/emails to finalise one single booking! Very manual intensive and time-consuming one could agree. And that is pretty much where the buck stops in relation to travel responsibilities. Nothing more. Simply processing those requests.