Amid the current global pandemic, companies are either surviving, adapting to the situation or on a growth trajectory. However, reduced travel and increased cost-control has led corporations to delve deeper into their Travel and Expense (T&E) management processes. They want to figure out how transformation could achieve cost efficiencies and business objectives when markets open up.
At Amadeus, we commissioned Forrester Consulting to run a survey with finance, procurement, travel management, IT and HR leaders across large enterprises to explore the current state and challenges with T&E management processes and tools. The survey revealed that enterprises need to rethink their T&E technologies to digitally transform, improve employee experience, and enhance the efficiency of financial operations through automation and integration. In this blog, we shed some light on the insights from the study, talk about the challenges related to T&E that corporate finance and procurement departments experienced during this time. We also delve into the opportunities that can help accelerate business success through modernization.
For example, 73 percent of businesses agreed that improving T&E management tools and processes are critical to their digital transformation journey. A similar proportion said that improving T&E management is key to reducing cost and increasing operational efficiency and improving employee experience and engagement. With over 75 percent of businesses planning to increase operational efficiency in the next 12 months, they strongly feel that technology vendors can significantly help in advising them on the digitization of T&E.
Challenges
Long processes, fragmented solutions, security and compliance are the top challenges that companies face with T&E management. The slowness of end-to-end processes, especially the time to submit and approve expenses along with the lack of a global solution for all entities have proven to be a bane for departments across the globe. Additionally, for companies using an online travel tool, the expense side can often be an entirely different experience. Finance and travel management leaders revealed that a large chunk of time is spent on travel booking by employees, travel approval by managers, and expense processing by finance teams, while the longest part is expense processing and reimbursements.
Cumbersome processes
Finance and IT managers reported that the end-to-end T&E management process at their firms burden employees, managers and accounts payable teams with manual tasks that are repetitive and low value. Between 21 percent and 30 percent of firms indicated that various tasks of T&E management are mostly or fully manual. On top of that, poor integration of T&E management tools with other ERP or daily work travel systems increases manual burden further. Interestingly, the integration issue is not only between T&E management tools and other solutions, but 32 percent of firms with cloud solutions also noted poor integration between their T&E tools as well.
Legacy tools in a modern world
In a highly digitized world today, it is surprising to see that a significant number of companies still rely on traditional systems and tools for T&E management, like spreadsheets. Only 15 percent of all enterprises that the research surveyed had a cloud-based solution for both travel and expenses management. Even among centralized companies, 22 percent still relied on spreadsheet solutions for expenses. In some cases, there is not even an electronic solution! However, the satisfaction with current T&E tools and processes varied by department. For example, over 30 percent of finance and accounting leaders were not satisfied with the current level of automation, integration and reporting capabilities. On the other hand, 88 percent of travel management departments were happy with the overall technology and processes.
Employees face the brunt
Firms without an integrated platform for T&E management state that the employees complain about cumbersome, restrictive processes for booking travel, exacerbated by issues with platforms that do not provide value-add information. For expenses, lengthy and manual processes for submitting receipts and expense reports are top employee complaints. The study cited that organizations recognize that problems with their T&E management have a direct impact on employee experience and business operations. HR leaders indicated that T&E management issues cause decreased employee productivity, poor engagement, decreased retention and lower employee satisfaction with work technology. These challenges also result in inefficient business operations, including delays in reimbursing employees and poor workload management.
Opportunities
Firms with an integrated T&E management tool faced fewer challenges than other companies and indicated greater satisfaction with all aspects of their travel and expense management. According to the study, nine out of 10 companies with an integrated tool were satisfied with their overall T&E, ease of use and accessibility. More than 85 percent were satisfied with the level of automation, integration and reporting. This is primarily the reason why 73 percent of companies that had integrated tools were planning to expand or upgrade their solutions.
Enterprises also mentioned that standardized global and integrated tools include better compliance with policies, increase user satisfaction, and improve financial planning and analytics within the firm. Especially with the challenging times that we are facing, an integrated tool tends to support other business objectives, including greater digitalization and efficiency of operations, and improve the ability to handle duty-of-care obligations through greater visibility into employee travels.
An integrated travel and expense management tool could also bring out critical priority areas and capabilities for specific departments. Finance, HR and Travel Management departments could get automated policy violation notifications; the IT and Procurement departments could have insights from analytics and data reporting capabilities of the tool; finance could handle multiple workflows and procurement could receive direct images via features like photo capture for easy verification.
The road ahead
The top priorities around T&E management are to improve the end-to-end experience of the process, even for job roles traditionally perceived as cost-driven, like finance, procurement, and IT. Data analytics to gain actionable insights is also important. Beyond these priorities, finance, procurement, travel management, IT, and HR had differing views on other top objectives which we will discuss in our future blogs on the research.
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