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No one can deny that making the most out of analytics and feedback loops is vital in unlocking maximum value from your travel spend. So why are so many businesses finding it so hard to make happen?
In today’s interconnected global economy, business travel is essential for growth and expansion opportunities, broadening cultural horizons and uncovering new ways of working. So it’s no surprise that it is the second largest indirect spend for most businesses.
Yet, businesses around the world are still struggling to quantify the value of business travel – more so than other areas of corporate expenditure. In order to help businesses achieve a better ROI on travel and expense (T&E), we commissioned the London School of Economics to explore how it’s managed within some of the world’s largest corporations.
Underuse of analytics and reporting:
One of the big takeaways from the Managing Every Mile research is that many businesses are skipping best practices in T&E management. This is particularly true when it comes to using analytics, reporting and feedback loops to optimise T&E sourcing.
"Businesses are struggling to quantify the value of business travel."
Analytics and reporting is one of two T&E management stages where very few best practices are being implemented (the other being T&E buying). This is a result of poor processes being adopted in the earlier stages of the process – namely strategic sourcing and buying.
Meanwhile, functional limitations in organisations’ T&E IT systems are another contributing factor. In the study, 25% of COOs indicated that the implementation of analytic functionality is impeded by legacy IT, along with wider organisational infrastructure issues.
Siloed data is an added stumbling block – a flow-on effect from poor IT-enablement and an often fragmented approach to managing the overall T&E process. The study reveals that organisations are struggling to create visibility into both managed and out-of-program travel bookings, often requiring manual workarounds to consolidate reports from multiple sources. And this problem is widespread, with 80% of executives revealing they don’t have the required information to undertake more strategic T&E sourcing.
Find the numbers. Use the numbers:
While the challenges in implementing best practice analytics and feedback loops into the T&E process are evident, those organisations that can overcome them will benefit enormously from significantly improved ROI.
"80% of executives don’t have the information to do more strategic T&E sourcing"
Analytics is the key enabling factor to help businesses drive more strategic decision-making within T&E. By enabling full spend visibility, opportunity identification, the ability to easily identify behaviour that needs attention and the establishment of automated feedback loops to optimise ROI, enormous business value can be delivered.
Organisations that establish feedback loops and utilise real-time analytics are able to automatically identify proactive opportunities in the T&E sourcing stage. This could be using real-time travel patterns and demand to optimise sourcing, or identifying the travel profile for different executives and aligning this with strategic objectives (i.e. the servicing of key accounts). Analytics can also be used to highlight compliant and non-compliant travel, as well as sourcing spot deals.
"Analytics is the key enabling factor to help businesses drive more strategic decision-making within T&E."
It’s not just the sourcing stage that benefits from improved analytics and feedback loops, the T&E buying stage is also optimised, with businesses able to initiate real-time changes and generate savings through proactive buying.
All in all, a more strategic approach to travel and expense management is vital if organisations want to maximise the value of their investment, and make the most of cost savings, improved productivity and efficiency gains. The implementation of improved analytics, reporting and feedback loops is crucial to delivering this.