If you and your employees do a lot of traveling, you may have come to the conclusion that you need a corporate travel management program. It's an inkling that's hard to ignore once you realize that money is being wasted, flights are being missed, your company's travel plans are unorganized and you and your team are stressed out.
It doesn't have to be that way, of course. In order to address these issues, you just need to start asking—and answering—some key questions.
Who are the key stakeholders in CTM?
After all, if you're going to put together a program, you have to know who the players are.
In a typical corporate travel management program, the major stakeholders are often…
- C-suite and senior management
- procurement officers
- human resource officers
If you can find a way for your corporate travel management strategy to make your stakeholders' lives easier, then you're onto something.
When should your small business find a CTM solution?
It'll probably be obvious, due to costs, but hopefully you can find a CTM solution before stress and financial waste becomes a regular occurrence.
Kathie Jones is the CFO of HCB Health, a full-service marketing and advertising agency specializing in the biopharma and medical device field. She joined the company in June of 2017 and was startled by what she found.
“They were still using paper expense reports, which did not lend itself to a solid internal control system with regards to a travel expense policy," Jones says. “I evaluated the YTD travel costs as a percentage of revenue and was disturbed by how high the expenses were. I drilled down and even discovered employees were staying at The Ritz!"
I think if you really sat down and calculated the man hours, travel management software would more than justify its costs.
—Deven Crane, director of travel services, Incentive Solutions
Jones quickly came up with a new travel and expense policy, and began using a travel booking and expense management software.
At what point in a small business's journey should they consider committing to a robust CTM program?
There are a number of warning signs that will let you know it's time to adopt a corporate travel management program.
Wasted time before the trip: Are you or your employees spending a lot of time searching for and booking flights?
Wasting time during the trip: Do trips seem to take an unreasonable amount of time? Is your hotel usually out of the way from the location you're visiting?
Wasting money during the trip: Yes, you know that travel costs money. But do you have the sense that your company is wasting a lot of money? Are you optimizing the rewards on your business travel credit cards?
Jones implemented new travel policies after seeing the waste in her company. Some of the parameters included:
- a maximum cost per night for hotels,
- airfare had to be within $100 of the lowest fare and
- booking had to be made within 14 days of travel.
The company saved over $400,000 in travel costs in 2018.
It's hard to say exactly when it's time for a company to implement a CTM. But having a lot of employees who often aren't in the office because they're traveling is a pretty good clue.
“I think that smaller companies—as in under 20 or so employees that don't travel much—can probably get by without building a corporate travel management plan," says Deven Crane, director of travel services at Atlanta-based incentive program provider Incentive Solutions.
"Maybe even a bigger company can get by managing their travel program internally if only a select few employees regularly travel," he continues. "However, anything past that, and it's time to start looking into budget considerations."
Why your small business should build a CTM solution
The simple reason companies create corporate travel management programs is to save time and money.
Even if you feel you were a travel agent in another life and are a whiz at finding excellent travel deals and know how to use credit card rewards better than the credit card executives who design these programs, you probably are spending more time than you need on mapping out everybody's schedules and travel plans. If you have a lot of employees who travel, a corporate travel management solution can make your business far more efficient.
You might want to ask yourself what you're risking by not having a corporate travel management plan, Crane suggests.
“For instance, a bad travel experience could damage your brand with clients or sour a high-value employee on your company—or worse," he says.
What are the key efficiencies in establishing a CTM program?
There are several key efficiencies, or ingredients if you will, that make a corporate travel management program successful. Whatever your CTM program looks like, you want it to cover…
There needs to be a way to track whether employees are living up to the rules your business has set, so travel costs don't go out of control.
If you set expectations that nobody will stay in a hotel over $300 a night, a good CTM program, such as a corporate travel service working for you or a travel booking software, won't allow anyone to book a $600-a-night hotel.
2. Billing and payment processes
This is where your travel expenses can implode pretty quickly. You want consistent billing and payment processes across the board. And ideally, there would be a way to earn cash back or miles to plow back into more business travel or to give employees as a reward.
If you have employees who are spending hours compiling expense reports and sometimes forgetting to turn in receipts, or if you're rarely utilizing rewards on business travel cards, you can start to see where things can go wrong.
3. Preferred vendor programs
When you partner with certain airlines or hotels that offer cash back or points for traveling and staying with them, your travel budget is likely to stretch a lot farther than if you're going with whatever seems like a good idea in the moment.
4. Ease of use
Wouldn't it be nice to be able to keep track of receipts digitally and have them automatically show up in one database (or an employee's digital wallet) so they can be easily filed in an expense report?
Well, you can do that with a robust corporate travel management strategy!
Travel takes time, and time is money. When you're spending a lot of time on the front end, during and after the business trip, it costs you far more than it should.
How your small business can implement a CTM solution
You have several options, including…
1. Licensing a booking program, tool or platform.
That's the path Jones took.
“When you book on the software, the airfare receipt automatically shows up in your wallet for use in your expense report filing," she says. "All receipts can be taken as a photo on your mobile app and conveniently available in your wallet. All of these features allowed for better compliance."
2. Hiring an agency.
You might want your business to work with a corporate travel management agency. The main question you'll need to get answered, according to Crane: “How much would we save on airfare and accommodation by working with a corporate travel management company?"
"Generally," he continues, "travel management companies qualify for bulk discounts, preferred rates and priority placement since they buy directly from vendors so frequently."
3. Hiring an internal employee.
Somebody on your staff could handle all of the travel plans for your company. Here, again, it's all about the math. You'll want to ask yourself, “How much would it cost to pay a salaried employee or employees to manage our travel program versus outsourcing it to a corporate travel management company?" Crane says.
You also will want to make sure whoever you assign to work on your corporate travel has some experience in corporate travel. It can be a complicated industry, and it helps to understand how to negotiate rates and perks with preferred vendors. They'll need to understand dynamic pricing and how to book high-quality lodging without killing the budget. And, of course, they'll need to be super organized.
In other words, you need somebody who operates like a booking platform or corporate travel agency.
Building travel policies and approval workflows
Nobody needs to be told that having travel policies is a good idea. The trick is building policies that are realistic and, once you do, developing a workflow that makes it easy to approve and schedule travel quickly.
Let's say you have travel request forms that need to be signed off before airfare or hotels are booked. You'll want to have your workflow developed so a form doesn't end up sitting in somebody's inbox for days or weeks at a time.
That's where travel management software can come in handy: Employees and managers can create, submit and approve expense reports, and check the status of those reports that seem to have disappeared into the abyss.
Selecting a corporate travel management solution
To make things right with your travel policies, you need to figure out what went wrong in the first place.
Do you feel like you're always dealing with terrible customer support? Or are you struggling with employees who aren't complying with the policy? That's where software, an agency or an internal employee serving as traffic cop can really help with those issues.
“Whether you manage your program internally or outsource it to a travel management company, I think travel management software is a must," Crane says. "Manually booking accommodations and organizing your database in, say, an Excel sheet, would run up time costs and leaves too much room for error.
"I'm sure some companies still manage things that way," he continues, "but I think if you really sat down and calculated the man hours, travel management software would more than justify its costs."
Communication between all of the stakeholders is extremely important as well, he adds.
“Leading up to the trip, travelers need reminders, they need itineraries, they need to know dress codes, how to navigate the airport, what they should pack, whether they need a visa. The list goes on. Businesses use software to streamline communication all across the board. Travel management is no exception," Crane says.
Look at it this way. Not having a corporate travel management strategy is having a corporate travel management strategy—just not a very good one. But creating a really efficient and comprehensive CTM can take your business far.
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Photo: Getty Images