Twenty years ago, an HR executive asked me how to evaluate the success of a managed travel program. As a result, I created a checklist of the components of an effectively managed corporate travel program as my scorecard. Since then, I’ve used and shared this resource checklist with new travel managers and companies approaching travel management for the first time. It has changed through the years, but it provides the main elements of a well-managed program. Word of advice: You may not be able to tackle everything at once. Take a step back and create a plan to address the following areas one by one.
T&E Policy
A successful travel policy provides clear expectations for traveling employees about how to book their travel, what expenses are allowable, ethical expectations and which suppliers are preferred and creates awareness around traveler safety, as well as how travel affects the organization’s bottom line. Travel policies should address both global and regional/in-country variances, reflect the culture of the organization and, while establishing controls, provide enough flexibility and choice for travelers to achieve business objectives. They should also address the issue of supplier loyalty programs and how points should be handled. These days, many of the policy directives around booking guidelines, preferred supplier usage, advance purchase and other details can be configured into the shopping, payment, booking and expense process in a company’s online T&E tool. This can simplify what used to be a lengthy policy document that might fall into TLDR (too long, didn’t read) territory. Don’t forget to educate travelers about the benefits for them in a managed travel program; upgraded amenities and services mean a lot, as does traveler security. Work with procurement, HR, finance and accounting stakeholders to ensure all company policies are aligned.
Travel Management Company
A corporate travel agency, also referred to as a travel management company or TMC, offers many program benefits and services. In addition to processing all transactions, supporting traveler security processes, maintaining the company online booking tool and providing reporting on associated policy compliance, your TMC can advise on policy development, implementation and ongoing program management and often will offer support services for supplier sourcing efforts. Organizations that do not have adequate travel volume to achieve contracts with suppliers can take advantage of deals already negotiated by their TMC. Ideally, midsize organizations should limit their TMC relationships to one or two partners. If the organization is global, there could be an argument for a regionalized approach to TMC partnerships, but there would have to be volume to sustain it. For midsize organizations, the TMC generally provides access to online self-booking technology and dedicated or designated travel agents to support complex reservations. Agents should be accessible via phone, email and, these days, chat or text messaging The TMC should also be the first touchpoint for booked travel reporting (see page 38). Very importantly, TMCs offer support to travelers experiencing disruptions and can largely remove these issues from the travel manager’s responsibilities.
Online Booking Technology
Corporate online booking technologies may appear similar to consumer travel booking websites. However, managed corporate booking tools allow for policy configurations and content biasing, which places the organization’s preferred suppliers at the top of search results and flags selections that fall outside policy parameters. Booking tools can be set to notify managers of out-of-policy bookings, and if the organization chooses, these tools also can traffic itineraries to managers for approval before final booking. Using an online booking tool reduces the fees TMCs charge for agent-assisted bookings. For this reason and for the convenience that self-booking offers travelers, many companies strive to direct a majority of travelers to the online tool. Complex itineraries and VIP travelers may still require an agent.
Expense Technology
While online booking tools often are accessed via a reseller agreement through the TMC partner, this is not always the case with expense reporting technology. In fact, many companies implement an expense reporting technology before they venture into travel management technology. The TMC can consult with clients regarding an integrated T&E supplier. If the client organization already has an expense system in place, it is ideal to source and implement a booking tool that will integrate easily with the existing expense technology. Online expense technologies ease the travel expense reporting and reimbursement process for travelers. Travel managers should work with the finance department to align travel policy with expense policy and optimize associated technologies, as the two are closely related.
Payment Solutions
Corporate cards, purchase cards, virtual cards and ghost central bill cards are all payment methods associated with travel. Again, payment solutions may or may not be the sole purview of the travel manager in a midsize company. Finance and treasury also may be involved. Travel managers should understand types of payment solutions available to travelers, as well as the billing and liability structures behind them. In North America, although individual billing with individual liability has been thought to protect organizations from risk, corporate liability/corporate pay tends to yield the best financial return. Payment solutions need to align with the culture of the company and with the employee population. Travel managers should work with finance to define payment policies and procedures so the payment types selected can be implemented correctly within the travel booking process.
Strategic Sourcing
Preferred supplier relationships generally provide rate discounts and/or enhanced amenities and services for an organization’s business travelers, but they are based on the client’s travel volume and often on marketshare requirements and/or guarantees. Although some smaller midsize companies may not be in a position to forge preferred relationships directly with suppliers due to lower spend volumes, they can leverage their TMCs’ supplier relationships, benchmarking and buying power to optimize savings.
Travel Spend Reporting
Travel spend reporting is key, and there are many sources of data. The TMC is the logical first choice for data analysis, but it likely provides only travel booking and purchasing behavior data and may not reflect actual travel spend. Still, it provides a lot of information that travel managers require, including advance purchase percentages, lowest logical fare utilization, class of service percentages, unused nonrefundable ticket utilization, preferred supplier performance and agency performance against contracted service level agreements. Expense systems and payment solutions also offer valuable travel data, and more organizations are combining these data sources to get a full view of their business travel activities.
Expense Reporting
Expense data combined with payment data can provide the best view of actual spend data for both travel and non-travel related business expenses but typically will not reflect the itemization required for tax reporting or show the booking behavior, ancillary fees or type of booking unless the expense system requires employees to perform the itemization and reconciliation. It is also necessary to normalize expense system data globally and when compared to payment or TMC booking data, as the merchant/receipt data provided may nor align. By-country policies may not align, either. Global expense policy alignment, whenever possible, is critical during the expense technology implementation in order to yield the best results in actual spend reporting globally. New technology providers offer travel, expense, payment and HR data integration and normalization for improved and timely visualization of both booking behaviors and actual spend categories for improved policy compliance and program optimization.
Traveler Duty of Care
Traveler safety and security and how the organization provides duty of care to business travelers have become an increasing focus over the past few years. Travel managers should use their TMC and corporate security partners to access both pre-trip reporting and country risk ratings to understand which, if any, trips are considered high risk and require mitigation strategies before the traveler departs. The organization also may tap into travel risk alerts from their agency and/or corporate security partners and lean on them for logistical support in emergencies. Company security departments typically contract with third-party risk management and insurance providers to supply on-the-ground assistance to travelers in crisis. Travel managers also may want to require in their policies that travelers executing high-risk travel check in with the organization on a regular basis. Organizations also should include technology guidelines in their travel policies to secure data and intellectual property.