ASK THE EXPERTS
A positive investment
How do you build a business case for your travel programme?
T
HE ADS MAY DEPICT BUSINESS TRAVEL as a well-dressed person being offered a glass of champagne to sip while snuggling into the lie-flat bed. But back at the office, the finance manager is more concerned about the cost than whether the organisation’s travellers are drinking Pol Roger or Moët. If your company has a culture which believes travel is a fixed cost, you will
be persistently asked to review spend. However, an alternative response might be to build a business case that demonstrates that investment in improving travel management will yield cost savings. Positioning travel as a positive investment is an increasingly attractive alternative. A travel strategy can underpin corporate strategy and contribute to growth of revenue rather than merely holding down costs to protect the bottom line. Whichever way to go, you will need to build a business case. Remember that some elements of travel management, such as appropriate service levels, traveller well-being and risk management, are more qualitative than quantitative and so cannot be measured in any traditional sense. And those that are quantitative, such as the size of the travel management company (TMC) fee, are far from the whole story.
THE CONSULTANT ANDREAS WELLAUER, chief executive, Galiant Consulting
THIS IS REMINISCENT OF THE OLD ‘COST CENTRE-VERSUS-PROFIT CENTRE’ DEBATE. Who asks HR if it has a measurable value for the company, or IT if upgrading to Windows 10 increases productivity? In travel, individual efficiency gains, productivity or security are very difficult to measure and the results are often meaningless. Productivity of business class travel-versus-economy cannot be measured, sales volume can hardly be equated to travel volume and staff security can only be measured if something happens. In short, a case based on monetary value is hard, if not impossible to make. The exception may be increased use of an OBT [online booking tool], which will lower the transaction costs. Even negotiating better fares/rates depends largely on your spend or how strategic a client you are for the supplier, rather than how good a negotiator you are. There are two distinct stakeholder-groups – management and users. Management is
in charge of any overall decision to proceed, but if users are not involved they may not support any investment/tool and risk any investment. All stakeholders must be part of the benefit analysis in order to have the broadest acceptance and highest benefit. Any business case should clearly state the benefits for the company and not just for travel. ‘Trip reason codes’ and ‘trip project code’ can demonstrate any effect on the bottom line.
The ‘reason’ code will clarify if a trip is for sales purposes, internal, for training, billable to client and so on. The project code will allow managers to better monitor the spend per project – that is, travel costs-versus-total project costs. While travel will have little to no influence on the actual spend, being able to deliver such granular reporting will. With cost-saving being very limited and/or hard to quantify, the main focus of travel
should shift from the classic ‘daily travel management’ and ‘procurement focus’ to overall data-management.
48 BBT November/December 2016 THE BUYERS
THOMAS LORENZ, group head of category management, multinational transportation firm
TRAVEL MANAGERS HAVE HAD TO ADDRESS THIS QUESTION ever since travel com- missions finished and corporate travel stopped being a source of revenue and became a cost. If your company doesn’t have a TMC,
it becomes more and more the responsi- bility of procurement to convince senior stakeholders of the business case – both the financials and the soft benefits – for appointing a TMC, an action that will cost money before it yields benefits. Some benefits, such as savings on sup-
plier rates and spend, can be quantified. Others, such as traveller well-being and duty-of-care, probably can’t be quanti- fied but, if anything goes wrong, they [the TMC] know who is where, and have a recovery plan to ensure they have access to the data to find the people in case of an emergency.
BUYINGBUSINESSTRAVEL.COM
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