Companies invest in business travel technology – AMEX
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23 March, 2010 - With the Global Financial Crisis having fundamentally altered the business travel landscape, new research from American Express Business Travel reveals that companies across the board are cracking down on corporate travel policies. The research titled, Managing Travel in the New Normal reveals that more than a third of companies won’t cover the cost if an employee doesn’t follow company protocol and regularly books travel outside of policy.
And on a traveller’s first compliance failure, 90 percent of travel management departments that report through to procurement or finance will provide a warning or notice of some kind.
“Companies are struggling to reorient themselves after arriving at the crossroads where aggressive cost cutting and long-term company performance intersect,” said Charles Petruccelli, President, American Express Global Travel Services.” “Although the economy is beginning to recover, the attitude of many businesses continues to be not to invest in travel spending. Companies are still refining what their approach to travel is. There is no doubt that we have entered into a new normal where there is increased focus on demonstrating the return on investment that travel delivers.”
To help organisations assess their level of preparedness to manage travel post-crisis, American Express Business Travel has launched a free online travel management scorecard. Available at www.americanexpress.com/newnormalquiz, the interactive scorecard measures the effectiveness of a company’s travel management program and illustrates how their program compares to those of other businesses.
“In creating the scorecard, we first felt it important to objectively survey executives and managed travel professionals to find out what measures they took to readjust travel spending behaviours during the economic downturn and if it would prepare them for the future,” said Justin Morgan, Vice President and General Manager, American Express Business Travel. “We then designed this interactive tool to help companies measure their own actions, benchmark their programs and appropriately address their business travel strategy with real-time advice from our experts.”
Managing Travel in the New Normal, produced by American Express Business Travel’s eXpert insights research team, is the first formal survey of its kind to examine how corporations have adapted their travel programs in response to the Global Financial Crisis and if their programs are optimised for when travel does pick-up. The survey analysis provides insight into a variety of areas, including the traveller-centric future of managed travel, a move toward mandating policy and supplier compliance, a willingness of companies to make technology investments to support both travel and alternatives to travel and taking actions to centralise meetings as the next area for procurement-led savings.
Key Findings of Survey
Most respondents to the Managing Travel in the New Normal survey indicated they believe travel demand will come back in 2010, albeit not to pre-recession levels any time soon.
Traveller Centricity Means Mobile
Survey respondents anecdotally reported that their travellers increasingly desire to leave their laptops behind and these companies have also seen demand for mobile services increase. Respondents also suggested personal mobile services are seen as a potential threat to a traditional managed travel environment.
When respondents were asked specifically about which tools and services their companies make available to their travellers, 37 percent said they leverage technology and mobile services to make life on the road easier, more than 17 percent are researching such tools, while 26 percent said it is not a priority for their organisation.
“When a company takes no action in relation to providing mobile services to travellers, they need to consider impacts of employees striking out on their own to access what they need on the road,” continued Morgan. “This has the potential of threatening compliance to policies and suppliers, similar to when travellers went on any website to book travel before managed programs offered corporate booking tools that help ensure company policies, procedures and preferred suppliers are used by employees.”
Technology Investments Drive Efficiency
Travel Alternatives Make a Connection
Survey results showed that more than 40 percent of C-level executives are willing to spend on new virtual meetings technologies. This finding indicates that top decision-makers likely view the concept of virtual travel as a beneficial investment and it supports the idea that companies are transitioning from targeting cost reductions to a strategy built around more thoughtful spending to connect employees.
74 percent said their companies use or plan to use audio-conferencing as an alternative to travel.
15 percent of respondents are currently researching broadband collaboration options.
10 percent have no alternative technology strategy to replace in-person meetings.
Automating Processes is Key to Achieving ROI Goals
Companies increasingly are looking to make the switch from manual expense processes to online expense automation tools. Especially, now that travel managers are increasingly being asked to track every dollar of each trip taken and to justify the return on investment in trips.
64 percent of respondents with $1 million to $3 million in annual air spend and 70 percent of respondents from large companies with an annual air spend of $50 million plus have invested in an expense management solution.
More than 86 percent of all respondents whose companies invested in an automated expense reporting solution link it to a corporate card data feed. These linkages help to avoid human error or fraud, increase efficiency and drive policy compliance.
Morgan added, “A key finding the survey is that even with travel expense under the microscope, travel managers expressed a willingness to spend on technology. Responses highlighted how critical technology is to help companies strike a balance in an effective spend management approach that appropriately supports, rather than hinders, sales and growth.”
Meetings Management a Must
Less than 30 percent of respondents said their companies currently have a formalised and enforced meetings policy. An additional 11 percent have a meetings policy but do not enforce it, and more than one-quarter of responding companies had no meetings policy implemented. The largest percentage of survey respondents (36%) indicated that meeting planning processes were subject to the corporate travel policy, rather than a specific meetings policy.
The study also showed that a major factor in the maturity of meetings management practices within an organisation was the sheer size of the travel management program. Corporate travel programs with an air volume of $10 million to $50 million ranked highest among survey respondents (41%) for managing meetings through a centralised department.
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