Without an expenditure management facility in its arsenal a Travel Management Company (TMC) can only provide a client organisation with post-travel recommendations to improve its travel policy, rendering the ability to manage wasteful or excessive expenditure (read budget control) relatively ineffective, Tracey Shaw of Traveluxion tells SmartProcurement.
Clients expect a TMC to roll out cost savings initiatives, source the best deals and ensure policy compliance. To that end it must also promote more responsible ‘traveller behaviour’ in terms of costs, savings and policy compliance.
However, in the absence of a technology framework that supports better travel procurement, the relationship between client and TMC becomes extremely onerous on the TMC as it lacks the tools to affect cost savings, says Shaw.
One of the largest challenges of working in the TMC space is having access to an automated process that allows the TMC and the client to interact on a uniform platform that allows for the process of capturing the initial request to travel right through to closing-off the spend, before it is transferred into the underlying ERP system.
The majority of clients operate a manual, paper-based requisition process, inherently flawed, archaic and open to all forms of manipulation of the processes. Such a system is ineffective because the most effective tool (generally) was a Management Information Report (MIR) that would usually arrive one month after travel has occurred.
Historical data can certainly provide information regarding strategy for future policy developments, but this does not help the Travel Manager correct, manage and focus traveller behaviour on the here and now.
The MIR would also exclude any possible “unmanaged” spend or bookings made outside the TMC environment, such as Low Cost Carries or Bed & Breakfasts.
As such the best intentions of a TMC to render the best possible service were hindered by the lack of an electronic process.
Thankfully for both the corporations and TMC, there is new technology that combines the best of online booking tools and Spend Management into one powerful procurement application.
Such technology recognizes that travel falls outside the realm of traditional procurement due to the complexities involved and the varied pricing of the suppliers.
Companies want ownership of technology through licensing agreements, accountability, visibility of total costs, before, during and after travel.
More control means improved cost containment, and what corporation doesn’t desire cost savings, and what TMC would not want to assist their client achieve these cost savings?
Change of this nature can be intimidating and difficult within larger organizations, but wouldn’t you rather be the architect of positive change than cling onto the past and its flawed processes?
In the words of Steve Jobs, “Innovation distinguishes between a leader and a follower” so dare to be the innovator and the leader, not the follower.