Travel management has many important reasons for being. It touches lots of different departments and leads to varied priorities among organizational leaders. Gabe Rizzi, Travel Leaders Group’s chief sales officer and Travel Leaders Corporate’s president, suggests travel management pros take stock of those priorities and determine how best to extend the discipline’s value.
Cost reduction and control are often the top priorities for corporate travel managers. No wonder. Businesses are expected to spend $1.7 trillion on travel by 2020. Because necessity is the mother of invention, travel managers do a wonderful job controlling runaway spending by implementing strong travel policies, scoring lucrative discounts via supplier negotiations and monitoring travelers’ out-of-pocket expenses.
But cost control may not be your senior executives’ biggest priority for travel management. Having worked in five different industries, I can say from firsthand experience that CEOs often have a different view. Many regard travel chiefly as a tool to improve the business, and so they look to measure how one dollar, euro or yen of spending contributes to new revenue. Other senior executives look for travel management to support strategic goals for functional responsibilities; for example, in human resources or technology.
In a 2017 study commissioned by Amadeus and conducted by the London School of Economics, 85 percent of CEOs surveyed said growth was their top strategic objective for T&E spend management. They valued T&E management’s role in delivering expedient sales service to customers.
Among CFOs and chief procurement officers, operational efficiency was the No. 1 strategic objective for T&E management. Cost minimization came next. About two-thirds of chief human resources officers were most interested in T&E management’s contributions to employee productivity, engagement and retention. Think employee value proposition. For CIOs, T&E management’s contribution to risk mitigation topped the list.
Connect To Your Senior Leadership
Do you know why executive leadership values travel management? If your answer is anything but “yes, absolutely,” get some time on your senior executives’ calendars to find out. Ensure your program is aligned with their objectives so you can expand the overall value of T&E management. Here are some suggested tactics:
- First, take an inventory of top executives’ individual objectives for overall profitability, sales strategy, HR goals, risk mitigation and efficiency.
- Explain your own goals and where you see T&E management’s greatest value. This may be a good time to educate senior executives about strategies they undervalue or don’t know about. Here, you can make a crucial link between knowing what and where the organization spends on T&E and how that data improves T&E strategic sourcing and buying and, ultimately, organizational profitability. You can also address disconnects. In the LSE survey, for example, no CHROs thought risk mitigation was a strategic objective for T&E management despite the growing importance of duty of care programs and technology for reducing business travel’s risks.
- Explore the impact your program has on your company’s success. Work with your counterparts in other departments to determine the percentage of revenue that comes from each dollar spent on business travel. Explore how spending on specific types of travel (e.g., internal meetings, customer visits, conferences and conventions, incentive and rewards trips) provides a return on investment by keeping customers, converting prospects, improving relationships and investing in people. When you’re done, provide your senior executives with that information. Ask your travel management company for help mining this data. Also talk to employees to understand whether they view business travel as a benefit or a necessary evil.
- Take what you’ve learned in your sit-downs with senior executives and fine-tune or create new strategies to support their objectives. For example, consider whether your T&E expense management system is robust enough to support your organization’s employee value proposition.
When you create T&E management strategies that support senior executives’ goals, you and your travel program become more integral to the company’s overall success. Consider, too, that senior executives have the influence and resources you need to support and enforce your efforts.
Taking inventory of your leadership’s objectives for T&E management also gives you a great opportunity to educate senior executives on the value you’re already bringing to the organization.
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• Vic Pynn On Three Questions Every Industry Leader Must Ask