Cost control and beyond: The CFO’s agenda for corporate travel Presentation to ITM and Amadeus, 23 October 2008 Jason Sumner, Research Editor, CFO Europe Research Services
Jan 20, 2016
Cost control and beyond:
The CFO’s agenda for corporate travel
Presentation to ITM and Amadeus, 23 October 2008
Jason Sumner, Research Editor, CFO Europe Research Services
Agenda
1. Key findings
2. Demographics
3. Cost versus quality
4. One view of travel across the business
5. How to impress the CFO
Key findings
2. CFOs say travel managers should prioritise employee productivity
1. Travel costs can be managed better
3. On the whole, CFOs aren’t yet convinced of the benefits of green travel
4. CFOs want to see travel IT linked with ERP, HR and expense management systems
5. Travel managers should focus on improving supplier relationships
Demographics
• 127 senior finance executives
• 50% Europe, 25% US and 25% Asia
• Most major industries represented
• Small to large companies
Cost control – room for improvement
• 80%80% want travel managers to focus their programmes on immediate cost savings in the next two years
• 62%62% want to see long-term savings
• There is a large discrepancy between the numbers managing travel costs very well and the numbers that deem this to be very important
0%
10%
20%
30%
40%
50%
60%
Very importa
nt
Very well
Managingtravelcosts
Which travel tools would help?
Almost two-thirdstwo-thirds rate online booking tools and automated expense reporting systems to have medium-high cost-saving
potential.
0% 10% 20% 30% 40% 50% 60%
In-house travel agency
Online corporate self-booking tool
Call centre – live travel agent
Internet travel agencies (consumer sites)
Airline/hotel websites
Corporate credit cards for travel
Automated travel expense reporting systems
High
Medium
Low
Don’t know
Cost-saving potential
The value add
“The services we would like to see performed by the travel agency have changed dramatically. We need more value-added services – knowing what vaccinations we should have, rather than just booking standard tickets, because we can do that ourselves.”
Looking beyond cost
When it comes to traveller care, mobile travel services and feedback tools, more CFOs see service quality and operational efficiency benefits than cost savings.
11%
20%
15%
8%
1%
2%
27%
42%
17%
49%
33%
41%
5%
4%
25%
0% 10% 20% 30% 40% 50% 60%
Traveller care(ie security
alerts,delay/incident
alerts)
Travel services viamobile devices
Feedback tools
Cost savingsService qualityOperational efficiencyRegulatory complianceDon't know
Two views of feedback tools
“I think a feedback tool would allow you to respond to things and fix them a little more proactively.”
“Feedback is informal. If somebody has a terrible experience, they’ll tell our travel bookers. … If somebody’s had a bad experience on a flight I’m not particularly interested.”
Is productivity a priority?
Almost two-thirdstwo-thirds of CFOs want their travel managers’ programmes to save employees time
For another two-thirdstwo-thirds, employee productivity should be a moderate or major goal when procuring travel
45%45% of CFOs want travel services to focus on employee productivity in booking travel
Filling time
“There is probably a little more tolerance towards downtime because the tools that are at your disposal allow you to still be productive.”
The green light – travel and the environment
• Over halfOver half of CFOs said they did not know what the benefits of environmentally friendly travel could be
• Only 19%Only 19% of CFOs said they wanted travel services to focus on driving more environmentally friendly policies in the next two years
• One quarterOne quarter of CFOs said environmentally friendly travel would benefit regulatory compliance
4%
14%
7%
24%
51%
Cost savings
Service quality
Operational efficiency
Regulatory compliance
Don't know
How might environmentally friendly travel benefit your company?
Green drivers
“More and more of our customers, who are partly in the public sector, will need to do business with environmentally friendly companies.”
One view of travel expenses
What are the three most important benefits of having one accurate view of travel across the whole business?
9%
9%
7%
12%
10%
32%
23%
12%
11%
15%
22%
13%
16%
30%
19%
25%
19%
19%
3
2
1
To create better budgets andforecasts
To track spending by project oremployee
To negotiate supplier discounts
To identify unauthorisedspending
As the basis for advisingbusinesses on improvingprofitability
To identify/select suppliers
Integration – importance versus performance
• Almost three-quartersthree-quarters of CFOs recognise that integrating travel management systems with the expense management system is very important, but only 18%18% say that this has been achieved at the highest level.
• Nearly halfNearly half (48%48%) of CFOs said they would like to see travel services improve the accuracy of travel data.
0%
10%
20%
30%
40%
50%
60%
70%
80%
Highly integrated
Very importa
nt
ERP
HR database
Expense managementsystem
The benefits of the single view
“[One view of travel] gives you the ability to drill down further and get a sense for where the spend is highest, and then utilise preferred vendors.”
The finance-travel services relationship
• There is a disparity between the importance and effectiveness of finance’s relationships with other departments
• HalfHalf of respondents think that finance’s relationship with travel services is very important, but only 27%27% deem it to be very effective
0% 10% 20% 30% 40% 50% 60%
IT
Procurement
Travel services
HR
Security
Very important
Very effective
What should the travel department focus on?
4%
54%
48%
45%
58%
43%
19%
24%
Other
Creating benchmarks for negotiating deals with suppliers
Better accuracy of travel data
Employee productivity in booking travel
Improving T&E expense reporting and reimbursement
Better forecasting of travel costs
Driving more environmentally friendly travel policies
Improving traveller security and safety
Increasing leverage with suppliers
• Nearly three in fourthree in four CFOs said that increasing leverage with travel suppliers was important or very important, but only 36% said that their companies were doing well or very well at this.
• Almost halfAlmost half of CFOs want to see travel managers show that their system/programmes will increase negotiating power with suppliers.
6%
36%
Very effective
Very important
Effectiveness v importance of increasingleverage with travel suppliers
Conclusion – speaking the language of finance
2. Emphasise integration when proposing new IT
1. Demonstrate immediate and long-term cost savings
3. A single set of travel data helps justify the expenditure
4. Frame quality proposals with customers in mind
Conclusion – speaking the language of finance
5. Focus on improving supplier relationships
6. Find a way to measure productivity
7. Choose carefully when making green arguments
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‘Cost control and beyond’The CFO’s Agenda for Corporate Travel:
Amadeus’ Perspectives
Jason LongHead of Global Partners
Multinational Customer GroupAmadeus, Madrid
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Highlights
Integration: SBTs and expense management The green issue & feedback Addressing productivity Data and usage Summary
On the bright side: The tools CFOs feel good about
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Integration: Increasingly demanded
How many of you have implemented SBTs and/orautomated expense management?
How can technology vendors help?
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Highlights
Integration: SBTs and expense management The green issue & feedback Addressing productivity Data and usage Summary
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CFOs ambivalent about green travel
Cost vs conscience:
When will the balance shift for CFOs?
Tax implications driven by regulation?
Who is your trusted emisions source?
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CFOs see cost-savings impact of social networking/feedback tools
Social Networking: a danger to programme compliance and control or an opportunity to drive cost savings?
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Highlights
Integration: SBTs and expense management The green issue & feedback Addressing productivity Data and usage Summary
Ongoing Focus of corporate tools
Are you focusing on this?
How are you measuring?
How could it be measured?
Traveller Productivity
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Traveller Productivity
Downtime is not black and white Blackberries, wifi etc are increasing productivity during the
trip
Mobile devices and mobility services are becoming more prevalent
Will corporates expect seats with power connectors, internet connectivity, GSM cells in flight? What does that mean at the booking stage?
A wider question is the debundling of services: one-way fares, meals, aisle seat, lounge access etc.
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When is it productive to travel?
How would you determine the ‘return on travel’?
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Highlights
Integration: SBTs and expense management The green issue & feedback Addressing productivity Data and usage Summary
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One accurate view of travel across the company
Improving profitability
Track employees/projects
Budgets/ forecasts
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So where does the data come from for the“one accurate view”
Providers
GDS
Inventory
Systems
TMCs Booking
Devices
Expense
Mgmt.
Systems
Visibility of the value chain: How can this benefit the traveller, TMC & the CFO?
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Highlights
Integration: SBTs and expense management The green issue & feedback Addressing productivity Data and usage Summary
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Relationship with Finance: how big is the gap?
And how can it be closed?
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Summary
We need to prove our worth. Take booking tools: Understood to be a cost cutter Maybe as upfront investment is not high it is not valued
by management Mandating usage is not defacto
Focus on reporting and data analysis
‘savings from travel had been a minimal contributor to cost
control programmes’
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