Spend Under Management in Business Travel

“The whole is more than the sum of its parts.” – Aristotle

We believe we have good data… but is it complete?

I’ve had many conversations with Travel and Procurement managers about how much addressable travel spend the company has. This is a critical number as it validates a company’s volume, and dictates the sourcing strategy and execution. In most cases, I’m immediately presented with the Travel Management Company’s report of phone and online bookings. While this data is helpful and telling, there is an average of another 55% of travel spend that is not being accounted for in those data sources*.

The search for answers.

The more you understand about how your travelers think and make decisions, the better you can guide those decisions in support of company goals. This requires acceptance that not all travel category spend is going through approved channels. The opportunity to get access to more information and compile a solid data set is helpful to all industry participants. If we’re looking at 45% of spend, the strategy may be different than if we are looking at the entire category. Either way, the same questions linger: is it worth it to the organization and its suppliers to identify where that large chunk of spend is going? Is it going to preferred suppliers but not counted towards volume commitments? Is there an opportunity to expand our managed programs to more travelers than we realize? The difference will be the answers and resulting recommendations that procurement comes up with.

Spend Under Management.

Leading organizations are investing in new tools and tactics to leverage more of their spend. From gamification to managing open booking: there are more choices than ever to augment current visibility and strategy development. My personal take is that we’re doing a good job with a good portion of our spend – but we really need to do a great job with a greater portion of our spend. We should absolutely continue implementing time tested strategies in the travel category. However, let’s also take a broader view of our TOTAL program and understand where and how all company funds are being spent. You may just identify new supplier opportunities and a chance to serve more travelers than you think.

Many companies are looking to achieve their performance goals and manage budgets by harnessing new technologies. They understand the importance of getting full visibility into their data. Beyond contributing towards procurement’s existing performance metrics of savings and spend under management, the additional reward is a travel program that can interact more effectively with travelers, achieve higher traveler satisfaction levels, and even increase leverage with suppliers.

* PHOCUSWRIGHT: U.S. Business Traveler: Managed, Unmanaged and Rogue