Cost control and beyond: The CFO’s agenda for corporate travel

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


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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?

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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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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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’

Cost control and beyond: The CFO’s agenda for corporate travel

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Transcript of Cost control and beyond: The CFO’s agenda for corporate travel