Transcript Cost, quality and corporate travel: can CFOs go in two

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
1. Travel costs can be managed better
2. CFOs say travel managers should prioritise
employee productivity
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% want travel managers to focus
their programmes on immediate cost
savings in the next two years
60%
50%
40%
30%
20%
Managing
travel
costs
• 62% want to see long-term savings
10%
0%
• There is a large discrepancy between
the numbers managing travel costs
very well and the numbers that deem
this to be very important
Which travel tools would help?
Almost two-thirds rate online booking tools and automated expense
reporting systems to have medium-high cost-saving potential.
Automated travel expense reporting systems
Corporate credit cards for travel
Cost-saving potential
Airline/hotel websites
High
Internet travel agencies (consumer sites)
Medium
Low
Call centre – live travel agent
Don’t know
Online corporate self-booking tool
In-house travel agency
0%
10%
20%
30%
40%
50%
60%
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.
25%
Feedback tools
2%
Travel services via
mobile devices
41%
17%
15%
4%
33%
1%
Cost savings
Service quality
Operational efficiency
Regulatory compliance
Don't know
42%
20%
5%
Traveller care
(ie security
alerts,
delay/incident
alerts)
8%
11%
0%
10%
49%
27%
20%
30%
40%
50%
60%
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-thirds of CFOs want their travel managers’
programmes to save employees time
 For another two-thirds, employee productivity should
be a moderate or major goal when procuring travel
 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
How might environmentally friendly travel
benefit your company?
Cost savings
4%
Service quality
14%
Operational efficiency
Don't know
7%
51%
Regulatory compliance
24%
• Over half of CFOs said they
did not know what the benefits of
environmentally friendly travel
could be
• Only 19% of CFOs said they
wanted travel services to focus
on driving more environmentally
friendly policies in the next two
years
• One quarter of CFOs said
environmentally friendly travel
would benefit regulatory
compliance
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?
1
11%
13%
To create better budgets and
forecasts
19%
19%
32%
7%
19%
2
12%
10%
9%
16%
15%
3
9%
12%
30%
22%
To track spending by project or
employee
To negotiate supplier discounts
To identify unauthorised
spending
25%
23%
As the basis for advising
businesses on improving
profitability
To identify/select suppliers
Integration – importance versus performance
80%
70%
60%
50%
ERP
40%
30%
20%
10%
0%
• Almost three-quarters of CFOs
recognise that integrating travel
management systems with the expense
management system is very important,
but only 18% say that this has been
achieved at the highest level.
HR database
Expense management
system
• Nearly half (48%) of CFOs said they
would like to see travel services improve
the accuracy of travel data.
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
Security
HR
Very important
Travel services
Very effective
Procurement
IT
0%
10%
20%
30%
40%
50%
60%
• There is a disparity between the importance and effectiveness of finance’s relationships
with other departments
• Half of respondents think that finance’s relationship with travel services is very
important, but only 27% deem it to be very effective
What should the travel department focus on?
24%
Improving traveller security and safety
19%
Driving more environmentally friendly travel policies
43%
Better forecasting of travel costs
Improving T&E expense reporting and reimbursement
58%
Employee productivity in booking travel
45%
48%
Better accuracy of travel data
54%
Creating benchmarks for negotiating deals with suppliers
Other
4%
Increasing leverage with suppliers
Effectiveness v importance of increasing
leverage with travel suppliers
36%
Very important
Very effective
6%
• Nearly three 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 half of CFOs want to see
travel managers show that their
system/programmes will increase
negotiating power with suppliers.
Conclusion – speaking the language of finance
1. Demonstrate immediate and long-term cost savings
2. Emphasise integration when proposing new IT
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
Amadeus’ Perspectives
Jason Long
Head of Global Partners
Multinational Customer Group
Amadeus, Madrid
© 2007 Amadeus IT Group SA
Corporate & Distribution Channels
‘Cost control and beyond’
The CFO’s Agenda for Corporate Travel:

Integration: SBTs and expense management

The green issue & feedback

Addressing productivity

Data and usage

Summary
© 2007 Amadeus IT Group SA
Highlights
On the bright side: The tools CFOs feel
good about
How many of you have implemented SBTs and/or
automated expense management?
How can technology vendors help?
© 2007 Amadeus IT Group SA
Integration: Increasingly demanded

Integration: SBTs and expense management

The green issue & feedback

Addressing productivity

Data and usage

Summary
© 2007 Amadeus IT Group SA
Highlights
CFOs ambivalent about green travel
Cost vs conscience:
Tax implications driven by regulation?
Who is your trusted emisions source?
© 2007 Amadeus IT Group SA
When will the balance shift for CFOs?
Social Networking: a danger to programme
compliance and control or an opportunity
to drive cost savings?
© 2007 Amadeus IT Group SA
CFOs see cost-savings impact of
social networking/feedback tools

Integration: SBTs and expense management

The green issue & feedback

Addressing productivity

Data and usage

Summary
© 2007 Amadeus IT Group SA
Highlights
Traveller Productivity
Ongoing Focus of corporate
tools
Are you focusing on this?
How are you measuring?
How could it be measured?

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.
© 2007 Amadeus IT Group SA
Traveller Productivity
How would you determine the
‘return on travel’?
© 2007 Amadeus IT Group SA
When is it productive to travel?

Integration: SBTs and expense management

The green issue & feedback

Addressing productivity

Data and usage

Summary
© 2007 Amadeus IT Group SA
Highlights

Improving
profitability

Track
employees/
projects

Budgets
/ forecasts
© 2007 Amadeus IT Group SA
One accurate view of travel across the
company
So where does the data come from for the
“one accurate view”
Providers
Inventory
Systems
Expense
TMCs
Booking
Mgmt.
Devices
Systems
Visibility of the value chain: How can this
benefit the traveller, TMC & the CFO?
© 2007 Amadeus IT Group SA
GDS

Integration: SBTs and expense management

The green issue & feedback

Addressing productivity

Data and usage

Summary
© 2007 Amadeus IT Group SA
Highlights
And how can it be closed?
© 2007 Amadeus IT Group SA
Relationship with Finance: how big is
the gap?
Summary
‘savings from travel had been a
minimal contributor to cost
control programmes’
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
© 2007 Amadeus IT Group SA

© 2007 Amadeus IT Group SA