Managing every mile

Amadeus IT Group (2017) Managing every mile. . LSE Consulting, London, UK.

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Abstract

A comprehensive framework for managing T&E is central to maximising value. Travel and Expense (T&E) is a major line of expenditure for many companies. Despite this, best-practice processes are ofen overlooked or implemented poorly, leading to cost and productivity inefficiencies, limited strategic oversight of travel management and frustrated employees. In other areas of corporate expenditure this is not the case. This study provides research and insights as to how corporations can take a more strategic approach to T&E by putting in place a comprehensive IT-enabled framework so that benefits can be maximised, both for the corporation and the traveller. Following interviews with senior decision makers across large corporations, it is clear that a number of strategic priorities underpin T&E programmes, but only by implementing a more structured approach can these priorities be delivered upon, and the true value of travel to business performance be measured and improved. Proactive management through automation and IT drives significant benefits. The research finds that through proactive management of T&E, using best-practice processes and automated IT systems, dramatic impact can be achieved: the cost of processing a transaction can reduce by over half; over 10 percent savings can be made through the use of an online booking tool; employee satisfaction can improve; 20 percent higher fraud identification than paper-based expense reports can occur, among others. This research presents a framework for T&E spend management encompassing three stages: 1) Setting the T&E strategy 2) Optimising the T&E spend management processes 3) IT enablement of the T&E processes The T&E spend management processes encompass five activities, enabled by IT: T&E Strategic Sourcing, T&E Buying, Traveller Support and Duty of Care, Expense Management, and Analytics and Feedback. Utilising this structure, insights from interviews with 19 CxOs and 7 HR executives were gathered from corporates internationally to review current T&E spend management practices and identify Return-On-Investment (ROI) improvement opportunities. Six strategic priorities were identified from executive management interviews: growth for CEO; efficiency and cost for CFO/CPO; people for CHR; and risk management and cost for CIO. The strategic priorities inform the functional priorities for T&E. Employee value proposition was perceived to be an important component of organisational ‘well-being’ and employee development. Companies are skipping T&E best practices. The interviews overwhelmingly reveal a propensity to skip best practices in the T&E strategic sourcing and T&E buying steps. The best practices skipped include enforcing process compliance through a managed-buying channel; ensuring sufficient spend visibility to enable strategic sourcing; establishing demand management enabled by ‘smart approval’; and driving corporate card utilisation. Skipping these best practices results in missed savings opportunities in T&E and sub-optimal ROI. Companies should not use expenses as the way to manage corporate travel requirements. One of the most significant findings of the interviews was the over-reliance on the expense stage as a mode of managing T&E in the organisation. Despite significant investment by many interviewed CxOs in T&E solutions, Expense Management was viewed as a source of ‘user frustration’ and ‘clerical and managerial annoyance’. Enhancing ROI requires best practices implementation in the preceding stages to reduce complexity in Expense Management, and addressing missing functionality. Similarly, the analytics and feedback loop between the expenses step and T&E sourcing is less effective than it could be in the absence of stronger T&E sourcing and T&E buying practices. IT is seen as a key enabler to improved T&E programmes. The research identified IT as a key enabler of T&E functionality. Around 60 percent of executives were considering changes to their T&E systems in the next 1-3 years. They identified future-state IT-enabled functionality in booking, expenses, and analytics and reporting. The attainment of greater ROI from T&E requires best practices throughout the spend management process, with a particular emphasis on the initial stages. When T&E spend management adheres to best practices across the entire process, the benefits to the organisation and the employee can be significant.

Item Type:	Monograph (Report)
Official URL:	http://www.lse.ac.uk/business-and-consultancy/cons...
Additional Information:	© LSE Consulting
Divisions:	Media and Communications
Subjects:	H Social Sciences > HA Statistics H Social Sciences > HB Economic Theory
Date Deposited:	12 Apr 2018 09:14
Last Modified:	13 Sep 2024 20:48
URI:	http://eprints.lse.ac.uk/id/eprint/87441

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