Benchmarking Study Identifies Criteria For Success
Strategic planning, globalization and effective marketing are among 13
critical success factors for effective travel management identified in a
new benchmarking study by the American Productivity & Quality Center, a
Houston-based, non-profit business association.
The study will be available for purchase by members of APQC July 31 and
by non-members in late January. Business Travel News assisted APQC in
preparing survey tools and analyzing data.
The baseline study compared the travel practices of nine travel
departments. Five of the nine–Eastman Kodak, Intel, Pfizer, Texas
Instruments and Whirlpool–were companies deemed “best practice
partners.” The other four entities–Citibank, Shell International,
Warner-Lambert and the University of California–sponsored the study.
The study focused on techniques to manage the travel function, methods
to reduce travel expenditures, matching cost reduction methods to
corporate culture, methods and costs of administering travel, methods of
controlling consumption of travel and measuring return on investment of
a travel program.
In best practice organizations today, travel managers have devised
strategic plans that most often include global expansion of their
programs. Best practice organizations also develop specific goals to
reduce travel expenses, develop metrics to monitor the effectiveness of
their programs and use technology to automate the travel function as
much as possible.
The study found that these organizations use at least 10 key metrics,
topped by financial performance and customer service, to measure the
effectiveness of their programs. Beyond the typical cost per ticket,
monthly savings and monthly cost avoidance figures, buyers typically
know how much it costs to process an expense report and administer
travel, as well as how long it takes to plan, book and issue a ticket.
However, not even best practice organizations were measuring cost per
trip, cost per reason for trip or cost per city–all metrics that could
yield long-term benefits.
One of the critical success factors for travel managers, the study
concluded, is the ability to demonstrate a value proposition for their
department to senior management, business unit managers and travelers.
This is one of the reasons travel managers in best practice
organizations are developing travel Web sites on their corporate
intranets, loaded with travel policy, preferred vendors, travel tips and
other useful information.
In best practice organizations today, the travel department considers
itself a service provider, charged with securing the most cost
effective, efficient means of travel for its customers, the study
concluded. Most of the departments rely heavily on surveying travelers
to ensure the service levels provided by the agency, other suppliers and
their own staff are meeting traveler expectations. In best practice
organizations, the travel department educates travelers and business
unit managers of the importance of policy compliance to the
organization, but in most instances leaves policing to business unit
managers.
Instead, travel managers focus on negotiations and other ways to reduce
travel expenditures without sacrificing service quality. To compensate
for the loss of commissions, travel managers cited the increasing use of
net/net deals, automated booking systems and other efficiencies such as
not printing hotel directories.
Although travel departments consider themselves service providers, they
usually outsource the actual delivery of processes and services. Of the
best practice companies studied, all had outsourced travel bookings and
at least 80 percent had outsourced the issuing of visas, negotiating CRS
contracts and compiling management reports. Half the organizations
outsourced the generating of reports for business units.
Continuing to add value to their organizations, travel managers in the
next two years anticipate being able to lower costs by leveraging their
travel programs on a global basis, taking advantage of smart cards and
other new technologies, booking directly with preferred airlines and
continually looking for ways to remove wasted expenditures from the
travel process.
