Keesup Choe: Measure ROI to create a travel programme strategy

22 October 2018
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Keesup ChoeCEOPredictX
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Turning travel from a cost to an asset means turning the programme around

Total trip cost, expense, credit card, compliance, risk, tax and cost savings. These are keywords commonly applied to managed travel. Growth, investment, opportunity and asset are words that are hardly spoken.

Travel is not only the most complicated procurement category, but is also a category commonly written off as an obligatory expense with very little thought as to what the company achieves from it.

Big data has given us the information and the power to see the “bigger picture.” Vast amounts of data coupled with machine learning models can provide never-before-known visibility into all the activity happening in companies with thousands of employees. If we have that visibility, why is the overall value of travel still just accepted and not strategically analysed? If we look at both the cost and the benefits of travel in business, we begin to see it not only as an expense that is written off but as an investment or an asset that we can hold on to.

Business trips do provide value. Can travel managers become strategic advisors - making sure the company measures and increases the ROI of this costly investment? Travel can produce new business and opportunities that may serve a company for much longer than it takes to pay off the trip. If that is so then why do many businesses view travel as a consumable item like paper which can only be used once and thrown away? Employees started travelling for business for a reason. We cannot assess the value of travel without examining why we travel in the first place.

The value of business travel

Globalisation has made business travel a necessity. Business, that otherwise would be conducted elsewhere is now conducted on their home turf. Businesses need to travel to:

  • Attend meetings
  • Close important business deals
  • Manage and gain control of other business branches to generate growth
  • Obtain global clients by attending meetings in person
  • Attend networking and marketing events to raise awareness

Business travel has the power to open up new opportunities for growth. Instead of analysing sales prospects, new hires and new resources for products by location - we analyse them by value. Location is no longer a limit and we are able to take the maximum advantage when achieving any business objective.

How do we measure our return?

When we do the books on office equipment, we do not just measure employee software and hardware as an expense, we measure it as value as well. If we can do the same for travel, maybe we can begin to “balance the books”.

Value from business travel can be measured as:

  • Sales results from meetings with prospects
  • Results from managing and optimising an overseas branch
  • Employee retention
  • Gaining talent from other countries
  • Making use of resources from other countries

Once we are looking at travel as no longer a “necessary expense” but as an investment where the pros and cons can be weighed, we can view it strategically and not just from a cost-based model.

Developing the strategy for effective business travel

How do we nurture/pay into this investment?

Every investment or asset has a cost upfront. How do we pay into the investment involved in managed travel? A key goal for investment is the effectiveness of the trip.

Traveller trips should be effective and achieve results. Deals should be made, work abroad should be productive and sales should be closed to completion. Companies are beginning to see that a sleep-deprived, stressed out and uncomfortable employee often does not achieve these results. Hence, the rise of the traveller-centric programme.

Traveller-centric programmes aim to support their traveller throughout their entire journey. The underlying belief is that, if they take more care of the traveller, the traveller, in turn, will take more care of the business.

They provide digital tools, like booking tools and easy-to-use expense tools which can assist the traveller from the start of the trip to the finish. They also allow the traveller to have more and better options when booking flights and accommodation. A traveller-centric programme will often, for example, allow the traveller to book travel most cost-centric travel programmes do not allow. For example, a traveller can book an Uber instead of using a preferred company black car service.

Travel programmes can be more traveller-centric by:

  • Allowing travellers to use more convenient digital tools within policy like advanced booking tools and trip assistant apps
  • Providing more and better carrier and hotel options so they can pick their preferences
  • Keeping ahead of risk and duty of care issues
  • Making expense reporting a lot easier.

Once these steps are taken we can begin to assess the outcomes and maybe the ROI involved.

How do we measure the ROI of a traveller-centric approach?

The 2017 Road Warrior Programme analysed the benefits of a traveller-centric programme amongst 757 business travellers who often travelled and are thereby classed as “road warriors.”

Survey results show that road warriors in a travel-centric programme have 22% more effective trips than their colleagues in cost-focused programmes.

  • 29% more travellers experienced improved sleep
  • 42% more travellers experienced less stress
  • 38% more travellers did not need to request time off due to sickness from being on the road.
  • 42% more travellers found it easier to keep up with their workload while travelling

Traveller-centricity can also have a major impact on another important business goal that many businesses forget about: employee retention. According to the Centre for American Progress report, replacing a highly paid employee requiring specialised training can cost up to 213% of the employee’s annual salary.

As skilled, long-standing employees have expertise, internal company and client relationships that take years to build, retaining them is a crucial investment. Surprisingly, managed travel plays a significant role in employee retention; 84% of business travellers surveyed by the Centre for American Progress said they would be interested in a job from a different firm that requires similar levels of travel if it offers a very attractive travel policy.

Broad-based surveys are only one example of how we can assess the outcomes of traveller care. Advances in technology plus a wider range of big data available has given us the power to start assessing and measuring travel programme ROI through the individual travel programmes themselves.

  • HR data can be used to assess the value a quality traveller experience has on employee retention
  • Accounting data and CRM data can be used to analyse the gains from new sales attributed to outcomes from business trips
  • Finance and accounting systems can analyse the success of new branches optimised by travel to the new premises

This torrent of new data can be streamed into a singular data lake along with the expenses involved. When we are balancing employee retention, new business and increased productivity against the card, TMC and expense data, the expenses start to appear less worrisome.

If we want to change an outcome, sometimes we need to change the fundamental way we approach the issue at hand. Travel needs to be redefined as an asset. This can generate new ways of optimising it and help to move travel as a core, strategic activity of the company rather than another expense category to reduce. When we change our mindset, management may start to discover that upgrading their employees to business class is worth it in the long run.


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