Procurement teams, like all of us, often have their own objectives to balance alongside their travel programmes. In most cases, the two are well aligned but when they aren’t, it can it come at the expense of what’s truly best for their business travellers. However, rather than point fingers, let's start by understand the why, and explore how we approach this complex balance. After all, we're all in this together!
During the pandemic, in most business sectors corporate spending on travel dropped to virtually zero. Corporates also began to make a conscious effort to reduce CO2 emissions. Now, people need to travel again, so the challenge for procurement is how to control spend whilst meeting the needs of the business.
In practice, this means looking beyond just the numbers and considering what, where, and, most importantly, why the money is being spent. Procurement initially replaced discretionary spending with Teams and Zoom meetings, prompting business travellers to consider the environmental impact of their trips.
Employers now recognise the importance of empowering their travellers to build customer relationships, enhance personal development, and break free from the confines of the office. But this perspective needs to strike a balance between the new world and the old.
Redefining return on investment.
At Agiito, we work closely with our customers to help them measure their return on investment in a different light. Sure, the total cost of a trip may be £200, but measuring its true value can be challenging for procurement professionals.
The key lies in empowering the travellers themselves to validate the purpose of their journeys. Two crucial questions arise: Why is this trip valuable, and what risks does the business face if it's not taken? Unfortunately, the typical authorisation process fails to address these questions; instead, it focuses on whether the travel complies with policy.
Nowadays, organisations committed to Net Zero or carbon neutrality are educating their travellers on best practices and responsible choices. They're also revaluating their partnerships to ensure alignment with shared values. From energy-efficient hotels to airlines embracing Sustainable Aviation Fuel (SAF) and car rental providers with green fleets, there’s a lot that that corporates can do. Our approach is to start by engage with our customers to encourage them to ask the right questions and pave the way for positive change, while making less specific recommendations based on the common trends and requests we hear from our broader customer base.
The true value of travel beyond cost and spend.
Measuring ROI can be quite subjective, considering the multitude of variables involved. From job roles to traveller profiles, volumes of company travel, customer importance, and whether it’s a new customer or prospect. While buyers have historically focus on savings and spend, we're asking them to look beyond the surface and ask the right questions.
This is where data a crucial role. As a TMC, we have insights into how much a customer spends and where but understanding how and why requires a deeper dive. We urge our procurement customers to assess each cost centre as a potential profit centre, instead of simply a cost to their business.
For instance, if the travellers are graduate intakes, they could be considered the future generation of senior professionals, and the spend is therefore an investment in those people. As such, the ROI comes not from the specific trip, but from their careers with the organisation. It's about shifting perspectives and measuring ROI in a different light.
Empowering procurement to ask the right questions.
How are procurement teams reacting to this messaging? It's piquing their curiosity. Often, they don't have all the answers to the questions we pose because procurement primarily focuses on curating travel contracts and managing TMCs, SLAs, and KPIs.
With a travel manager, it's slightly different because they get under the skin of the traveller and know what drives business travel in their organisations. Procurement's reception to this message depends on their maturity and seniority, but we challenge them with valuable insights and thought-provoking questions. Like, “did you realise that cost centre is spending two-thirds of your business to New York?”
If they don't already know, but then discover a massive project in the pipeline that will span two years, the business case for the spend is easily justified.
Striking the balance between technology and human expertise.
Effective travel management combines technology and people. Technology acts as an enabler that can be adjusted according to the challenges at hand, like meeting sustainability objectives. But it's not all about tech. Flexibility and adaptability are crucial when circumstances change unexpectedly.
Like the customer who planned to relaunch their graduate trainee programme and instead of taking on 300 graduates in one month were recruiting 3000. We had to dial up the number of rooms needed and provided support throughout.
Our technology played a crucial role in facilitating bookings, while our people approached the situation with a fresh perspective to find the best solution, advising the customer to stagger the arrival dates across days when the hotel had more occupancy and were likely to get a good rate. The perfect blend of innovation and human touch.
A progressive mindset.
As always, we can provide valuable insights and recommendations, but it ultimately depends on procurement's willingness to embrace change. While they are often open to listening to consultants, acting based on that knowledge isn't always easy. They have their own balance of objectives.
We’re not just the yes men and women of business travel, our job is to provide the insight, convincing arguments, and challenging questions to make positive changes to a company’s travel programme.
By pushing organisations out of their comfort zones, challenging perceived wisdom, and embracing new perspectives, we can truly inform, and sometime even transform the procurement mindset for a more seamless, sustainable and rewarding business travel experience.