September is traditionally the beginning of RFP season for many travel managers putting together programs with negotiated rates. It’s the time of year where requests for proposals (RFP) are in abundance with negotiations often continuing well into the next year.
For longer than many of us care to remember, it’s a tiresome process with many still using the same old, tired playbook for what is essentially a bidding game. It’s a monumental undertaking that starts with collecting, reconciling and analysing data to identify what’s required and who to solicit proposals from.
Almost a third of the year can be spent on complex spend evaluations. And when you consider that travel expenses are one of the largest variable expenses in a business, with spend equating to around 10% of a company’s annual expenditure, travel and finance leaders need to balance costs whilst enabling people to perform their jobs effectively.
However, these same finance and travel managers are surprisingly underserved when it comes to having the right information they need, in real-time, to expedite the painful process. And why wait until September? If anything, the pandemic has shown that sticking to these rigid and legacy processes – whether to do with business travel or anything else – is detrimental to business survival and growth.
In a world where data is available on-demand in every aspect of our lives, analysis on travel spend should be conducted on a continual basis throughout the year. So here are four things travel managers should demand, as a minimum, to improve budgeting, as well as to improve business and people performance.
1. Access to sales and revenue insights
Organisations have travel and expense platforms, and customer relationship management (CRM) systems. What they don’t have is an integrated view of travel spend which includes revenue intelligence. Do you know the amount of spend required in order to win a deal? If your pipeline of potential sales deals totals £5 million, you should know exactly how much to spend on travel expenses. Especially in a post-pandemic working world where business travel will be less about cost and all about value, revenue data will be key in determining the tangible outcome of any given business trip. Is the trip required to close a sales deal? Or retain an existing customer? Or improve employee engagement?
2. Tech that provides a ‘single source of truth’
In today’s environment of actionable data insight, why is it that travel managers are still having to use multiple systems? It means travel spend data isn’t even available to them without a request made to a supplier. It makes evaluation extremely complex, inaccurate and ineffective. Ask yourself how many sources you are having to tap into when forecasting next year’s budget, and how long it is taking to analyse and report on it. The answer should be one source and minutes, not weeks.
Also, when it comes to RFP season, providing real-time data will enable your suppliers to create the most tailored proposal. The less data you provide, the more inaccurate the responses will be. How can they cut your costs or make efficiencies if you don’t know what you’re travelling employees are spending on, when and with what frequency? Without the full picture, suppliers are less likely to give their best price because they won’t know how profitable your account will be.
3. The ability to make budget decisions across the entire calendar
With real-time travel data, the issue of travel bans, which not only frustrate your commercial teams but also limit their ability to sell and manage customer success, should be a thing of the past. The only reason these still exist is down to a lack of integration of sales forecast and travel spend data. Integration of these two sets of data provides actionable insight into spend as it occurs, not once a month.
It will also allow you to make real-time travel decisions, meaning that your budget won’t run out or hamper business growth. Imagine a sales deal not closing because there was a travel ban due to lack of budget.
Essentially, do you know at what stage in the sales cycle you will maximise your travel ROI? Or at what stage in the account management process it would be valuable to visit your customers to develop business and reduce churn? These gems will unite your finance and sales teams and optimise business performance and profitability, thanks to the travel manager.
4. Data to budget per deal, not on past budget
As I’ve said, travel freezes partway through the year, even if the sales team has hit their sales projection, simply don’t make sense. However, if you can dynamically budget by the deal as opposed to a fixed budget based on the previous year’s numbers, they become a thing of the past. Why limit your ability to exceed targets, with an arbitrary number which might not have been set correctly in the first place? Access to actionable data here will enable travel and finance teams to be much more strategic about when and where to invest in travel – and in the meantime, reduce the burden on travel managers’ workloads which can double as a result of a ban.
Imagine how easy it would be to budget and forecast if you had the sales pipeline versus average expense ratio at your fingertips.
Savvy budgeting means satisfied staff
Company-wide policies, uninformed expense cuts and blanket bans will never have a great impact on the morale of your teams, sales or otherwise. Often, travel and expense management planning and processes just don’t make sense to the wider workforce. If everyone can see which types of business activities warrant business travel, it could completely change your workforce’s mindset. Not to mention getting the most both from a business and personal performance point of view. In the age of employee experiences, particularly when it comes to travel, high performing employees will follow where the best opportunities for success and work-life balance exist.
So, no matter the time of year you review travel budgets, if you have this information at your fingertips, it’ll create a world where budgeting is made easy, and the time taken is cut from months to days. Turn that boring budgeting process into a ‘science of spending’ exercise and you’ll contribute to the business’ bottom line as well as save yourself three months of the year.