In a recent article, we defined Intelligent Spend Management as a comprehensive way for organizations to obtain a unified view of employee-initiated spend. A key component of employee-initiated spend is travel. According to a 2018 GBTA study, 37% of hotel bookings and 15% of flight bookings are made outside of corporate channels, and their cost is “invisible” until reported in an expense report weeks later. These findings are not surprising: the same study found that 80% of travel managers don’t use technology to capture outside bookings. In the paragraphs below, we will examine the reasons why employees are booking outside of the corporate managed travel program, how that behavior affects other parts of the organization such as human resources, procurement, and treasury, and suggest ways in which technology can be used so that expenses booked outside of the corporate program can be managed and brought into view.
Why are traveling employees booking trips outside of the corporate managed program?
A 2019 survey conducted by Wakefield Research found that many business travelers book through external platforms in search of convenience and better prices. In a 2019 GBTA-Cvent survey, one-quarter of travel buyers said more than 40% of their traveler workforce are Millennials. Younger professionals prefer to book travel when and where it’s easiest for them, e.g. using mobile apps they are familiar with to book directly with the airlines and hotels. In a 2018 article published in Inc magazine, generations expert Ryan Jenkins postulates that “considering 75% of the 2025 global workplace will be Millennials and Generation Z, it's critical that organizations keep a pulse on employee engagement.”
In a 2016 blog, Rocketrip states that other reasons why employees are booking outside of the corporate travel program include brand loyalty to an out-of-policy airline, hotel, or rental car company, and being unaware of company policy on booking channels.
How are corporate departments affected by employees booking outside of corporate travel tools?
If you are the treasurer, procurement director, or travel manager in charge of the corporate travel budget, one of your goals is to maximize the savings you can obtain from booking with preferred vendors you have negotiated contract prices with. Your corporate travel booking tool and travel management company (TMC) can help in directing employees according to your travel policies. However, employee bookings outside of the managed-travel program reduce the opportunity to apply negotiated rates and keep track of the number of flights or nights booked. Booking outside the managed-travel program also foregoes application of your corporate policies. While you may be able to track bookings after the trip is completed and the expense report is submitted, additional work by your accounting team will be required to reconcile and aggregate the spend. Bottom line: you can exercise more control of spend when employees book everything through the corporate travel program.
If you are the head of human resources and have a goal to increase employee satisfaction and attract and retain top talent, you want to enable your employees to use tools they are familiar and comfortable with, demonstrating your organization’s commitment to keeping up with innovation. Supporting your employees with tools that enable them to stay within policy – even when booking outside of the managed travel program – while simultaneously informing your organization’s travel manager of booking details, could keep your travelers happy and provide the desired visibility and integration with your managed travel program.
Let’s be clear: your organization established corporate travel policies and invested in online booking tools and/or a managed travel program to make it easier for employees to book travel and facilitate compliance with corporate policies, all with the aim of managing and controlling employee-initiated spend. But with more than 50% of hotel and flight bookings taking place outside the corporate managed travel program, there is a significant amount of spend that if captured, could deliver a more complete view of spend – enabling better tracking of bookings and leveraging negotiations with vendors and suppliers.
Intelligent enterprises capture employee-initiated spend and apply policy as soon as spend occurs, providing a unified view of spend without burdening the employee with additional reporting requirements.
Capturing data from bookings outside of the corporate travel program can increase visibility and control of spend. How do we capture that data while enabling travelers to book the way they prefer?
Enhancing the employee experience
Suppliers in the travel ecosystem are looking for ways to make a traveler’s life easier. Mobile apps enable air, train, hotel, and rental car vendors to book reservations and keep track of bookings from a smartphone. Data from the traveler’s record and booking history are tracked through the frequent flyer or loyalty traveler number. The traveler’s itinerary and receipts can be emailed to the traveler, eliminating the need for the traveler to scan and attach paper documents when sharing their travel info with family and friends, or in the process of generating expense reports. Local transportation can be booked online through ride apps, and e-receipts automatically emailed to the traveler. Free travel apps, such as TripIt from Concur, enhance the employee experience by integrating data feeds from different vendors so that travelers can see a unified view of their trip and receive alerts when unexpected changes to their plans occur – all from their smartphone.
How does the organization benefit?
Sharing the above information with the traveler’s organization ensures stakeholders get visibility into the bookings and reservations that the employee makes outside the corporate managed travel program. Combined with travel booked using the corporate booking tools, these organizations gain a complete, unified view of employee-initiated travel spend.
Customers using Concur Travel and Expense can accomplish the above with Concur TripLink. Employees can book directly on the hotel and airline websites and have the corporate negotiated rates applied. All the booking details are automatically passed to the managed travel program provided by the SAP Concur platform, enabling the finance organization to have full visibility on travel plans and accrued payables. The human resources and corporate safety teams benefit by being able to more accurately locate and support employees that are traveling in the event of a natural disaster or regional disturbances. With tools such as Concur TripLink, organizations can bring invisible spend into view, improving their spend governance, enhancing the employee experience, and addressing their duty of care.
SAP Concur helps organizations attain desired business outcomes through Intelligent Spend Management, enabling control of every source and category of spend while delivering workforce experiences that increase engagement and productivity. The SAP Concur Customer Improvement team will help your organization realize more value from your investment in SAP Concur.
For more information on how SAP Concur can help, please contact your SAP Concur account representative, or contact a sales representative.