By Kevin Permenter, Senior Research Analyst, Enterprise Applications, IDC
Burdened with tightening margins and increasing competition, financial services firms must pay close attention to business travel. In the past, these firms have focused their attention on controlling costs and maintaining compliance. These remain important aspects for travel departments in financial services firms. However, a growing area of focus in recent years has been optimizing travel spend. Not simply monitoring the costs and reconciling expenses from business travel, financial services firms are now looking to better understand the benefits and resulting outcomes from business travel. Was the West Coast trip for our sales team worth it? Did we send the right team? How did the trip impact sales/bookings? These questions while straight forward require a new level of capabilities from travel software applications, including:
- Advanced analytics: Analytics can play an important role in travel and expense applications by turning expense report data into actionable information. With advanced analytics, businesses can identify spending patterns and adjust T&E policies accordingly. Pairing data from other departments can unlock even more valuable from analytics. For example, running a cross-section analysis on T&E costs against prospect scores in the CRM system can predict the most valuable travel locations for a member of the sales team.
- Better reporting: Many end users still struggle with reporting. Timely reporting and accurate analysis are essential to maintain business visibility and an agile business. However, too many organizations are stuck with limited functionality and little flexibility related to reporting and analysis. Bringing in more business and artificial intelligence capabilities allows financial professionals to save valuable time and to dive deeper into the data to reveal value-added insights.
- Application program interfaces (APIs): T&E applications must interact with many different external applications such as CRM, ERP, HCM, external booking tools, credit cards, and travel-specific apps to manage company expenses. APIs allow T&E applications to connect directly with those systems, so information and expenses flow seamlessly between end users and external services. The real impact here is that travel information can now be more easily paired with financial data, sales data, and HCM data to drive higher-level insights.
- Better data visualization: Travel managers often must sift through a tremendous amount of data to find key insights. Visualization tools help financial managers analyze data more efficiently. They are an essential tool for travel managers to quickly see the "story" behind the data. Unfortunately, the volume and the number of sources of relevant business data continue to grow so does the demand from financial software end users for better data visualization tools.
Going forward, financial services firms will need to have tools to understand the outcome of business travel to optimize future business travel. In short, a focus on insights will allow these firms to make smarter decisions on budgeting and business travel planning. The potential here is not simply to reduce cost and maintain compliance but to drive additional bookings revenue by making sure the right people are going to the right places at the right time. As insights become more essential to the travel management, we expect the role and required skill set to continue to evolve from more than a "bean counter," to an analyst/advisor. The travel managers will be asked to find trends and insights that will impact key performance indicators for the entire business.
For more on the evolution of the travel and expense market within financial services, please see this Q&A.