Compliance Still Challenge for Travel Procurement

By John Hall

February 17, 2013 at 8:46 AM

Availability of and access to fare and accommodation information for business travelers have never been greater, as are security risks in many international locales. These translate to two big challenges for travel procurement: Compliance and safety. Both can impact travel budgets if buyers don’t monitor them closely. Consequently, corporate buyers are taking a long and hard look at existing travel policies, and how relevant they are given the rapid evolution of mobile technology and social networking.

joel_wartgow.tiff

“Someone making their own travel arrangements may feel they’re getting a better deal but that may not always be the case,” says Joel Wartgow, Senior Director, CWT Solutions Group, Americas Region (pictured left). “There are reasons why companies negotiate contracts with travel suppliers.” He suggests travel buyers focus on negotiating agreements that provide the most value for their company. 

Joseph Bates, Vice President of Research at the Global Business Travel Association (GBTA) says few things give buyers more heartburn than mobile technology in the hands of eager travelers. 

“Research we’ve conducted shows the number-one issue for travel buyers and managers today is compliance within the organization,” he says. “It’s become more challenging because of technology and mobile apps. Travelers can very easily find spot fairs that are cheaper than the negotiated rate. But what the travelers don’t understand is the company might save money on that one fare, but there’s all these other fares that will eventually suffer if a company doesn’t consolidate its spend with contracted suppliers.”

Then there’s the issue of security of information and traveler safety.

“Buyers must ensure suppliers can maintain the accuracy and security of the data being transferred through mobile channels, and that the data can be integrated across suppliers and platforms to ensure it is available to help track travelers in an emergency, for instance,” CWT notes in its most recent forecast.

With the world becoming a more dangerous place by the minute, buyers are challenged to ensure they provide the best, most reliable information to their employees before embarking. “Travel managers are becoming more cautious, ensuring travelers are aware of problems around the world and that emergency assistance and security is in place,” Bates says.

Yannis_Karmis.jpg

“Other than managing expense, which is a constant challenge, security and duty of care are key challenges facing companies this year,” says Yannis Karmis, President, Travelocity Business (pictured right), in an interview with My Purchasing Center. “This requires more attention as natural disasters like Hurricane Sandy shine light on the need for support from travel managers.” 

In addition, roughly half of all hotel bookings are made directly with hotel properties, which means a travel manager may not know where the traveler is staying, Karmis adds. “This can prove troubling should a traveler get sick, is involved in accident or traveling to a country experiencing political volatility. Knowing where your traveler is located while traveling and having policies in place to handle these situations is vastly important and can be aided by pushing travelers to book a hotel stay through their travel management company.”

It all comes down to education and information, CWT’s Wartgow adds. “If you’re unable to meet the intuitive needs of your traveler, you run the risk of them making their own decisions, which may take them outside of the preferred booking channel that allows you to track them and ensure their safety. Many companies have standards around hotels that will be included in their hotel program and those standards are vetted by the hotels. If someone doesn’t comply, they could be putting themselves in an unsafe situation. Safety and security are one of the primary reasons why we want to get travelers to follow their companies’ guidelines.”

Collaborate with Stakeholders

Corporate travel buyers don’t have to go far to find tips on strategies to cope with rising fares, compliance and security. CWT and Travelocity Business, for example, offer a wealth of ideas on their websites and through individual consultation.

In interviews My Purchasing Center conducted, one prevailing theme centers on the need to forge closer, more trusting relationships with travelers.

“It all has to do with educating the traveler,” Bates at GBTA says, “not creating a hostile relationship between the travel department and business traveler, but more of a cooperative, working relationship.”

CWT dubs it “traveler centricity.”

“Procurement should understand that travelers today have moved into a very strong position within the travel buying decision,” Wartgow tells My Purchasing Center. “They have access to more information than they’ve ever had before, and they can access it quickly. They have more knowledge than they’ve ever had before so they feel very confident in making their own decisions and those decisions may or may not be in synch with the company’s desires. 

‘That’s where it becomes really important to harness the energy of the entrepreneurial traveler who’s a little bit more willing to find a flight or hotel or rental car,” he says. Think about how can you influence that traveler and harness some of that energy to take advantage of what they’re willing to do to make travel arrangements.” One strategy CWT offers is implementing an “adaptive travel policy” in lieu of a very stringent ‘one size fits all’ approach. This allows buyers to manager traveler behavior, he added.

Another prevailing strategy is centered on not only staying abreast of emerging technology, but harnessing its power to drive compliance and stay informed. Travelocity Business, for example, offers tools such as its Hotel Rate Assure program, which was enhanced recently to ensure preferred properties at a company’s preferred rates are available during the booking process, Karmis says. CWT offers a host of tools, including a traveler scorecard, which tracks travel spend and policy compliance at the individual employee level, helping travelers better understand the overall cost impact of all the large and small decisions they make.



Tags: purchasing Social Networking Travel procurement sourcing
Category: News Article

John Hall

user_avatar

John Hall is a freelance writer who reports on commodities markets and procurement and supply management topics for My Purchasing Center. His website is jhallmedia.com


Please add a comment

You must be logged in to leave a reply. Login »


Related Content

Salary Data Yields Good News for Commercial Card and Payment Industry

Guest Editor

The NAPCP, a leading membership-based professional association committed to advancing Commercial Card and Payment professionals and industry practices worldwide, recently released results of a comprehensive industry salary survey. The results yield … Read More

Taking the Lead: The Evolving Role of Procurement in Risk Management

Guest Editor

Procurement professionals are increasingly at the forefront of managing risk, particularly considering the increased business reliance on outside suppliers and services. As these value chains continue to globalize and grow in complexity, the risks ar… Read More

Procurement Training Video Teaches Cost Modeling

Susan Avery

A new procurement training video, Achieve Competitive Prices Without Bidding, is now available for viewing at My Purchasing Center. The 60-minute training session is led by Rod Sherkin, President of ProPurchaser, a website that helps purchasers succe… Read More


Supplier Profiles

Staples

Staples Advantage is the one supplier that offers all the business solutions you need, all with the expertise of a specialty vendor. Read More

Digi-Key

It started in 1972 with an idea, a new concept in distribution. Today, Digi-Key Corporation is one of the fastest-growing electronic component distributors in the World. The stimulus for this growth is Digi-Key's customer-centered business philosophy… Read More

Lunney Advisory Group

Lunney Advisory Group was founded in 2007. Our firm is not your typical consulting company. Some members of our firm are highly qualified and experienced industry executives/practitioners while others are full time or adjunct university professors.… Read More

ISM Logistics Transportation

Our mission is to provide for ISM membership, networking opportunities, educational programs, and a forum for professional interaction in the fields of Logistics and Transportation for Acquisition, Contracting, Purchasing, Procurement and Supply Mana… Read More


Webcasts

What CEOs Expect Of Purchasing

Guest Contributor

Procurement and supply management leaders have a seat at the table, and management’s expectations are high. But what do CEOs really want, and is purchasing delivering on these expectations? This webcast looks at how procurement and supply management … Read More

Growing Purchasing Influence On Indirect Spending

Guest Contributor

At world-class companies, purchasing’s influence touches just about every area of spending. But, how exactly do procurement teams get to the point where other departments approach them for help with sourcing such indirect categories as human resource… Read More

Procurement-Finance Collaboration

Guest Contributor

Procurement & finance are two business functions which are often at loggerheads with each other. One reason for this is the lack of perception alignment on an important metric of procurement and finance performance - 'savings'. Read More