Due to the Coronavirus disease (COVID-19) pandemic, the need for companies to reign in spend and place tight controls on business expenses is more important than ever. As a result, companies need a unified view of business spend for sourcing and procurement management to support the financial health of their organization.
Travel and expenses (T&E) is a logical place to start, as it’s the second most controllable expense for companies, behind payroll. However, corporate travel has historically been sourced and procured very differently compared to other business goods and services, such as software subscriptions or internet service. It’s an outlier, with a supply chain and unique ecosystem that requires most companies having a travel manager to oversee it all.
But, is this business silo so sophisticated and remote that it cannot be aligned with other business segments for company-wide visibility? No. To effectively control overall corporate spend and achieve tighter control over the supply chain, travel procurement needs to be unified with a company’s overall business spend.
When taking a closer look, it’s clear that the process of sourcing and procuring corporate travel is really no different from the workstreams that a procurement manager would go through for securing, let’s say, office supplies.
Similar to a procurement manager, the corporate travel manager is responsible for working the RFP process and negotiating rates with air and hotel suppliers and other vendors that support business travel. They must manage a slew of contracts, ensure the right inventory is available to travelers and keep employees within policy when booking travel.
Today, these processes are taking place across multiple systems and even across manual spreadsheets. By taking travel out of its current silo and unifying it with the rest of a company’s business spend management (BSM) processes, both travel managers and the organization as a whole stand to benefit greatly.
For travel managers, bringing travel sourcing and procurement under the same roof as their company’s general processes allows for unparalleled visibility. Many standard procurement workstreams can easily be adapted for corporate travel, providing travel managers with a single source of truth for negotiated rates and booking data.
Having access to very specific, market-level data and analytics allows corporate travel managers to not only have deeper negotiation discussions with suppliers, but also to monitor and measure the performance of those negotiations. It’s this type of visibility that travel managers need to establish important benchmarks and ensure they’re getting the most value from their supplier partners.
For businesses, bringing corporate travel into the fold allows organizations to get a holistic look at where their money is being spent. Gaining full end-to-end visibility into business spend allows companies to make more meaningful decisions around budgeting and cost cutting. Armed with this knowledge, organizations will be better equipped to stay agile and react to changing market conditions.
To successfully unify T&E with the rest of their business spend categories, companies will need to rely on their BSM solution to bridge the siloes. This means each step of the travel procurement process – from sourcing to negotiation to rate management and beyond – should be managed and tracked within a single platform. It’s only then that a company is able to gain the control needed to contain costs and mitigate risks.
Looking ahead to the future of business travel, where trips are perhaps less frequent, yet spend is more concentrated on specific markets, negotiations will become even more important and require more meaningful data in order to negotiate from a position of strength. Taking a unified approach to T&E management and BSM as a whole will be key for organizations looking to get the most value out of every dollar spent.
Although COVID-19 has individuals siloed up to stay healthy, it has been forcing businesses to think about the financial benefits of breaking down their internal siloes. As companies continue to adapt and learn to become more cost-efficient and effective, they will find that when the pandemic finally passes, there is a silver lining to all of this.