And in these tough economic times, you want to make sure every penny is spent wisely. By using such tools as global consolidation of data and actionable reporting, you can manage your business more wisely, control expenses and even make some budget cuts to help your bottom line.
“Travel is usually your second- to third-largest expense in business,” says Todd Stoneman, vice president of information technology at Professional Travel Inc. “In these economic times, companies want to be able to move and change their business. Trimming budgets and growing smartly can help you control and change that.”
Smart Business spoke with Stoneman about how to effectively use global consolidation of data, how to create actionable reporting in a real-time environment, and how these tools can help you cut your travel budget and save money.
What is global consolidation of data?
It’s a collection of data from all parts of the world. Companies look at their overall spend and business model for the world, put it all together, and then create reports based on this accumulation.
You look at the vendors you’re using, such as hotel, air or car. You also look at how much money you’re spending and where you’re flying to. You can also look at your different departments and get an idea of where they’re traveling to, what the money is being spent on and if it’s on budget. It’s just an easier way of controlling money and employees.
Are more companies doing this now that global business is becoming more common?
It’s coming more into its own now. It’s something a lot of companies looked at a number of years back, but there were so many obstacles and pitfalls in it, such as culture and regional differences. It still has its quirks, but now travel management companies are able to work across the globe pretty well and get the necessary data to give companies some meaningful picture of their business.
Why is it useful to use a travel management company for this process instead of doing it on your own?
Your turn around time will be shorter. Travel management companies can report weekly, actually even daily, on this information. If you do it internally, a lot of times the data isn’t collected until long after the money is spent, so you don’t have an opportunity to change habits until after the fact. Companies also don’t have the resources and relationships to collect this data like travel management companies do. It can also be expensive to do it yourself.
How do you create actionable reporting?
Actionable reporting is being able to react to situations or spending patterns before the money is actually spent and then change habits before it continues. With actionable reporting, you can tell the employee why it’s important to change and what he or she needs to do to avoid that. It’s empowering you to change your business.
More importantly, companies can look at trimming money out of their travel budgets. You can look at things such as changing your business class booking from a 10-hour window to a 12-hour window to save money. You can also look at moving travelers from hotels such as the Marriotts, Sheratons and Hyatts to the Hamptons and Courtyards.
If a traveler finishes early, he or she could change his or her flight and head home sooner. The traveler may see it and say, ‘It’s only $200,’ but the company might say, ‘That’s $1 million a year; we need to change this behavior.’
You can drill down to the point where you know exactly who’s doing this and who to go to make these changes happen, and that’s where it becomes an actionable item. You can either have the department head handle it or target the offenders directly. Travel management companies can also send e-mails directly to travelers notifying them of the change. It’s more effective than if companies send out a blanket statement themselves that says: ‘Please do this.’
What steps could a business take to begin using these tools?
First, you’ve got to look at your footprint globally and your different locations. The travel management company then finds partners in those markets to complete contracts with. Management companies also work with your accounting department or chief financial officer to understand how they want it structured when the data comes back, because things can change between here and North America.
Todd Stoneman is vice president of information technology at Professional Travel Inc. Reach him at firstname.lastname@example.org or (440) 734-8800 x4050.