Inside Supply Management Magazine
ISM T&E Conference Focuses on Complexities of Travel
"Travel is often undervalued and misunderstood in companies despite the significant impact on people and their productivity,” says Frederic Khalil, former chief procurement officer for Guardian Life, in his opening remarks Thursday at ISM’s inaugural T&E Conference in Miami. “However, the role of travel is becoming more important as we’re tasked with balancing people’s satisfaction and company costs.”
In the opening day’s sessions, the message was clear: Travel is not a category light on complexities. It is, in fact, very much reliant on cross-functional collaboration, supplier relationships and category management for travel operations to be successful and cost efficient.
During her time as CPO of MasterCard, Deborah K. Stanton remarked during a panel discussion with Khalil that the company integrated sourcing and travel operations to streamline travel processes and decision-making. “If procurement or supply management is not overseeing travel, it may be up to you to open the door for collaboration,” she says. “You can apply the same methodologies to travel as other categories — it requires examining the internal and external environment for proper context and strategic decision-making.”
Khalil agrees, and adds that strong relationships and the ability to fill the value chain using the right tools is imperative in the travel space. “Think outside the box to know how people travel and where they need to be,” he says. With the right tools and emphasis on supplier relationships, Khalil says, such things as travel compliance are easier to enforce. But companies must build flexibility into the process to enable appropriate decision-making for the business rather than holding it against a ridged or unrealistic travel policy.
And what about metrics? How can you measure the ROI of travel? Khalil says he’s less concerned with ROI than efficiencies of expense management. Containing travel expenses is imperative for driving efficiencies throughout your travel process.
On the other hand, Stanton says tracking travel spend for internal business, external seminars and conferences and customer travel can yield some surprising results. Consider a conference in Europe with 10 U.S.-based employees attending from a company. Is attendance by all 10 necessary, or could two employees suffice? In some cases, it’s a lack of transparency within the company of who is traveling where and for what purpose. “Data is so powerful. You always need to have the story and data helps to tell a compelling story. It’s data that can reveal an extra (US)$1 million spent on airfares due to noncompliance.”
The highlight of the day was the keynote from Peter Greenberg (pictured above), travel editor for CBS News. Known as “The Travel Detective,” Greenberg flew from Athens the night before to present at ISM T&E 2016, only to fly out that same day for his next assignment in Morocco.
With his extensive travels and unique experiences with diplomats and dignitaries, Greenberg knows a thing or two about efficiencies in travel. Here are some of his insights:
●The airline industry has narrowed from eight major carriers to just four. No longer do airlines need to compete for market share, only yield. The contraction in airlines makes it challenging to negotiate travel, especially as rates change frequently.
●Between 2000 and 2015, there were 200 million more fliers, while airlines reduced the number of available seats by more than 150 million.
●The longest flight in the world is 17 hours and 50 minutes, between Dubai and Auckland.
●Last year was the safest in commercial aviation history, with 34 million flights and 16 crashes.
●Online travel sites only post 60 percent of flights available. And online fares often fail to account for other costs such as amenities and resort fees.
●Are you a collector of frequent flyer miles? Do you redeem your miles? If not, you’re not alone. Last year, 23.5 trillion miles were unredeemed.
●Despite perceptions, the best time to travel is after a natural disaster or act of terrorism.
●Airlines made more revenue from operating their frequent flyer programs than selling airfares.
●Last year, more people lost their lives taking selfies than were lost in aviation crashes.
Greenberg’s keynote was captivating and a great kickoff to the conference.