The technology driving expense management today could redefine the way travel is managed tomorrow.
The never-ending puzzle of how to improve compliance and the effectiveness of a travel program, there is a growing feeling that the key to this conundrum may be found in the once humble (and humdrum) area of expense management.
While travel buyers have traditionally focused on the major areas of spending – air and hotel – expense systems have been seen largely as an accounting service and, in many cases, something that has been dealt with by finance or procurement departments rather than travel.
Almost every aspect of corporate travel management is being impacted by technology and data analytics, and they are also driving major changes in expense. Expense management tools are rapidly getting more sophisticated and becoming a more compelling proposition for chief financial officers when they are combined with online travel booking platforms, such as those offered by SAP Concur.
Consultant Chris Pouney, of Severnside Consulting, says: “Expense management is a tricky subject for many travel managers coming into a business, who typically start with what they know – air, hotel and TMC.
“They are traditionally not experts in expense. But I think payment and expense could be the silver bullet for managed travel. Expense offers such a rich source of data and can be very effective in controlling people’s behaviour because one of their constant drives is to get their money back.”
Most travel buyers seem reticent to talk about expense management as, in many cases, it’s not strictly under their umbrella. But expense is an area that can significantly affect the travel department’s options when it comes to working with other suppliers.
A major trend over the past few years has been the deployment of mobile expense apps, which travelers use to fill in their expense submissions “on the go”, instead of trawling through receipts when they get back to the office.
SAP Concur has been using these innovations to improve the expenses process. One of its latest products is Drive, which has been introduced within Concur’s expense app to track employee mileage through GPS technology.
Rachel van der Merwe, director, product marketing at SAP Concur, says: “We’re constantly innovating with all our products to offer greater value to the customer and anticipate their requirements. Drive is a great example of this – mileage is the largest unreceipted expense category.”
One of the biggest selling points of expense management systems is in their ability to reduce fraudulent claims.
The most common fraudulent claims involve “exaggerating” mileage, followed by putting through taxi receipts for personal travel or claiming for meals with friends and family.
Expense management systems are becoming better at flagging “out of the ordinary” transactions and spending patterns, as well as examining third-party vendors for types of expenses which are outside policy, such as bills from “gentleman’s clubs”.
Rachel van der Merwe, director, product marketing at SAP Concur, says: “The majority of fraud is unintentional with travelers not understanding the policies or where the lines are.
“The solution to fraud is data – capturing the right data creates the visibility to make sense of it. Then you can go about educating travelers and changing behavior.”
The development of more sophisticated tools should make life easier for both travelers and buyers with the ability to pick up data from bookings made outside the preferred booking platforms.
Consultant Raj Suchdave, managing partner of Black Box Partnerships, says, “The greater the data, the more collective view you can get of travel patterns and how that impacts the cost of travel,” he says. “You need to pull together all these data sources – travel, expense and profile data. It’s not just about looking at the cost of air tickets or train fares.
“You may have already squeezed out all the savings you can from a travel program, but using expense data can open up a number of new opportunities by looking at the total cost of a trip.”
Ali Hussain, ATPI Group’s chief innovation and technology officer, agrees.
“By analysing in one place under one trip, business owners, procurement and finance managers are able to get a full view,” he adds. “If a trip is attached to a sales conference they are then in a more qualified position to analyse the ROI of that conference based on the cost of travel.”
“Forward-thinking companies are more often looking at how they can make travel spend work harder to drive value,” he says.
“This allows travelers to allocate their spend to specific prospects or accounts, so sales and finance teams can then analyse them to determine which types of spend have the greatest impact on revenue generation.”
Get in the conversation
With expense becoming a more crucial part of the travel management equation, what should buyers do to make sure they are involved in the conversation within their organisation? Severnside Consulting’s Pouney says: “When buyers don’t engage with expense management, there’s a risk the CFO will make their own decision about the expense tool, and the supplier will offer them a booking tool as well.
“Taking a booking tool can potentially drive the choice of TMC, as some expense companies partner more strongly with certain TMCs than others. Travel people need to put themselves at the table for this decision, otherwise decisions will be made without them and they could become a lot more irrelevant.”
But Pouney also sees this as an “opportunity” for buyers to “upskill themselves” and use better understanding of expense management “to elevate their role” within their organisations.
“The travel manager is still a highly influential person in the process when you are looking at a T&E bid. But normally they are not going to make the final decision – that’s more likely to be made by procurement and the CFO.”
Allowing expense management to take a critical leading role in travel management may seem like a case of the tail wagging the dog. But there are signs this is the direction we’re heading in and getting on top of expenses may soon become a paramount issue for travel buyers.