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24 Nov 2014

Managed Travel 3.0 - making business travel personal

Making business travel personal

Like precocious teens, organisations have been flirting with the idea of Open Booking for the last couple of years. Despite the fact that there’s nothing fundamentally new about the concept, it took Concur to give it a badge and a marketing budget to make it visible. Truth be told, it was a worthwhile experiment, but with Concur now in the hands of SAP, the experiment is over and we can all get back to behaving rationally.

The basic premise of Open Booking is that employees are maverick and should be able to book whatever they like, because they’re going to do that anyway. And indeed there is probably a grain of truth in this, particularly amongst millenials, but it’s not black and white and misses a number of really important points.

Organisations that have bought into the Open Booking philosophy argue that trust is the key to effective cost control, and by giving employees the right information, they can make good buying decisions. And – not unsurprisingly - there’s plenty of not wholly independent studies to show that this may be true in certain situations, but it’s certainly not true in every situation.

As every travel manager knows only too well, driving down the cost of corporate travel relies on organisations leveraging the power of volume purchase commitments which, unless enforced pre-purchase, unravel very quickly when employees are allowed to book whatever they like, however they like. Historically, the only way for travel managers to drive real savings through a corporate travel program was to buy in volume and force employees to buy through a very narrow set of channels. This was Managed Travel (2.0) and resulted in some cost savings, but also high levels of leakage and low levels of staff engagement.

So, from a purely financial perspective, Managed Travel 2.0 and Open Booking are both flawed for slightly different reasons. However, it’s not all about the money, there are a number of other factors at play that influence how employees behave.

Although Open Booking provides choice and flexibility, it also comes with an administrative overhead that can be crippling. The average business trip involves some flights and a hotel, which sounds pretty straightforward, but quickly becomes an administrative nightmare when things start changing. Our data shows that somewhere between 25% and 40% of business trips change in some way before departure and in-trip, which leads to hours of laborious admin for someone. Any savings that may be generated by buying direct are invariably offset by lost hours managing the details, which soon gets under the skin of employees.

The other fundamental flaw in Open Booking is that employers simply don’t know where employees are at any given point in time. Recent changes in legislation put the burden of care firmly on the heads of company officers that have a legal responsibility to know where employees are and to keep them safe. If employees are merrily booking their own trips direct with suppliers there’s no way employers can possibly meet their obligations. The reality is that Duty of Care compliance is a problem that’s only ever going to be solved with some kind of centrally managed travel management solution.

 So, having argued the case for avoiding Open Booking, the spotlight turns to Managed Travel. It’s probably fair to say that Managed Travel, in its first incarnation, was kind of clunky. Travellers were given the opportunity to book GDS content through a relatively rigid and inflexible web portal, which was better than the filling in of forms and calling a travel agent (Managed Travel 1.0), but still far from ideal.

 Fortunately, Managed Travel has grown-up and now delivers a very different experience for travellers, travel administrators and travel managers. Where Managed Travel 2.0 was inflexible and clunky, Managed Travel 3.0 is open, flexible and puts the traveller right in the center of the experience.

 Managed Travel 3.0 is built on three core - principles:

  1. Content is king – in Managed Travel 3.0 travellers can book from a far broader selection of content including mainstream leisure travel aggregators such as Expedia, and Wotif. By giving travellers access to the content they want, inside the managed environment; the incentive to leave, waste time (and money potentially) is removed and travellers feel far more comfortable working within the travel program. At the heart of Managed Travel 3.0 is a global content framework into which any travel provider can plug in quickly and easily, and where policies can be applied holistically.
  1. Experience is everything – by making it easy for travellers to book, change and cancel individual aspects of a trip (or whole trips) using mobile devices, tablets, desktops or home computers, it becomes second nature for them to rely on the Managed solution - because its quicker and easier to use than the alternative. Going forward the traveller and the travel booker will increasingly become the same person. So putting the traveller at the center of the Managed Travel experience is the only strategy that makes any sense.
  1. Integration drives value – travel booking systems do not exist in a vacuum and, in fact, become substantially more valuable to organisations when they connect into a range of other enterprise systems and solutions. For this reason, Managed Travel 3.0 must be flexible and open, allowing it to talk to existing ERP systems, finance systems, HR systems and, more importantly, expense management systems. With integration, organisations can streamline workflows, reduce errors and leverage existing approval hierarchies for pre-trip approval - a feature that is right at the heart of Managed Travel 3.0.

So, whether the motivation for looking at managed travel (again) is driven by compliance, cost saving or employee engagement, Managed Travel 3.0 is a compelling, high-value and important part of every enterprise system infrastructure.


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