10 May 2012 | Amon Cohen
Demographic and technological shifts are changing the way companies handle travel management.
Consumerisation is an unwieldy, but important term, increasingly being bandied around travel management circles. It refers to the growing ability of corporate travellers to act like private leisure consumers, choosing favourite suppliers through preferred shopping channels, all with a few taps on their mobile devices.
Consumerisation is creating a new world where, some believe, travellers know more than travel managers, policy is redundant, negotiated supplier deals are worthless and a monolithic, end-to-end procure-to-pay process is no longer a model towards which buyers should aspire. It is, in short, the end of travel management as we know it.
One expert who believes the old order is crumbling is Evan Konwiser, a US-based independent consultant. He attributes the change to two primary factors, one demographic and one technological. The first, he argues, is the younger workforce does not respond so well to policies and mandates. Second, he says, “the ease with which mobile apps can be created has democratised technology development. There are so many more tools on the market for the traveller to use. Ten years ago, corporate travellers were getting the good tools [such as online itineraries] from their companies, but now they believe they are paying extra to use corporate tools while missing out on great leisure travel tools.”
Tough luck, one might think, youngsters should do what they are told and follow the company travel policy. But Konwiser argues this risks alienating important talent who will seek alternative employment. In any case, says Scott Gillespie, another US-based independent consultant, making travellers follow rigid corporate processes is not in the interests of the enterprise either because the travel manager no longer has a monopoly on smart travel purchasing. “There has been a fundamental change in who knows best,” says Gillespie. “Travel managers used to be the primary holders of well-informed knowledge about travel suppliers and were therefore well-positioned to shape travel policy, but the proliferation of consumer-orientated travel tools has really eroded that.”
New mobile technology enables fast access to fare comparison engines that help travellers to book at the best price. Travellers are also taking advice via social networks from colleagues and friends about the suppliers that will best meet their needs. “The need for compliance is being challenged more credibly,” Gillespie says. “What is important is getting good value for money spent.”
Yael Klein, UK managing director of the corporate payments provider AirPlus International, concurs. “Companies will continue to have a travel policy, but it will be more about the cost of the trip,” she says. “If travellers can find something better, then we should let them.”
One company starting to move in this direction is Salesforce.com. At the Business Travel Show in London in February, EMEA travel and expense programme manager Robbie Hughes told his audience that “command-and-control” travel management is becoming increasingly unsustainable. “Travel policy is not dead,” he said, “but it is in need of an overhaul.” Hughes is reducing his travel policy from 24 pages to nine, but hopes to cut it further to one or two pages.
Another company that has been much written about, and can fairly be described as the progenitor of consumerised travel management, is Google. It permits employees to book what and how they please, with two major conditions: they must conform to a price cap and they must register their bookings in a proprietary database so the company knows what it is spending and can track travellers.
If travellers are to be given significant flexibility in which airline they fly or hotel they stay, the logical consequence is that preferred supplier agreements will become obsolete, because buyers will no longer be able to guarantee volume or market share in return for discounts. “Consumerisation will force buyers to buy differently. Not so much will be under contract as today,” executive director at the Association of Corporate Travel Executives Ron DiLeo told a technology conference in Paris in March.
Some airlines seem to be coming round to this view as well, including American Airlines and Virgin Atlantic. “There is more information at travellers’ fingertips than ever,” says Paul Wait, general manager sales at Virgin. “For me, signing a commercial agreement with a customer is only an invitation to the party; it doesn’t mean it will work. It will become more important in future for travel managers to win over the individual.”
However, public relations can only succeed if the underlying offer is right and Wait says his company is starting to be more flexible in its deals. For example, deals with Virgin no longer need to be year-round. Wait will now sell a deal for half that time if the client only travels to the destination during a six- month window in each year.
The consumerisation revolution in travel management does not stop at dynamiting entrenched notions about purchasing; it does the same to travel process management too. Torsten Kriedt, vice-president product planning and intelligence for BCD Travel, takes the view that the idealised model of travel management for the past 15 years has been the end-to-end (E2E) process. E2E, in theory, automates and integrates numerous tools and processes: typically one each for profile/policy, authorisation, booking, expense reporting, reimbursement and accounting. The aim is to create a seamless flow of procure-to-pay data and workflows.
E2E has had its successes, Kriedt believes, but these have principally been at large, multinational companies with heavily mandated travel policies and a sizeable budget for process investment. Now, for the reasons outlined by Konwiser, the model needs to evolve to embrace tools that appeal to the traveller as well as the enterprise. “It is no longer possible or desirable to impose a single, monolithic set of tools on travellers,” says Kriedt. “Travel managers may have to start positioning the traveller, not the corporation, as their primary customer, switching from a supply chain to a demand chain philosophy.
“This shift in attitude will lead to profound changes,” he continues, “including re-evaluating the number of mandatory tools and processes the traveller must use, tolerating and even integrating traveller-sourced tools, and making enterprise-focused tools and processes as traveller-friendly as possible.”
Kriedt thinks these changes will evolve the E2E model in broadly two different ways, depending on the travel profile, demographics and culture of the company. The moderate alternative, he says, “advances the traditional E2E linear travel process with a choice of tools that support the journey, including options that focus primarily on the needs of travellers.” Examples might include planning and check-in apps, location-specific deal apps, itinerary management systems and supplier rating sites.
A more radical model appeals to employees who respond better to being enabled than to being controlled. “In this model,” he says, “fewer tools are mandated and numerous traveller- and enterprise-selected tools and suppliers can be combined for each trip to support or out-perform the goals of the programme.”
It is important to note that even Kriedt’s more radical model does not entertain the idea of absolute freedom for the traveller. Cloud computing is making it much easier for companies to obtain and consolidate data from different sources, so the hard wiring of different tools to ensure reliable data flow in the traditional E2E model is no longer so critical. Nevertheless, even the most adventurous reworking of the corporate travel programme insists on at least one compulsory processing element for travellers. In the case of Google, it is the company’s proprietary database, called Trips, but Klein argues that a mandatory payment process would also do the trick. “Those who embrace change say costs must not go up and they must know where their travellers are, so there are still rules,” says Klein. “Mandatory payment means you can see how much travellers are paying and where they are.”
Other intermediaries will stake their claim to be the fixed point of a constantly shifting universe. But if the many experts who predict consumerisation will transform corporate travel are correct, all stakeholders are going to have to become accustomed to a much more flexible way of buying and controlling travel.
A starter’s guide to consumerising your travel programme
Understand your travellers
Start treating your travellers rather than the enterprise as your principal client.
Think about letting go
Re-evaluate which of your existing processes and enterprise-sourced tools remain truly essential. Can they be made non-mandatory, or even discarded completely?
Look for quick wins
Find some traveller-pleasing tools, such as location-specific apps, that can easily be integrated into your existing travel programme without greatly disturbing corporate processes.
Explain that although travellers can use alternatives, the official recommended channels offer more benefit to both them and the company.
Source: BCD Travel
☛ Amon Cohen is the supplement editor and a specialist business travel writer