An interview with Hassan Nasser, the Travel Procurement Consultant of Expense Reduction Analysts team.
Hassan has over 20 years’ experience in travel, having worked at Qantas for 7 years and then system provider Travelport for 7 years and now 10 years with ERA. Hassan answers some question on high-risk areas for business in their travel expenses and highlights new ways in which technology may be able to reduce business.
Hassan – what areas would you highlight as being the highest risk areas for travel costs to blow out?
Compliance – or the lack of compliance – to the Travel Policy! My experience in the industry and the experience of many of my fellow travel consultants is that companies set up strict policies, and then forget about them or in many cases do not implement them correctly! While business is tough, there is a tendency throughout the company to focus on bringing in business, and the cost of the travel spend tends to be ignored.
But wouldn’t the Travel Management Company (TMC) make the company aware of this problem?
Not necessarily, no.
They will produce reports which are sent to the company travel manager on a regular basis, but these are frequently ignored after the first few months. This leads to a lack of accountability by travellers, and the subsequent lack of compliance, hence pushing up your Travel costs.
Q3. Are there any other areas you would highlight if you were conducting a review?
Hotel contract rates should regularly be monitored. It is important to know what to contract and to ensure that the correct rates have been uploaded. It is also very important to ensure that those rates are retained for the period of the contract and that favourable rates are again negotiated at the end of the contract.
Q4. What are your Hot Topics for 2018?
1. Simplification of Expense claims
I’ll start here because this is what I’m most excited about. I was a long-time road warrior and would rarely interact with a desktop interface. Suppliers have been perfecting the mobile experience so that everything you need to do to create and file an expense report can be done from a smartphone.
The other day I pulled out of the airport parking lot, took a picture of my $45 parking receipt, dropped it into my expense report and submitted the whole report 30 seconds after my trip was over. Gone are the days of overstuffed wallets and draws filled with weeks’ worth of receipts, everything is moving to real time.
The next step is for the phone to do a lot of the work for you. Improvements in GPS technology have led to precise geolocation accuracy. That combined with real-time data is enabling predictive recommendations that make compiling expense reports even easier.
For example, if you’re at a restaurant for an extended period, you’ll get a prompt to take a picture of the receipt, which will drop right into a pre-populated line item. If you drive during a business trip, your mileage will be calculated and recorded automatically and dropped into an expense report, where all you have to do is approve it. With many Expense Management Systems to choose from, ensure you opt for one that is right for your business.
2. Influencing spend on guilt and feedback
More help with expense reports is a good thing, since you may be graded on them. Scoring and feedback are getting baked into expense report submission to help create better corporate citizens.
For example, you might get feedback on a car rental or hotel stay, telling you if you paid an above average rate. The software can look at your airline ticket and compare the purchase date with the date of travel. Travellers who always purchase flexible fare may get a message such as, “A cheaper fare is available that can save you $120.”
Of course, you don’t always have that option so that you might get a low score for factors outside your control. The technology isn’t perfect yet, but it has an impact. Guilt reporting is becoming more of a focus on businesses who are trying to reduce travel costs and ensuring compliance.
This will drive travellers to become very familiar with costs and with company policies. Nobody wants to see their name on a guilt report that gets sent to senior management.
3. Automated compliant travel booking
Getting a score on your expense report is after the fact. Proactive notifications during the booking process are the next frontier.
Frequent travellers are already comfortable setting up alerts and getting real-time notifications of price drops and making on-the-fly changes to their travel. As we get tighter and tighter integration with booking tools, we will see more of this kind of thing, to the point where software can behave almost like an automated corporate travel agent influencing behaviour before spending happens, so nobody ever must be on the “non-compliant” list.
GPS technology could extend this capability to real-time activities as well, perhaps stopping a traveller from walking into a restaurant that’s too expensive and suggesting more economical ones nearby that are in policy.
These kinds of capabilities will become increasingly important as we continue to move in the direction of more online booking and less picking up the phone and talking to a travel advisor.
End to end solutions is growing in the market, so a detailed analysis is necessary to ensure you get the right product.
4. Data-driven gamification
Some companies are going beyond mere scoring to “gamify” good spend management practices by offering rewards to employees who meet targets—or beat them. People want to be good corporate citizens, and if you put some incentive in front of them, many will stretch themselves even further in that direction.
I know of one program where the company gives travellers the benchmark for hotel pricing in their destination city, and if they beat that price, they get a travel reward for 25% of the difference. That could be for personal use, or to use as an upgrade on a future business trip.
We will soon get to a point where some of these rewards can be offered in real time to make your stay more pleasant, as in, “Hey, we noticed that you booked a more economical hotel room. We’re going to reward you with a massage in the hotel spa, or dinner at a special restaurant, during your stay.”
5. Recommendations for travel managers
Predictive recommendations aren’t just for travellers; they’re for travel managers too. Applications can provide suggestions such as, “Avoid Perth as mining conferences are taking place because hotel rates will be high.”
These are based on years’ worth of historical data that shows, for example, that the third week of October is always the most expensive week. But, there’s also enough real-time data in these tools now to spot trends where hotels are pre-booking fast. Again, you don’t always have a choice of when to travel, but you have information to enable better decisions.
Cost prediction is another area of innovation, and the concept is to use the organisation’s historical travel spend data and mash that up with seasonal cost data and data from the internal booking and pre-approval process data, so finance managers can make better project costs and do their cash planning appropriately.
6. Analytics and reporting
Reporting and analytics are a huge growth category and are being applied across a wide range of travel and expense functions. One area that stands out is “duty of care,” which I think of as “find my travellers.”
This kind of capability has existed before, but it’s become much better with improvements in GPS and geolocation technology and by pulling in more data sources. All the travel manager must do is press a button to see where everybody is. It’s especially critical in crisis situations.
7. Data Intelligence
By now you’re getting the idea—data will be massive in 2018. Other people are getting the same idea. Providing managers with this kind of data intelligence used to be pretty much the domain of big travel management corporations such as American Express Business Travel and Carlson Wagonlit.
Now, we’re seeing new, specialised standalone data companies working with travel managers to give them better data. This data can get granular, such as looking at travel patterns by lead time for booking, compliance with supplier arrangements, or the differing behaviours of online and offline bookers. There are different types of reporting tools available in the marketplace. However, some are more user-friendly than others.
About Expense Reduction Analysts
We help clients to support the health and growth of their business, whatever its nature, focusing on proactive expense and supplier management. As an Australian and global company, Expense Reduction Analysts can benchmark costs and spending, follow the latest supplier innovations, and have real-time data on changes and advancements. This strength gives Expense Reduction Analysts the recognition and power needed on supplier markets to best serve your interests.
For more information please contact Ruth Cohen at rcohen@expensereduction.com
