How Procurement Teams Reduce Risk in Travel & Expenses
Business travel is important to all different parts of an organization--which is why procurement teams look to bring those disparate players together when selecting the right vendor partner. Now more than ever, procurement teams must show leadership and leverage their pivotal role to proactively manage risk across travel and expense management to help their organizations protect travelers and control costs on the path to business and economic recovery.
Recent events have highlighted the role of systems and processes in traveler safety. Duty of care, the legal obligation of an organization to care for its traveling employees, impacts the enterprise across these departments, putting the procurement team in a unique position to take a leadership role for ensuring business continuity and traveler safety in the event of an emergency, be it a natural disaster, political unrest, or global health crisis.
Let’s examine exactly how you as a procurement leader can help reduce risk across business travel and expense management by protecting travelers while controlling cost to support the success of your organization.
Bring leaders together to make an informed decision
As mentioned at the start, various business units, regions and departments need to come together through the procurement team to address the needs of a business -- especially when selecting something like a travel and expense management solution. This often includes Finance, Human Resources, Operations, Risk Management, Security, and of course Corporate Travel, among others.
Procurement needs to take a step beyond enabling travel and expense, and look at T&E management solutions through the lens of emergency and risk management, as well. We’ve seen recently that in the event of an emergency, collaboration and communication across departments and with travelers become critical.
Sample issues to address:
- How do you know where in the world your people are to determine if they are in harm’s way?
- If your security team needs to communicate with travelers—what tool will be used?
The procurement team not only needs to know if there’s a plan in place to address an emergency, they also need to have a ready list of technologies, vendor partners and resources, as appropriate, that their organization needs to put the plan in motion. Resources must always look at the situation through multiple lenses:
- Duty of care — How do we take care of those who use the product, as well as your employees
- Procurement of emergency materials — whether that’s hand sanitizer during a health crisis, or safely getting employees home after an earthquake
- Vendor partners — Those who will support you in executing your plan
This is where it’s essential for procurement to be involved in the creation of the plan: if the security team wants to increase the amount of hand sanitizer in the office as a result of a health emergency, procurement needs to obtain it. If your TMC evaluation didn’t include their looking at their technology and support capabilities for emergencies, you may find you don’t have the right partner only after it’s too late.
Take the lead in protecting the business
Particularly because travel historically has represented an area of maverick behavior (more than 50% of travelers book off-platform according to the Skift State of Business Travel Report), your team needs to have control, insight, a stakeholder-centric approach, and understand how to adapt. In good news, modern travel and expense management solutions are well adapted to reducing “rogue” bookings and ensuring high adoption by your travelers through their consumer-like ease of use, breadth and depth of inventory (especially inventory that appeals to traveler’s loyalty affiliations), and quality of travel agent support while traveling.
The key role that procurement has is to bring all players together to make good decisions for the entire organization.
Sample issues to address:
- Procurement must keep an eye on driving down cost while simultaneously helping to protect human and physical capital. In an emergency, does your travel and expense management platform have sufficient communication features for duty of care?
- How will you control expenses for employees forced to work remotely?
Support your employees during an emergency
During an emergency, travel, security, risk management and other teams will likely need support from the procurement team – and all these teams need to work together. For example, in an emergency, how do you procure supplies for travelers who are stuck far away from home? During the COVID-19 crises, many companies discovered that part of supporting travelers involves providing a sense of being heard, and demonstrating their company is taking action to help them.
Effectively addressing your travelers’ needs in a crisis helps alleviate concerns, fear, and stress, while strengthening your employees’ bond to the company--which is important to employee satisfaction, engagement, and loyalty. Provide travelers with a way to pay that doesn’t require floating the company an interest-free loan or dealing with frustrating, time-consuming expense reports, while streamlining the finance team’s reconciliation. As we all saw clearly, contingency planning is essential for your company’s travel and expense program. An event like the coronavirus is a high-stakes, high-pressure scenario for risk management. It’s important to examine business continuity and recovery, and create processes to support business travel in times like these.
Sample issues to address:
- What is your contingency plan for a global health crisis and other emergency situations?
- What’s the process for triaging support for travelers, potentially outside of your standard office locations?
- How will you communicate with traveling employees?
Considerations in Selecting a T&E Platform and Partner
Know where people are, where they’ve been and where they’re going. A robust T&E platform will show who has booked, traveled to or will be traveling to a given location that may put employees at risk – whether that’s because of natural disaster, terrorism, geo-political instability or health crises. Does your T&E platform make it easy to get that information?
Real-time access to data. Business continuity is mission-critical by definition, so your travel and expense management platform must provide access to data in real time--which is needed to make informed decisions quickly and effectively. Also important are the abilities to manage spend and monitor future travel with whatever changes or travel risks may arise.
Visibility & control. What’s the time delay from when an employee charges to the company card, to when finance is aware of it? Today’s modern T&E systems give real-time visibility and control so the finance team can make quick decisions around spending, and even prevent out-of-policy charges before they happen.
Ease of use. A solution is only valid if stakeholders embrace it. Ease of use for the traveler—as well as the finance, risk management, and travel management teams--is essential. Administrators should be able to reach out to travelers directly whenever they need to – they should not need to wait hours or days for reports to be pulled. Poor adoption of travel platforms means having limited to no visibility into traveler whereabouts, making it near impossible to know who has been or will be in harm’s way. Adoption of your travel program isn’t just a cost control issue, it’s a safety and security concern that impacts on your ability to provide duty of care. Consumer-like ease of use, breadth and depth of inventory, and 24/7 expert travel agent support go a long way to inspiring 100% adoption by your employees.
The intersection of processes and technology
When it comes to business continuity and risk in business travel, the technology used matters, a lot. Imagine a crisis during which your company uses a travel and expense platform based on out-of-date technology. How do you empower travelers to safely get home? The danger is that travelers may be dependent on older, less common web browsers or unable to make bookings via mobile--or that’s not built to be agile and flexible.
Dynamic + Flexible Traveler-Friendly Policies = Higher Traveler Satisfaction
The travel policy is an important component to a successful travel program. Too-strict travel policies are a source of headaches for travelers and travel managers alike. Travel inventory is notoriously fickle price-wise and traditional, static T&E policies often fail to address this reality. Too-strict policies often encourage travelers to buy out-of-system and lead to compliance issues.
The solution: Travel management tools that adjust dynamically based on the actual prices of a particular location during a set travel window help balance control with traveler needs. Within TripActions, admins can set dynamic policies for their travelers, whether they want to apply different policies for different employee groups, or change flight and hotel caps based on what the travelers are actually booking.
The Pivotal Role of Procurement
There are many different lenses through which procurement leaders must examine the purchasing decisions they make. When it comes to travel and expense management, an organization must seek control, insight, a stakeholder-centric approach, and an ability to understand how to adapt to changes both major--like the coronavirus--and mundane, like adding an office in a new region. And as we all have seen, these needs become even more critical during an emergency.
The ability to gain visibility, adjust policy, and communicate with travelers all become a business-critical requirement for your travel and expense management platform in times of crisis. When an organization adopts a solution for T&E management that is both flexible and consistent with your values and culture, your organization is well prepared to ensure business continuity well into the future.
Learn more about how one procurement team dramatically improved T&E management in our blog about TripActions customer Anaplan.