Virtually all travel buyers surveyed bore responsibility for developing travel policies and reducing expenses in their organizations' travel programs, and a large majority helped their companies determine the return on investment of their travel departments and programs.
Procurement.travel's survey of 294 travel buyers showed that 92 percent helped craft travel policies at their companies, and more than 70 percent of that subset said they were directly involved in the process. While some buyers autonomously set and change policies, others had a more intricate process in place to fit with their corporate cultures.
Kathy Hall-Zientek, manager of travel services for Buffalo, N.Y.-based aerospace manufacturing company Moog, said upper-level managers at her company traditionally have been sensitive to overly strict travel policies, as many of Moog's engineers spend more time on the road than at home. To give weight to her policies, she forms a committee consisting of finance executives, risk management team members and travel department employees before making any major changes. "I've learned this works better and carries a lot more substance rather than being a one-woman show," Hall-Zientek said. "You have to justify policy changes; this way, it's not coming from one set of ideas."
Michelle De Costa, global travel manager at technology and marketing consulting firm Sapient, is directly involved with her company's travel policy and assists the expense management team on its policy as well. Most policy changes come directly from her team, though De Costa does need executive approval on major policy changes, such as when the company mandated use of its agency earlier this year, she said.
Her philosophy for crafting policy is to keep it simple, she said. Sapient has a single policy that covers most of its travelers, and that policy is only a few pages long in its entirety. "If you try to address too many things in a policy, it's hard to keep up with that policy," De Costa said. "We keep it to using preferred vendors, using the most economical, lowest logical fare for air, using preferred hotels and car companies, and, on the expense side, setting and tweaking limits on meals based on economic conditions."
Policy and expense reduction often go hand in hand. As such, 91 percent of travel buyers in the survey said they also had responsibility for reducing their company's travel expenses.
Hall-Zientek has worked with all supplier categories for travel cost savings: She has expanded her company's air contracts, globalized an agreement with a preferred hotel chain to get discounts overseas, negotiated with a North American car rental company to include service globally, negotiated airport parking rates across the United States and found ways to reduce fees related to value-added taxes, she said.
Although many cost-saving measures have led to more restrictive policies, a few companies have bucked that trend. Dr Pepper Snapple Group manager of travel and event services Barbara Campbell, who is responsible for both policy and expense reduction and reviews company policy annually, has focused more on convenience as the company has performed well financially during the past few years. "That doesn't mean we're still not pushing our suppliers to get a discount, but we're just not pinching pennies," Campbell said.
A solid majority also said they were responsible for monitoring return on investment. Nearly two-thirds were involved in determining ROI, with most of those buyers directly involved in that determination.
The definition and metrics for ROI vary wildly from company to company. Moog is an ARC-designated corporate travel department, so Hall-Zientek said she must prove her department's worth not so much through savings but through such revenues as rebates and commissions. "We show the cost to run the department through our budget, the revenue to produce and what it compares to should they have to outsource," Hall-Zientek said. "We make it very evident with every single avenue for rebates."
At Sapient, travel reports to procurement, so every member of the procurement team reports savings and ROI through impact reports, De Costa said. "Also, as a part of [my report], I can calculate any soft-dollar things we can do for travelers, such as executive membership and elevated status," she said.
Travel ROI at Dr Pepper Snapple Group ties into sales, Campbell said. When negotiating with airlines and hotels, the travel team asks suppliers what beverages the companies serve to their customers to see if a supplier also is a possible client. "We ask if they're willing to discuss it and walk away if they won't," Campbell said. "It's something I've been able to incorporate, and I've been successful. I can assist our sales department and hand off potential customers."