"It's me," said Valerie Fender, Blackboard senior manager for corporate travel and expense, when asked how many people comprise the education software company's travel management team. "You're talking to the travel and expense management team."
Although Fender was partly joking—she gets support from the IT and treasury departments should she need it—she solely is responsible for anything travel management-related. Blackboard has approximately 1,300 business travelers and annually spends less than $12 million on U.S.-booked air travel. "It's not a huge budget, but it's definitely something we want to control," Fender added.
On the expense management side, some travel managers are implementing expense systems and corporate card programs that can help them gain insights into spending and travel patterns, which then can lead to the creation of more efficient travel policies.
Likewise, suppliers also have become more savvy in understanding the specific needs of SMEs and in leveraging their resources to offer SMEs more affordable solutions. For example, Concur four years ago began offering SMEs in the United States specific expense management solutions, and recently expanded those offerings to Australia, Canada and the United Kingdom. Additional markets are to come, according to Elena Donio, Concur executive vice president and general manager of small and midsize businesses.
"Problems exist whether the company is big or small," said Donio. "We've taken all the knowledge and insights from all our configurations of our thousands of clients globally and asked, ‘What are the most common setup principles?'
"We finally got to the point where it was technically and financially feasible for the customer and for us to rethink the product strategy, pricing model and delivery of [our products]," she continued.
Leveraging Card Spend
Some SMEs depend on their travel management companies to help them gain discounts. Hair product firm Oribe Hair Care, which has about 75 frequent travelers, in 2008 decided to work with TMC Tzell Travel Group to "leverage the economies of scale," said Oribe CFO Sid Katari. "We could've easily brought in someone full-time to manage our travel, but we wouldn't have been able to leverage the discounts."
Similarly, Sempra Energy "piggybacks" on American Express Global Business Travel's discount program as one way of getting "certain airline and hotel discounts," according to Sempra Energy travel services administrator Jessica Davis. "It's definitely harder for us to get chainwide discounts because our overall spend with one chain doesn't meet its minimums."
Blackboard, Oribe and Sempra all issue corporate cards to employees. Sempra has a direct-bill/company-paid program for employees and a ghost card for temporary employees to pay for expenses up front, as well as a rebate program. "We've been trying to route as much activity to these company-pay cards to bump up our spend and increase our rebate," Davis said. "We were able to get a pretty good chunk this past year by doing that."
While Blackboard and Sempra allow employees to sign up for membership rewards programs as a personal expense, Oribe pools American Express reward points. "In the past individuals were keeping that benefit for themselves, but now we're at a size where all those points accumulated can be reinvested in the business to subsidize travel and get even more cost savings," Katari said.
U.S. Bank in March extended its FlexPerks Travel Rewards program—previously available only to consumer-card holders—to commercial-card clients. American Express last year began offering a membership rewards program allowing small businesses to pool company points.
Both Blackboard and Sempra have considered disallowing employees from collecting points, as foregoing reward redemption can improve corporate rebates, but each agreed that reward programs are a good way to incentivize travelers to sign up for the card scheme. The more data they collect, the more insight they have on spend. "If we deny them [the points], then there's less incentive for them to use the program," explained Davis, whose program is not mandated.
"If they can't have the points, then they'd rather use their personal cards," said Blackboard's Fender.
To save on currency conversions, Blackboard also is prioritizing locally issued cards for overseas-based employees and frequent international travelers. Fender also finds chip-and-PIN cards for overseas travelers "absolutely necessary."
Expense Reporting
While a card program helps businesses capture data by noting what and where travelers are spending, U.S. Bank travel product manager Mary Miklethun said that "even with that data, oftentimes the numbers don't add up to enough spend to give them opportunities to negotiate rates with preferred suppliers."
However, Miklethun said companies can adopt other tactics to manage travel spend, including implementing an automated expense reporting tool. Integrating an expense tool with a corporate card or a one-card—which combines at least two commercial card products—makes it easier for travelers to use the card and file expenses, she said.
"You don't necessarily need to hold off points," Miklethun explained. "It's more about making their life easier so those transactions are already populated in the software and they don't have to hand-key and manage receipts to do expense reporting."
Using existing resources, research and infrastructure, Concur developed product templates that were less intricate but maintained the most common principles of its travel management tools—thereby making them more affordable for SMEs, according to Donio.
For example, Concur noticed that SMEs tend to conduct more business domestically or regionally, unlike larger enterprises that might do more global or multinational business. This reduces the need for unique and tailored configurations that increase the tools' cost. Fewer configurations also means faster implementation, claimed Donio.
Blackboard is preparing to launch by April Concur Travel and Expense, and plans for lodging to experiment with TripLink—Concur's "open booking" platform. While Fender said airline discounts have declined, and she questions the value of negotiating airline agreements considering the agency fees necessary to fulfill those agreements, she doesn't believe "there are better deals to be had off of the GDS."
Lodging, however, is a different story. By manually comparing agency data and corporate card data, Fender said it's "very clear" that "people are finding lots of places for better deals off the company channel for hotel stays." Consequently, Blackboard will begin to allow hotel bookings outside company channels. Fender is hopeful that once Concur is up and running, she will be able to view more easily the average rate of in-program versus off–channel hotel bookings.
"We're trying to save money," she explained. "I can't make that claim and then say, ‘No, you have to book here even though I see it's double.' If you're not going to be sensitive to that, then you don't have a lot of credibility."
Oribe in February implemented Concur Expense. As it integrates with Tzell data, Katari said he's been able to establish a return-on-investment metric for individuals: how much profit individuals generate via a trip compared with how much the trip cost. While Oribe hasn't yet begun using this calculation to influence employee behavior, Katari said he hopes employees eventually will be incentivized to be more "frugal" if they know they're being measured on their efficiency rating. "Maybe they'll adhere to policies better," he added.
Other Bank Solutions
Banks and card networks also provide programs specifically targeted to SMEs, featuring discounted prices from the types of suppliers they most frequently use.
Visa's Savings Edge program provides discounts to SME debit or credit card holders at more than 50,000 hotels and more than 14,000 brick-and-mortar retailers for dining, transportation (excluding airlines), airport parking, electronics, office supplies, fuel and other business expenses. Discounts vary among merchants. For example, users can save 5 percent on airport parking, 10 percent on an airport shuttle and 1 percent on fuel at Texaco and Chevron.
Hotel discounts include such brands as Ramada, Howard Johnson, Super 8 and La Quinta, "hotels where SMEs tend to stay, because they're cognizant of cost," said Visa head of small business products Janet Zablock. The solution is available through most major banks, including Bank of America, U.S. Bank and Wells Fargo, as well as JP Morgan Chase's Ink and Capital One's Spark bank-branded programs.
MasterCard has a similar program, Easy Savings, which is offered through most major banks and provides SMEs with automatic rebates when MasterCard cardholders book travel, dine or buy gas at participating merchants. MasterCard also has the three-module and cloud-based MasterCard Network, powered by Rearden Commerce's Deem commerce platform. With it, SMEs can manage travel bookings, create travel policies, manage dining invitations for clients, set dining preferences through OpenTable and create basic expense reports. Both programs are free of charge for MasterCard holders.
"It's really important [for travel managers] to be open-minded and not be dismissive of newer ideas that come along, because travel management has changed so much and will continue to change—it's certainly not done the way it was 10 years ago; not 20 years ago," said Blackboard's Fender. "The role of the travel management company is changing. Everything is changing."
This report originally appeared in the April 14, 2014 edition of Business Travel News.