IBTM Study Qualifies The Effectiveness Of Travel Mgmt.
<B>IBTM Study Qualifies The Effectiveness Of Travel Mgmt.</B>
By Megan Hjermstad
The Institute of Business Travel Management, the education foundation of the National Business Travel Association, last month released a study indicating that a managed corporate travel program can be measured from a financial perspective relevant to the company and can contribute to shareholder value.
Entitled "Qualifying the Value of Effective Travel Management in the Creation of Shareholder Value," the study is the follow-up to a prior study, which found that few companies use sophisticated models to calculate the contribution of travel management to corporate bottom lines.
This more recent study, which was distributed to all NBTA members and the CEOs and CFOs of Fortune 1000 companies, was conducted by PricewaterhouseCoopers' shareholder value management group. Charged with examining how travel management could be quantified in terms of its financial contribution to a company, PwC measured the current and long-term added value of travel management through case study analyses.
PwC conducted a detailed review of two companies with relatively sophisticated operating models and reliable financial information. The first, a multinational Fortune 500 company with domestic T&E of $40 million, $25 million in U.S. air travel spend and $50 million on air travel worldwide, was reviewed in terms of its operations, corporate culture and financial performance. The second, a consulting company with T&E of $48 million domestically and $48 million internationally, was examined primarily from a financial perspective to provide a benchmark and add depth to the study.
Among the study's conclusions and recommendations were to establish a business planning process tied to corporate measures and targets with projected scenarios over three to five years; to identify resource requirements, such as personnel and infrastructure needed to support the plan; to measure other impact areas, such as new product developments or acquisitions that could affect travel spend; and to monitor and report performance, including the difference between actual and planned performance.
IBTM, which dedicates 75 percent of financial contributions to industry research and education, spent $72,000 on the study. IBTM's next study, "Travel Management Compensation and Benefits Survey," which includes data compiled from 376 travel managers, will be released later this month.