Most buyers agree that effective travel management centers on collecting, analyzing and applying data, but what is measured and how varies by organization. Even the question of 'why measure' does not have a common answer. "Ten clients have 10 different ways of evaluating performance," said Accenture Procurement Solutions T&E global category director Dan Maschoff, speaking here this month during an Association of Corporate Travel Executives conference.
Throughout the event, delegates and speakers shared their views on spending and savings metrics. At Ikea, for example, "we have decided to measure savings in relation to sales because it is very objective," said Yves Galimidi, global travel purchaser for the company's indirect materials and services. "We are growing, so we also have more activity and are traveling a little bit more. When we relate it to sales, nobody can question anything. We received approval from finance at the highest level."
Similarly, Agilent Technologies "at the macro level" analyzes "travel dollars versus revenue," said director of global travel sourcing Cindy Message. But when drilling down "to get into what it is we are contributing," Message, like many others, continues to use such familiar metrics as cost per mile for air travel and average room cost for hotel stays. "I can go down to the region and look if us going out and negotiating, and the work we are doing, has an impact on what we pay for hotel or what we are paying for our cost per mile on air travel."
But at Cisco Systems, "when I started, we were measuring things like cost per mile and I was wondering, 'Why are we measuring that? How can I control CPM?' " said director of finance Susan Lichtenstein. "So we measure things that we can control, change and manage."
Lichtenstein explained that Cisco convened an advisory board of various stakeholders to determine which metrics would be most needed to manage budgets. "The question we ask ourselves everyday is, 'Why are we measuring this?' " she continued. "If we can't answer that question, then we take it down and build something that makes sense."
In some cases, organizations are looking beyond familiar travel management data to determine the return on travel investment, time and labor components, and the impact of travel policies on employee retention. Ikea's Galimidi noted that his company in a few countries has implemented online booking tools, which "eventually" would generate savings through reduced travel staff headcount.
"I can foresee in the future that maybe human resources will be measuring the number of employees leaving the company as a result of changing policy," said Shell Oil Company U.S. travel services manager Debra Reid. "If we have a policy to downgrade class of service, we'll have people leave and go to competitors. You have invested a lot of money in your employees who are taking the intelligence somewhere else. We may at some point measure that. Work-life balance is important because you want people to stay for 10 or 20 years. It is not just saving dollars on airline tickets, but saving people's perceptions of the role they have and their jobs based on work-life balance."
At Lockheed Martin, "We are really starting to get focused on how travel impacts ROI savings to the corporation," said director of global travel and meetings Richard Wooten. "It is not looking at things so much like traditional travel metrics, but how does it impact things like labor, the time it takes to book a trip, etc. We are going to see more higher-level metrics that translate to how we influence the bottom line."
Meanwhile, one audience member said her organization has found it "very challenging to be able to identify and earmark savings in travel to the demand management effort." Given internal program changes and external economic pressures, "it is hard to know that demand management was to credit for the reduction in air spend or hotel spend. Our videoconferencing organization asked us to track this, and we are challenged by it." She wondered aloud if there are "any creative ideas on how you correlate one meeting reduction and calculate the savings."
Siemens Shared Services director of mobility services Steven Schoen suggested some procurement professionals are so concerned with first defining metrics before implementing initiatives that immediate savings are jeopardized. "I find there are a lot of missed opportunities because we are trying to figure out where to place the savings," he said. "Is it avoidance? Is it something else? The bottom line is that you did save the company money. The definitions can come afterward. There always will be arguments on the best way to classify it, but don't let the definitions get in the way of the progress."