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8/4/2019 Ur Pabu Darling
1/27
Best Practices in
Travel Business
Intelligence
By Norman L. RoseSponsored by:
8/4/2019 Ur Pabu Darling
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Best Practices in Travel Business Intelligence Ma 2008
22008 PhoCusWright Inc. All Rights Reserved
Author: Norman L. Rose
Editor: Colie Hoffman
Norman L. Rose
Senior Corporate and Technolog Analst
PhoCusWright, Inc.
Mr. Rose is a 26-year travel industry veteran with an
extensive background in both the corporate and leisure
travel markets. As an analyst and consultant or the
past 13 years, Norms ocus has been on emerging
technologies and how they impact business practices
in the travel industry. From 1982-1988, he held sales
and marketing management positions at United Airlines
and rom 1989 to 1995, Norm was corporate travel
manager or Sun Microsystems. At Sun, he worked
with a number o third-party developers creating
client/server sotware or the business travel market.
This included early prototypes o sel-booking tools
and expense management systems. In September
1995, Norm ounded Travel Tech Consulting, a rm that
specializes in developing e-commerce and procurement
strategies or travel and technology companies. Norm
has been an analyst with PhoCusWright since 1999 and
is the author o numerous publications and articles
including Corporate Travel Technologies: Today and
Tomorrow (September 2007) and Selling Complex
Leisure Travel Online: Focus on Dynamic Packaging
Technology (December 2004).
All PhoCusWright Inc. publications are protected by copyright. It is illegal under U.S. ederal law
(17USC101 et seq.) to copy, ax or electronically distribute copyrighted material beyond the parameters
o the License or outside o your organization without explicit permission.
Philip C. WolfPresident and CEO
Carol Hutzelman
Senior Vice President
Christine Lent
Vice President, Finance
and Administration
Bruce Rosard
Vice President, Sales
and Marketing
Lorraine Sileo
Vice President, Research
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32008 PhoCusWright Inc. All Rights Reserved
Table of Contents
Figure 1 7
Travel Management
Inormation
Figure 2 8
Sources o Travel Data
Figure 3 9
Traditional Travel
Inormation Flow
Figure 4 9
Traditional Pre-Trip Data
Figure 5 11
TMC Report Types
Figure 6 11
Traditional TMC Data
Figure 7 13
Electronic Expense
Reporting Systems
Figure 8 13
Charge Card Data
Figure 9 14
Common GDS Travel
Inormation Flow Today
Figure 10 16
Corporate Booking Tools
Figure 11 17Supplier Inormation
Figure 12 19
Corporate System
Integration
Figure 13 21
Ideal Travel Inormation
System Design
Figure 14 27
Achieving BestPractices in Travel
Business Intelligence
Executive Summar 4
Introduction 6
Sources of Data 8
Emerging Methods 14
for Data Collection
Best Practices in 20
Business Intelligence
Moving from Data to 23
Information to Action
Additional Success 24
Stories
Summar and 26
Recommendations
Contents List of Figures
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Best Practices in Travel Business Intelligence Ma 2008
42008 PhoCusWright Inc. All Rights Reserved
The Sabre Travel Network and GetTherehave contracted with PhoCusWright to
create this white paper on best practices
in travel business intelligence. This white
paper reviews the sources o travel data
and the role dierent sources play in the
travel management process. The paper
discusses how an eective travel business
intelligence strategy can positively impact
a corporations bottom line. Specic
examples o how companies have created
best practices in travel business intelligence
are discussed. The inormation and analysishere was derived rom multiple interviews
with corporate travel managers and
buyers, as well as detailed reviews o
travel data management solutions rom
travel management companies (TMCs),
global distribution system (GDS) providers
and third-party developers over a two-
year period.
Some o the best practices highlightedin this paper include:
DatafromtheGDSandcorporate
booking tools provide the oundation
or pre-trip and post-ticketing
inormation and can be used to
identiy actionable recommendations
that will aect traveler behavior beore
the trip is taken.
Withthemainstreamacceptance
o corporate booking tools (CBTs),
identiying travel policynoncompliance during the
reservation process has become
part o best practice travel programs.
When compliance gaps are identied,
corporations need to implement change
management strategies at the point o
sale via the corporate booking tool.
In addition, CBTs are adding business
intelligence capabilities, providing
real-time policy compliance tracking.
Travelmanagersneedtoactas
acilitators o inormation rather than
enorcers o policy by distributing
travel business intelligence throughout
the enterprise, allowing nance
managers, department heads and line
managers to use this inormation to
infuence behavioral changes at the
individual traveler level.
Executive Summar
With the mainstreamacceptance o corporate
booking tools (CBTs),
identiying travel policy
noncompliance during the
reservation process has
become part o best practice
travel programs. When
compliance gaps are
identied, corporations
need to implement change
management strategies at
the point o sale via the
corporate booking tool.
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52008 PhoCusWright Inc. All Rights Reserved
ThetraditionalowofGDSinormation into agency back-oce
accounting systems is being augmented
by near real-time delivery o GDS
inormation to travel business
intelligence systems.
Todrivegreatercompliance,best
practice travel managers and buyers
create scorecards contrasting dierent
corporate divisions and highlighting
missed savings opportunities.
Integratingtravelinformationviaonline travel procurement/booking
solutions with internal corporate sot-
ware systems (e.g., AP, AR, CRM, data
warehouse, ERP nancial modules
and human resources) can benet the
enterprise in a number o ways.
Aclearbestpracticeisemergingthat
integrates detailed (third-level) hotel
olio inormation rom the charge
card companies, exposing hotel olio
inormation to other travel business
intelligence systems.
Anemergingbestpracticeistoreceive
an electronic eed rom a companys
major suppliers to identiy potential
gaps between supplier and TMC data
sources beore renegotiations begin.
Largecompaniesthathavestandardprocesses in place (e.g., global TMC
contracts, charge card agreements,
and expense management systems)
have greater leverage to pressure
the electronic submission o supplier
data into a central travel management
inormation system. This inormation
should ultimately be available via
reporting and dashboard eatures
rom an online travel solution
or instant visibility and spend
management control.
Onesuccessfulbestpracticeisto
standardize with a common GDS
reservation platorm and one CBT in
order to collect inormation on a global
basis. This best practice will also
be useul or micro-multinational
companies, whose international oces
are small and who are nding it dicult
to put standard processes in place.
Tobetterpositionthetruevalueof
eective travel management, bestpractice travel managers use corporate-
based measurements or example,
calculating the percentage o sales
perormance, translating travel savings
opportunities into the ability to hire
additional personnel or equating travel
cost savings to improved earnings per
share to drive home the impact travel
expenses have on the bottom line.
One successul best practiceis to standardize with a
common GDS reservation
platorm and one CBT in
order to collect inormation
on a global basis.
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62008 PhoCusWright Inc. All Rights Reserved
Inormation is the oundation o an eectivetravel management program. Without the
right inormation delivered at the right time,
companies cannot eectively negotiate
supplier contracts, monitor policy
compliance or pinpoint opportunities or
additional cost savings. This may sound
like Procurement 101, but with a myriad
o sources or travel data, turning that data
into actionable inormation is not a simple
task. Business intelligence (BI) reers to
applications and technologies which are
used to gather and analyze data aboutcompany operations. True business
intelligence extracts meaning rom multiple
sources data that might not be explicitly
apparent rom simply generating reports.
The emergence o BI corresponds to the
increasing volumes o business data now
captured or analysis. The volume o
data and the growth o data sources are
impacting the ability o companies to
implement eective travel management
strategies. Best practices in travel business
intelligence are needed to sit through
this data in order to extract the relevant
inormation to implement change.
This white paper explores the various
sources o travel data and discusses
best practices in using inormation to
reduce travel expenses that impact the
companys bottom line.
Opportunities and Barriers to
Effective Travel Data Management
Why is travel data aggregation not a simple
task? One reason is that dierent sources o
travel data oten produce dierent results.
Even a basic question such as How much
does my company spend on travel on a
global basis? can yield dierent numbers
depending on the source. Unlike otherindirect services, travel purchasing does not
fow through a single procurement system.
A company may use a variety o travel
agencies, orms o payments or GDSs
on a worldwide basis. Even when these
issues are mitigated through corporate
mandate or a single global TMC, charge
card or technology provider, the very
nature o travel inormation is subject
to inconsistencies. Comparing dierent
sources o inormation, such as booked,
ticketed, or consumed (e.g., fights fown,hotel room used or cars rented), refects
dierent stages o the travel process,
oten producing inconsistencies that
many companies have diculty in
rectiying. Despite these challenges, a
clear set o best practices has emerged
rom leading multinational companies.
How Is Travel Information Used?
The type o question being asked oten
dictates which source o data is most
appropriate. For example, eective
supplier agreements can only be negotiated
i a company has detailed knowledge o
its travel patterns and associated supplier
usage. This inormation is needed at all
points o the supplier management process
(see Figure 1). Company travel statistics
are essential or the request or proposal
(RFP) and evaluation processes. Once
negotiations are complete, the agreements
must be implemented, and at this point
travel management inormation is critical
to ensure traveler compliance and measure
the programs success.
Introduction
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Its important or corporate travel managers
to negotiate and report at the detail level,
as negotiations still come down to specic
airline city pairs or hotel room rates.
Thereore, the best practice is to include
reporting at this level o data, all the way
through the expense systems.
Corporations must measure compliance
through the use o travel management
inormation to ensure that negotiated
goals are met. Conversations with travel
managers have reinorced the need to look
at compliance as a team eort enlisting
support rom senior management, division
heads, and nancial controllers. One
o the key success actors in driving
compliance is the distribution o
inormation throughout the enterprise,
which allows nance managers,
department heads and line managers
to use this inormation to infuence
behavioral changes at the individual
traveler level. In this way, the best travel
managers act as acilitators o inormation
rather than enorcers o policy.
Travel
Management
Information
GatherSupplier
Usage Detail
Create RFP
EvaluateResponses
Negotiate
Contracts
ImplementContract and
Policy
BookingOnline/Offline
Figure 1
One o the key successactors in driving compliance
is the distribution o
inormation throughout the
enterprise, which allows
nance managers, department
heads and line managers
to use this inormation to
infuence behavioral changes
at the individual traveler level.
In this way, the best travel
managers act as acilitators
o inormation rather than
enorcers o policy.
Travel Management Information
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82008 PhoCusWright Inc. All Rights Reserved
There are traditional and emerging sourceso travel data. Figure 2 describes the
various sources o data.
Traditional Sources of Data
Booked Data
GDS(bookd)
As the primary record o the transaction,
GDS data is the oundation or pre-trip
and post-trip reporting. Traditionally,
agency back-oce accounting systems
served as a source o data or TMCs.These systems were originally designed,
as the name implies, to help travel
agencies reconcile travel inormation or
accounting and billing purposes. In the
late 1970s and early 1980s, travelagencies began to ocus more on
corporate travel, and back-oce tools
soon became a source or travel
management reporting. These
accounting systems were developed
by the GDSs, who are still the primary
vendors o agency back-oce systems.
Accounting system travel inormation
is essentially GDS data that has
been reconciled or reporting and
settlement through the Airline
Reporting Corporation (ARC, U.S. only)or the Billing and Settlement Plan (BSP)
or travel agencies based outside the
U.S (see Figure 3).
GDS(booked)
CorporateBooking
Tool
TravelAuthorization
GDS(ticketed)
TMCBack Office(reconciled)
ExpenseReports
ChargeCard
CorporateFinacialSystems
Suppliers
Air
Cars
Hotels
Other
Booked Ticketed
Consumed
= Traditional Sources of Travel Data
= Emerging Sources of Travel Data
Figure 2
Sources of Data
Sources of Travel Data
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In this traditional travel inormation
fow, call center agents annotate GDS
passenger name records (PNRs) to
identiy corporate organizational
structure and to record noncompliance
in the orm o reason codes. The
inormation rom the GDS is sent
to the travel agency back-oce
accounting system, which in turn
generates reports. An inherent problem
with this traditional inormation fow is
the delay in receiving reports theycan take up to 30-45 days ater the
transaction has been reconciled in
the back-oce system.
TavAtoizatios
Another source o pre-trip data is travel
authorizations. As originally imagined,
travel authorizations were intended to
control the travel purchase, ensuring
that travel plans were within budget and
had the proper levels o authorization.
In practice, ew corporations have strict
travel authorization policies that prevent
bookings. Most companies operate in
a passive mode, notiying supervisors
o policy noncompliance prior to travelbut not preventing the trip rom being
booked. Corporate sel-booking tools
(CBTs) have eliminated the need or
traditional travel authorizations.
Call Center
Reservations
IUR (Interface
User Record)
Travel Agency
Back-Office
Accounting
Systems
Reports
delivered 30-40
days after
ticketing
GDS
STrenGThS WEAkNESSES
Near real-time insight into travel booking
patterns
Report-based systems management o
pre-trip inormation dicult
Up-ront policy enorcement Dependent on timing o report, diculty
in communicating policy noncompliance
to travelers direct supervisor
Risk management indentication and
enorcement
With traditional pre-trip reporting
products oten risk management
concerns require rebooking o
employees ater the reservation
has already been made
Figure 3
Figure 4
Traditional Travel Information Flow
Traditional Pre-Trip Data
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Ticketed TMCBackOfc
TMCs provide post-reconciled
inormation on travel patterns and
reservation behavior based on GDS
data. The inormation contains
details about city pair usage, average
ticket prices and top destinations.
Most companies still rely on the concept
o reason codes, which are embedded
in the GDSs PNR to monitor travel
policy compliance compliance
reporting is a major use o this data.
In addition, PNRs are annotated to
track travel expenses by a corporations
department and divisional structure.
This helps acilitate a key element o
best practices by allowing a travel
manager to compare the perormance
o dierent divisions within a single
company. For example, a director o
global travel or a large consumer
products company creates scorecards
contrasting dierent corporate divisions
and highlighting the missed savings
opportunity across these divisions.
This type o comparison has been
successully used to measure policy
compliance, booking patterns (e.g.,
number o days prior to the trip the
reservation was made) and online
adoption o CBTs across the companys
business units. As a result, the natural
competitive nature o these business
units has resulted in lower average
ticket prices, increased adoption othe CBT and greater travel policy
compliance.
TMC Inormation Systems ContentTMC back-oce reports essentially all
into three broad categories (see Figure 5):
executive summary, vendor analysis,
and compliance. These categories do
overlap or example, compliance
review could be part o an executive
summary. The examples cited do not
represent a complete list o all the types
o inormation in each category, but are
intended to illustrate the breadth and
depth o TMC inormation systems.
exctivSmmay:This includes
summary o total spend by categories,
divisional and departmental break-
downs, geographic comparisons and
month-to-month or year-to-year
perormance comparisons.
VdoAaysis:This includes
detailed analysis o airline market share,
cost per mile (CPM), city pair analysis,
hotel nights and properties used and
car rental statistics. Some progressive
travel buyers are also measuring limo
expenses, restaurant expenditures
and event tickets, though these other
categories are not traditionally captured
by TMC inormation systems.
Compiac: This broad category
encompasses the entire subject o policy
monitoring and enorcement or
example, lost savings when travelers
do not choose the preerred supplier,
are or rate, as well as identication o
incomplete segments (e.g., itineraries
with air but no hotel). Also within this
category is booking behavior, including
online adoption and advance purchase
booking patterns.
... a director o global travelor a large consumer products
company creates scorecards
contrasting dierent corporate
divisions and highlighting the
missed savings opportunity
across these divisions.
As a result, the natural
competitive nature o thesebusiness units has resulted
in lower average ticket prices,
increased adoption o the
CBT and greater travel
policy compliance.
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1
Executive Summary
TotalSpend byCategories
DivisionalBreakdown
GeographicBreakdown
Year-to-YearPerformance
Compliance
LostSavings
IncompleteSegments
OnlineAdoption
AdvancedPurchase
Compliance
Hotel
breakdown
breakdown
Other
Air
Car Rental
Booking Behavior
Figure 5
Figure 6
STrenGThS WEAkNESSES
Detail on supplier perormance, travel expenses
and compliance
Oten not delivered in a timely ashion (30-45 days
ater the trip has occurred)
Allows comparison o decision/departments to drive
greater compliance
Divisional breakdowns are still based on accounting
codes in the PNR, which are subject to errors
Standard and ad hoc reporting capabilities Reports do not necessarily answer specic travel
management queries, oten requiring multiple report
generation and manual analysis
Executive and detail summaries Executive summaries oten do not allow drill down to
detail. Report paradigm limits travel managers ability
to distribute key snapshot inormation to corporate
stakeholders.
2008 PhoCusWright Inc. All Rights Reserved
Traditional TMC Data
TMC Report Tpes
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1
In addition to the creation o standardreports, many corporate travel managers
create their own reports or distribution
and presentation. Oten, benchmarking
inormation is included in these custom-
generated reports to compare the
companys travel patterns and costs with
like companies in the same industry or
companies with similar travel expenditures.
For example, a director o global travel or
a consumer products company uses bench-
marking data rom a variety o sources,
including the TMCs consulting group, third-party consultants and inormation provided
by the CBT vendor. The most successul
travel managers use division-by-division
comparisons to help drive greater
compliance and ultimately, to change
traveler booking behavior. In this sense,
the travel manager is a acilitator o
inormation rather than an enorcer o policy.
TMCs and third parties also oer consulting
services, which are generally contracted
independently. These services analyze
specic vendor categories by looking
at contract perormance and savings
opportunities, and they use proprietary
sotware that not only looks at past
perormance, but also projects the value
o contracts going orward, taking into
account the availability o specic inventory
categories required by each contract. These
consulting engagements generally involve
a specic set o recommendations that, i
enacted, will translate into concrete savings
to the companys bottom line.
Consumed ectoicexpsrpotigSystms
Automating the expense reporting
process provides corporations with
savings and visibility and drives
greater eciency in the reimbursement
cycle. Benets o automated expense
processing include greater policy
controls, automated auditing, spend
data visibility, potential supplier
identication, trending or annual
budgets and aster reimbursement to
travelers. Inormation extracted rom
expense management systems
provides insight into the expense side
o the travel process. In order to be
reimbursed, travelers must document
all costs associated with a given trip.
As an inormation source, expense
management systems provide a more
holistic view o travel expenses and
thus can be directly tied to budgetary
perormance.
2008 PhoCusWright Inc. All Rights Reserved
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CagCadPogams
One important nancial tool is
corporate-mandated (or corporate-
recommended) charge cards. By
implementing a single orm o payment
on a global basis, charge card
inormation has become a critical source
or travel management inormation
analysis. The use o charge cards or
travel expenses is not a universal reality,
as some areas o the world continue to
pay travel expenses only ater a TMC
invoice is generated. Over the last
our years, there has been a concerted
eort by charge card vendors to obtain
olio-level data, also reerred to as level
3 data. Level 3 is the most detailed
credit card data, delivering not only
the merchant name, location and charge
amount, but also details about the
transaction. Hotel olio inormation
provides the actual room rate, number
o nights and details on all charges that
appear on a travelers bill.
Figure 7
STrenGThS WEAkNESSES
Tracks actual expenses Actual expenses are only available once the employee completes the expense report. The
lag in reporting can skew the results by a month or quarter. Savings cannot be realized ater
the expense has already occured.
Automates manual
process
There is no ubiquitous solution. There are some large industry providers in this category,
but a good majority o corporations have homegrown solutions that range rom proprietary
expense applications to a simple Excel spreadsheet.
Hotel olio and
e-receipt integration
Hotel olio transmission and capture is dependent upon hospitality technology, which is
highly ragmented and property-based and thus has been slow to come to market. Until
e-olio is ubiquitous, manual entries are still required.
Integration withcorporate systems
Corporate integration can refect actual expenses but lag in reporting could skew results.
Figure 8
STrenGThS WEAkNESSES
Tracks actual expenses Expense detail may be lacking i level 3 data is not included. Also, out-o-pocket
expenses are not refected.
Hotel olio and
e-receipt integration
Hotel olio transmission and capture is dependent upon hospitality technology,
which is highly ragmented and property-based and thus has been slow to come
to market. Until e-olio is ubiquitous, manual entries are still required.
Integration with
corporate systems
Expense lag and payment may skew results across months or quarters.
Integration is impractical i level 3 data is not available.
Charge Card Data
Electronic Expense Reporting Sstems
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Data collection and analysis has beenpermanently changed by the introduction
o new technology. This includes the
mainstream adoption o CBTs, the ability
to capture GDS inormation directly into
a data warehouse and the ability to eed
supplier data electronically into the travel
inormation system. The growth o
business intelligence within theenterprise has resulted in a greater
need to integrate travel inormation
with internal corporate systems.
This common GDS travel inormation fow
incorporates more advanced technology
to capture and control booking behavior
beore the expense is incurred.
Data collection andanalysis has been permanently
changed by the introduction
o new technology.
The growth o business
intelligence within the
enterprise has resulted in
a greater need to integrate
travel inormation with
internal corporate systems.
Call Center
Reservations
Corporate
Booking Tool
GDSData
Warehouse
Business
Intelligence
Business intelligence
Platform provides:
and trends
Figure 9
CommoGDSTavIfomatioFowToday
Emerging Methods for Data Collection
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Booked
CopoatBookigToos(CBTs)Over the last seven years, CBTs
have become a mainstream way
or corporate travelers to book their
reservations online and drive policy
compliance. As a result, the ability to
use CBTs to alter traveler behavior at
the time o booking has become an
important cost savings opportunity.
For example, GetThere has the ability
to deliver timely, market and vendor-
specic notes to travelers as they
shop online to book their trip. This
dynamic messaging helps drive use
o preerred air, car and hotel vendors.
Corporations also use dynamic
messaging or relevant cost-saving
messages, such as alternative
transportation methods to and rom
an airport when traveling to specic
cities. Messages can be triggered at
numerous points in the booking
process, giving managers newound
fexibility to infuence multiple aspects
o travelers trips.
In addition, these tools have also
emerged as a source o inormation
or eective travel management. CBTs
capture booking behavior at the point
o sale, giving greater visibility to the
options viewed and selected by the
traveler or travel arranger. In act, at
this stage in their development, sel-
booking applications are much more
than simple tools that automate thereservation process they have
matured into complex solutions that
provide unprecedented upront control
o travel policy. Best practice travel
managers closely monitor supplier
usage and utilize CBTs to shit bookings
once contract commitments have been
met. This drives increased usage o
preerred suppliers and thus positively
infuences BI measurements.
An emerging trend is or vendors to
release interactive dashboards that
track overall perormance and provide
actionable intelligence to the corporate
travel manager. By proactively
generating alerts, CBT dashboards
will soon become a crucial source oinormation, providing critical real-time
identication o policy noncompliance
or risk management issues to the
corporations management. Whether
the tool is delivered through the TMC
reseller or directly rom the CBT vendor,
the emergence o business intelligence
technology rom CBT vendors
illustrates the critical role CBTs play
in both automating reservations
and providing actionable, real-time
intelligence. Proactively identiyingcompliance issues at the time o
booking is the only way to prevent
an expense rom occurring. By
organizing this inormation in an
interactive dashboard, immediate
opportunities can be programmatically
identied. This is a dramatic change
rom a report-based environment,
where travel managers must actively
query pre-trip data in order to run
a specic report that highlights
noncompliance or risk management
issues. A report-based process lacks
real-time notication, oten resulting
in missed opportunities.
the ability to use CBTs toalter traveler behavior at the
time o booking has become
an important cost savings
opportunity. For example,
GetThere has the ability to
deliver timely, market and
vendor-speciic notes to
travelers as they shop
online to book their trip.
the emergence o
business intelligence
technology rom CBT
vendors illustrates the
critical role CBTs play in
both automating reservations
and providing actionable,
real-time intelligence.
Proactively identiying
compliance issues at
the time o booking is the
only way to prevent an
expense rom occurring.
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CBTs draw inormation rom a variety osources. Though the GDS remains the
primary source o CBT inventory, most
tools incorporate low-cost carriers
and other Web-based inventory into
a single display. Some tools also
connect directly into supplier
reservations systems. Because o
this multi-source capability, CBT
inormation provides greater visibility
into all the options evaluated at the
point o sale, closely tracking the users
reservation process. With a traditionalcall center-based reservation process,
policy exceptions are tracked by
entering reason codes into the
passenger name record (PNR). These
codes do become part o GDS data
delivered by the TMC, but are less
visible to the employees manager.
But when a traveler or travel arrangeruses a CBT, policy violations are
communicated at the point o sale
through an online notication. I the
traveler does not change the selection
to be compliant, the violation is
automatically sent to the employees
manager. The visual guilt and ear
created by an electronic reservation
environment have brought policy
compliance to the individual transaction
level. Thereore, driving online
adoption provides not only a costsavings opportunity designed to
reduce TMC transaction ees, but
also an improved inormation fow
that helps proactively drive policy
compliance, resulting in lower overall
trip costs.
The visual guilt and earcreated by an electronic
reservation environment
have brought policy
compliance to the individual
transaction level. Thereore,
driving online adoption
provides not only a cost
savings opportunity designed
to reduce TMC transaction
ees, but also an improved
inormation low that helps
proactively drive policy
compliance, resulting in
lower overall trip costs.
Figure 10
STrenGThS WEAkNESSES
Ability to alter traveler behavior at the time o booking Corporate Travel Managers must work with internal
stakeholders to develop dynamic messaging that
supports policy goals, but also recognizes the needs
o the traveler.
Gain visibility to the options viewed and selected by
the traveler
Many companies use the CBT to generate a passive
notication, thereore the responsibility to monitor
noncompliance lies with travelers supervisor.
Provides travel management the ability to shit
bookings based on supplier contract commitments
Supplier contract commitments need to be balanced
with traveler preerences .
Dashboards that track overall perormance and
provide actionable intelligence (Emerging trend)
Primary view is on booked and ticketed data
and thereore CBT dashboards may lack true
expenses incurred.
CBTs draw inormation rom multi-sources allowing
greater analysis o multiple sources o data
To be an eective tool the CBT adoption needs to be
high to make the multi-source inormation valuable.
CopoatBookigToos
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Ticketed GDS(ticktd)
Some newer approaches to travel
management data integration bypass
the travel agency accounting system,
allowing the extraction o inormation
directly into a travel data warehouse.
This approach normalizes the travel
inormation within the data warehouse
to provide more real-time inormation.
As tickets are exchanged or reunded,
a revised record is generated and
normalized in the data warehouse.
Providing this near real-time fow o
inormation enables proactive travel
management. The inormation may be
delivered in a nightly batch or streamed
directly into a travel inormation data
warehouse. The data warehouse may be
housed by the GDS, TMC, a third-party
technology provider or may be part o
an internal corporate data warehouse.
Consumed SppiData
At the core o an eective travel
management program is the ability to
negotiate preerred agreements with
suppliers. Travel inormation provides
the oundation or these negotiations,
but ultimately supplier data is the
measure o contract perormance. It
is common to nd gaps between TMC
or expense inormation and reports
generated by the supplier.
STrenGThS WEAkNESSES
Airline Perormance Data An emerging best practice is to receive
an electronic eed rom a companys
major airline suppliers used to identiy
potential gaps between the two corporate
travel management sources and airline
inormation beore renegotiations begin.
Hotel Inormation Hotel suppliers track usage o corporate
agreements through special rate codes,
but errors do occur, so hotel usagenumbers dont always synch with travel
management inormation
Car Rental Inormation Car rental companies have long provided
detailed reporting o rental usage or
corporate customers, and these reports
oten contain more detail than exists in
the TMC inormation system
Figure 11
Supplier Information
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Supplier CooperationThe amous quote by Alred Kahn,
ather o airline deregulation in the Carter
Administration, is worth repeating here:
The denition o yield management is
ou yield to m management. By the very
nature o supplier/customer relationships,
each party tries to gain the upper hand
in the negotiation process and
inormation is at the center o all
negotiations. The willingness o an airline,
hotel or car rental supplier to provide
an electronic eed o actual fown, stay
or rental numbers to a company is
dependent on whether that supplier
believes the delivery o the inormation
will result in better perormance. So,
those best practice companies that have
standard processes in place (e.g., global
TMC contracts, charge card agreements,
expense management systems) have an
upper hand on these negotiations and thus
greater leverage to pressure the electronic
submission o supplier data into a central
travel management inormation system.
CopoatFiaciaSystmsBest practice travel managers work
with nance managers to calculate the
cost o travel as a percentage o sales
perormance, translating travel savings
opportunities into the ability to hire
additional personnel, or even equating
travel cost savings to improved earnings
per share. Corporations rely on internal
systems or budgeting, planning,
accounting and customer management.
With much o travel inormation existing
outside these applications, integratingtravel data with corporate systems is
clearly a best practice. Figure 12 lists
various internal corporate systems
and describes how integrating travel
management inormation provides
value to the enterprise.
The willingness o an airline,hotel or car rental supplier
to provide an electronic eed
o actual lown, stay or rental
numbers to a company is
dependent on whether that
supplier believes the delivery
o the inormation will result
in better perormance.
So, those best practice
companies that have
standard processes in place
have an upper hand on these
negotiations
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Figure 12
SySTEM VAlueOFInTeGrATInGTrAVelInFOrMATIOn
Accounts Payable (AP) Integration with AP systems is critical to track reimbursement cycles and employee expense
management behavior.
Accounts Receivable (AR) Accounts receivable integration can provide the enterprise a way to account or unds
due rom negotiated supplier agreements, such as back-end airline program and charge
card rebates.
Customer Relationship
Management (CRM)
Systems
By integrating travel inormation into CRM systems, senior management can better
understand the travel component o the overall cost o sales as it relates to specic
customers.
Data Warehouse Integrating travel inormation into the companys internal data warehouse provides a way
to use enterprise-wide reporting standards or travel inormation distribution.
E-procurement Systems Corporate booking tools can be tied to e-procurement applications to allow a single entry
point or all employee purchases.
Enterprise Resource
Planning (ERP) Financial
Modules
ERP systems oten house the corporate General Ledger (GL), which measures corporate
perormance. Integrating travel inormation with these systems can improve budget
tracking and planning.
Human Resources (HR) With the constant changes in employee inormation, integration with HR systems canensure that travel proles are accurate and that organizational changes are correctly
represented in travel reporting. This integration enables companies to evaluate travel
compliance based on organizational hierarchy.
Corporate Sstem Integration
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Corporate Data RequirementsCorporate travel data provides not only the
oundation or supplier negotiations and
compliance measurement, but also the
source or internal and external reporting.
DatafoGovmt
Reporting Purposes
The 2002 Sarbanes-Oxley Act (SOX)
was passed to rebuild public condence
in the way corporate America governs
its business activities ater the highly
publicized scandals at Enron andWorldCom. SOX has given added
corporate ocus to the integration
o travel management inormation
systems, particularly the automation
and storage o expense management.
The Act also provides motivation or
senior management to work with
their corporate travel department to
consolidate disparate travel systems.
DatafoSppis
Many companies have implemented
scorecards or all their direct and
indirect suppliers. Scorecards generally
operate on the total cost o ownership
concept that blends price savings
with service delivery to establish a
quantitative score.
DatafoTMCSctio
When a corporation decides to rebid
its TMC contract, the corporate travel
department must compile inormation
that not only tracks supplier usage, city
pairs and destinations, but also includes
operational metrics, such as number
o transactions by location, online
adoption, current and proposed service
congurations and mix o domestic
versus international volumes.
ItaMaagmtBest practice travel managers build
alliances with multiple levels o
corporate management. These alliances
range rom C-level support to divisional
heads, nance managers and ultimately
line managers. Comparing perormance
on savings, online adoption and other
metrics across the enterprise is critical
in driving greater support or the travel
management program and ultimately
changing traveler behavior.
Comparing Data Sources
howDifftSocsCaIdtify
GapsiCompiac
Though an integrated view o multiple
travel inormation sources is the best
practice, the reality o the state o
travel management today is that ew
companies have been able to reach
this loty goal. Despite a lack o true
integration, comparing dierent sources
o travel data can reveal important gaps,
which can aid in tailoring compliance
eorts. The list below contains a ew
examples o some o the more common
ways corporate travel managers
compare data sources:
Comparingreservationdata(self-
booking or call center) with expense
data to measure leakage outside the
TMC or CBT.
Comparingreservationdata(CBT
or call center) with expense data to
isolate changes made ater the ticket
was issued or example, travelers
who use their corporate credit card
to upgrade at the airport.
Best Practices in Business Intelligence
Though an integrated viewo multiple travel inormation
sources is the best practice,
the reality o the state o
travel management today
is that ew companies have
been able to reach this
loty goal.
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ComparingTMCsegmentdetailwithsupplier reports to understand gaps
in contract perormance.
Comparingthehotelexpenses
charged on corporate cards against
the amount o hotels booked through
CBTs or call center agents to identiy
leakage and potential noncompliant
bookings.
Comparingexpensetotalsby
corporate divisions to TMC
divisional totals to understandthe mix o whats ticketed versus
expensed by company groups.
Figure 13 depicts the ideal travelinormation system environment. Inputs
are received rom booked, ticketed and
post-trip sources. Inormation is then stored
in a data warehouse. This data warehouse
may be in-house at the corporation or
outsourced to the TMC or a third party.
At this point, travel inormation should be
integrated with corporate systems. The
travel inormation is accessed through
BI sotware, which generates reports and
powers a BI dashboard. As inormation
is analyzed, gaps in various sources areidentied and opportunities that need
to be brought back to the point o sale
are isolated.
Booked
GDS(booked)
CorporateBooking Tool
TravelAuthorization
Consumed
ExpenseReports
ChargeCard
Suppliers
Ticketed
GDS(ticketed)
TMCBack Office(reconciled)
Air Hotels
Cars Other
Inputs(see Figure 2) Outputs
A
D
B
C
CorporateSystem
Integration(see Figure 12)
Business Intelligence Solution Components
Travel DataWarehouse
Financial andTravel Analysis
BIDashboard
BISoftware
Reports
BI Dashboard
Drive traveler behavioral change
Identify source gaps
Figure 13
Ideal Travel Information Sstem Design
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Incorporating Regional andCountry-Specifc Travel Data
On a global basis, many corporations nd
it challenging to integrate regional and
country-specic data i a single TMC is not
used either or global services or as the
aggregator or multiple TMCs. The best
practice in this area involves outsourcing
the activity to a single source. Most o the
large TMCs and a number o third-party
providers oer global data aggregation as a
service. Cultural dierences do impact the
ability to extract relevant inormation rom
international sources. For example, some
cultures have not embraced charge cards
and thus consolidation through a single
orm o payment is not practical. Travel
agencies in certain parts o the world do
not use automation or accounting and
thereore, they lack the ability to provide
a robust data eed. Many companies all
into the category o micro-multinational,
meaning that their international oces are
mostly small with limited volumes. In
these cases, best practices used by large
multinationals dont necessarily apply.
Adopting a common reservation platorm
can help mitigate the challenge o
micro-multinationals, as eeds can be
extracted rom the GDS.
The Role o Benchmarking in the TravelManagement Process
Benchmarking travel practices against like
companies has become more common.
TMCs, third parties and trade organizations
oer benchmarking services, which can
be useul in optimizing contracts and
communicating to senior management the
relative success or ailure o the companys
travel management program, especially
rom a competitive viewpoint.
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How Actionable Data is DerivedActionable data reers to inormation
that points to specic activities that can
yield a measurable cost savings. Oten,
these opportunities are uncovered when
analyzing the travel inormation and
comparing dierent sources o data. A
simple example is the discovery o high
travel volume to a hotel or city where
there are no negotiated hotel rates.
Complex actions that require behavioral
changes on the part o travelers are more
dicult to implement. For example, many
companies try to increase the number
o days travel is booked prior to the trip
(e.g., advance purchase behavior) but nd
implementing this change to be dicult.
Implementation o such a behavioral
change must happen at the point o sale,
whether travel is sel-booked or arranged
through a call center agent.
How Actionable Travel Intelligence
Impacts Compliance, Vendor
Negotiations and Policy Management
Travel policy should be thought o as
a fuid process, where adjustments to
the policy are made (e.g., switch rom
business to coach class or international
travel) based on changing market
dynamics. Without the constant monitoring
o travel inormation systems, compliance
cannot be increased and ultimately
leverage will be lost when renegotiating
contracts with preerred suppliers.
Successfulimplementationof
actionable travel intelligence oten
requires a multi-departmental approach.
For example, one travel manager at a
major consumer products company
works in the administrative services
department and reports to the CFO,
but partners closely with security and
procurement. This proved an eectivestrategy, as corporate procurement
assumed the lead in TMC selection
or India and Asia/Pacic, with the
travel manager acting as the subject
matter expert to help procurement
understand the nuances o travel in
emerging markets.
Seniormanagementsupportisanother
critical success actor in implementing
actionable recommendations. In the
case o the consumer products company
above, the travel manager was able to
document the number o reservations
where hotels were not booked through
either the CBT or the call center. Using
this intelligence, the travel manager was
able to encourage a senior executive to
send out an email requiring employees
to book a hotel at the same time they
booked their air reservations.
Anothercommonbestpracticeused
by this corporate travel manager
involved the use o what i scenariosto demonstrate how changes in travel
policy can impact the corporate bottom
line. The travel manager instructed the
TMC to calculate the potential impact
o eliminating rst-class travel world-
wide and the associated savings. The
analysis showed that 50% o travel
expenses were being incurred by only
15% o the travelers primarily senior
executives fying rst class.
Moving from Data to Information to Action
Without the constantmonitoring o travel
inormation systems,
compliance cannot be
increased and ultimately
leverage will be lost when
renegotiating contracts
with preerred suppliers.
Another common best
practice involved the use
o what i scenarios to
demonstrate how changes
in travel policy can impact
the corporate bottom line.
The analysis showed that
50% o travel expenses
were being incurred by
only 15% o the travelers
primarily senior executives
lying irst class.
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The ollowing descriptions were derivedrom conversations with travel managers
as part o research or this white paper.
Top-Down Approach to
Travel Compliance
A global commodity manager or a large
nancial services rm was summoned
to the CEOs oce to discuss a particular
policy issue. The manager answered the
CEOs immediate question and then took
the opportunity to discuss the dierences
in compliance (and thus savings) across
the CEOs major direct reports. The
manager then created a dashboard by
extracting inormation rom both the
TMC database and the companys GL,
highlighting the lost savings and
dierences in average ticket and hotel
costs across each division. This proved
to be an eye-opening experience or the
CEO, who then instructed the commodity
manager to create a similar dashboard or
each o his direct reports, refecting lost
savings across their division. The meeting
with the CEO allowed the commodity
manager to enlist nancial analysts
support to drive more savings across
all divisions.
Focusing on service, the global commoditymanager created a nancial incentive or
the TMC to improve key perormance
metrics (KPMs), such as online booking
adoption, traveler satisaction and
number o errors. The TMC was nancially
penalized i the KPM was not achieved.
CBT adoption increased rom a low o
42% to a high o 80% by providing an
incentive to the TMC to encourage
sel-booking. This incentive was also
responsible or a lower average hotel
rate, as TMC call center agents becamesalespeople oering the lower rates at
adjacent preerred hotel properties.
Driving Down TMC Transaction and
Core Supplier Costs
A global travel manager at a large
proessional services rm instructed its
TMC representative to create a report
that highlighted, by division, the nancial
impact o low adoption o the corporate
CBT. By publishing these reports across the
enterprise, a natural sense o competition
was created, driving adoption o the CBT to
nearly 80% rom a low o 25%. This directly
translated into savings to each divisions
bottom line as call center reservations were
converted to online touchless transactions.
Additional Success Stories
A global travel manager ata large proessional services
irm instructed its TMC
representative to create
a report that highlighted,
by division, the inancial
impact o low adoption
o the corporate CBT. By
publishing these reports
across the enterprise, a
natural sense o competition
was created, driving adoption
o the CBT to nearly 80% rom
a low o 25%. This directly
translated into savings to
each divisions bottom line
as call center reservations
were converted to online
touchless transactions.
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Using the Right Type o Data or theRight Purpose
The director o travel services or a large
consumer products company accesses
six sources o data to manage its travel
program charge cards, TMC, supplier
data, sel-booking statistics, electronic
expense reporting, and the corporate GL.
Which source o data is used depends on
the particular goal behind the query. For
example, charge card inormation provides
the oundation to measure overall spend
and leakage due to noncompliance
(e.g., not using the preerred TMC or
suppliers). The charge card inormation
is comprehensive, but does not include
cash outlays or enough supplier and
department-level detail or vendor
negotiations. TMC data, on the other
hand, does contain robust inormation
on supplier usage and is essential
or compliance tracking and vendor
negotiations, but represents only ticketed
data, not consumed inormation (e.g.,
fights fown, hotel rooms used, cars
rented). Supplier reporting is used to
measure contract perormance. To make
this measurement, supplier inormation is
contrasted with other data sources or
example, TMC, charge cards and expense
reports to veriy or dispute supplier
contract usage. Sel-booking statistics
help monitor online adoption and trends.
As an example, the director used thesesources o inormation to expose the need
or global consolidation. Working with the
companys procurement department, she
demonstrated how the lack o control in
non-U.S. locations (EMEA, APAC) was
costing the company money. She was
then able to persuade senior executives to
improve international travel management
practices by enorcing the use o a single
charge card and by consolidating travel
volume with a limited number o
TMCs driven by an RFP process. Thisdemonstrated the importance o
unneling inormation into a limited
number o sources to increase visibility o
compliance and drive additional savings.
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Developing a Data Aggregation andImplementation Strategy
The degree o diculty in creating
and implementing a successul data
integration strategy depends greatly
on the specic stage o development o
the travel management program. Best
practices have long recommended
a single global orm o payment,
consolidation with a single TMC or
consortium and online bookings or a
majority o reservations. Without these
three elements, creating an eective data
aggregation strategy can be challenging,
but the reality o the marketplace is that
many companies have not achieved this
loty goal. Corporate travel buyers need
to rely on their TMCs and technology
providers to assist with this eort. Larger
TMCs can consolidate global inormation
rom other TMC companies. GDS and
third-party technology providers oer
solutions to consolidate multiple TMCs
and charge card inormation. Expense
management vendors can help integrate
other sources o data into a single data
warehouse.
Achieving Best Practices inTravel Business Intelligence
Page 27 provides a summary o
travel management goals and specic
actions suggested (see Figure 14).
Delivering Corporate Value through
Eective Travel Data Management
Best practice travel managers not only
enlist the support o senior management,
but also work on an ongoing basis to
promote compliance throughout theenterprise. A clear best practice
technique is to measure perormance
across divisions, allowing the
competitive nature o business to
drive greater compliance. Translating
travel management savings into
standard corporate measurements,
such as cost o sales or earnings per
share, helps position travel management
objectives within the core goals o the
company. Eective travel management
can positively impact the corporatebottom line, and inormation is critical
to achieving sustainable value or
the program.
Summar and Recommendations
A clear best practicetechnique is to measure
perormance across
divisions, allowing the
competitive nature o
business to drive greater
compliance.
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Figure 14
GOAl SuGGeSTeDACTIOn
Gobacosoidatio
Given the act that many smaller
multinationals may not be able to
consolidate globally with a single TMC
or charge card, travel management
inormation can still play an essential
role in reducing corporate T&E
expenses on a global basis.
ConsiderusingacommonGDSreservationplatformforallinter-
national oces in order to collect inormation on a global basis.
Identifyopportunitiesforconsolidationwithinindividual
countries or across geographic regions or example, selecting
a single TMC or India rather than using multiple TMCs within
the country. I European oces are too small or a country-wide
consolidation, consider a pan-European approach.
ConsolidatewithasingleCBTonaglobalbasis,standardizingthe
online reservation process and gaining insight into regional travel
compliance and practices.
Developrelationshipswithnanceexecutivesresponsible
or international oces to understand their requirements
and practices.
DeveloprelationshipswithexistingTMCswhosupportsmall
international oces and ask or reports on travel expenditures
in any orm available.
Proactive travel management
Find ways to identiy policy
noncompliance and negotiation
opportunities prior to expensebeing incurred.
MaximizetheuseofCBTbyusingdynamicmessagingtochange
traveler behavior based on near-term supplier perormance goals.
Usetravelbusinessintelligencetogoafterlow-hangingfruit.
This includes identiying PNRs booked without hotel reservations,advance purchase patterns and class o service usage.
Improve travel polic compliance Comparedivisionalperformanceandgeneratestrategic
support rom key senior management or noncompliant
divisions and locations.
IdentifyTMCleakagebycomparingexpenseorchargecard
inormation with GDS data delivered by the TMC. Demonstrate
how leakage impacts the divisions bottom line.
Wokwititastakods Acommonactivityacrossallofthecompanyslocationsis
budgeting. Work with corporate nance by identiying specic
areas o lost savings due to noncompliance. Provide insight intoexpense trends to help the budgeting process, even or oces
not currently under the managed travel program.
Becomefamiliarwithinternalcorporatenancialsystemsto
understand how T&E expenses are derived. Work with corporate
nance to assist in measurement with respect to T&E or all
locations worldwide.
AigwitItaStakods