Corporate travel is a major spend category for the enterprise. The U.S. Travel Association recently estimated that U.S. businesses spent more than $307 billion on business travel in 2016. It’s a necessary, and often beneficial expense, however, with the U.S. Travel Association also calculating that for every dollar a company spent on travel, that business saw a $9.50 increase in revenue and $2.90 in new profits.
Analyzing the dollars and cents associated with business trips is now a fundamental part of an organization’s travel and expense (T&E) strategy to ensure that it can squeeze every penny in added revenues and profits out of each trip. The migration to digital corporate travel, expense management and payments technologies means businesses now have access to loads of data they need to adequately analyze their spend too.
It’s not an easy feat, however. Last September, corporate travel technology firm Amadeus published new research of business travel spend, finding that 80 percent of survey respondents said they don’t have access to enough T&E spend data to make more strategic decisions on the matter.
Yet as more FinTechs and solution providers step in to enable that data analytics capability, executives continue to emphasize the potential in T&E spend analysis — and not just to guide an organization’s travel policies. Amadeus’ report also found that C-level executives see the T&E segment as an area that can help achieve corporation-wide goals.
Lexi Honohan, senior director of Intelligence & Analytics at business travel consulting firm Advito, says organizations can go far beyond analyzing business travel spend with the T&E data they have at hand — if they can overcome some tall hurdles, however.
Travel Spend Data Reaches Out
“For years, we’ve been talking about putting together agency payment and expense data,” she said in a recent interview with PYMNTS. “You have the travel team and travel manager, and the goal is to put together agency payment and expense data. But not every travel manager understands why they’re putting this data together, or the value they can gain out of it. They may not understand the basic concepts of how to put it together, or the basic insights they can gain.”
Service providers can connect those dots for the enterprise and their travel teams. But Honohan said today, organizations have to go beyond the T&E segment with their travel spend data and apply more sophisticated analytics capabilities to drive overall enterprise growth.
“Some travel managers may understand basic insights, but not what can be found when you take it a couple of steps further — taking travel data and aligning it with other areas of the organization,” the executive explained. “Or taking core travel data and building a data strategy within the organization to align with larger corporate initiatives.”
Travel spend data extends its reach beyond an employee’s expense report, Honohan noted.
Take sales, for example. If a member of the sales team makes 10 one-day business trips a month to meet with clients, then analyzing that employee’s travel spend isn’t just a way to strategize how a company can optimize T&E costs — it offers an avenue to assess how efficient your sales strategy is.
“There is an indirect link between travel and sales,” Honohan said. “You can link travel data with sales data — a CRM [customer relationship management] tool, which is linked to your calendar — to see data from individual client appointments. And you can see where you’re able to consolidate.”
Aggregating not just business trip data, but also sales and client data, means an organization may be able to identify which trips can be consolidated into a single day, or a single, multi-day trip, leading to bottom line savings (and a reduced carbon footprint, the executive added).
In another example, Honohan explained that travel spend data can be collected from a range of payment rails and finance departments — including accounts payable, commercial card accounts, procurement and meeting cards, personal employee spend recorded in expense management platforms and more. Assessing data across these channels at the same time could help a company identify how to consolidate spend on a single card to maximize access to rewards and rebates or reduce late payments or make card bill payments and employee reimbursements more efficient by establishing automatic payments instead of disbursing a check.
“By bringing all of this data in, having that transparency and visibility, and consolidating and integrating data, there are significant savings to an organization,” the executive said. “You can see what’s being expensed, what’s going on individuals’ cards, what’s going into accounts payable that maybe should be going on a card.”
All of this analysis, she added, supports compliance and the reduction of operational risk as well.
Understanding the potential for corporate travel spend data analytics — not just to reduce travel spend but to achieve broader goals for the enterprise overall — presents a clear opportunity to strengthen the bottom line.
But having the capabilities to access and interconnect all of that data is among the largest challenges for financial executives, travel managers and analytics professionals.
Honohan cited research from CrowdFlower, which, in 2016, found that data scientists spend nearly 80 percent of their time collecting, cleansing and normalizing data — not actually analyzing it. She said that this takes away analysts’ ability to strategically assess corporate data and instead focus on manual data management that does not necessarily add value to an organization.
Advito brought Honohan onto its team to spearhead its new Intelligence & Analytics consulting practice, launched this week in a collaboration with business intelligence and analytics solutions provider Domo. According to Honohan, Domo’s cloud platform and suite of hundreds of APIs mean aggregating data across departments and platforms within the enterprise addresses many of the pain points analysts face. The executive explained the practice is always to arm corporate clients with the bandwidth and expertise they need — not only to analyze data and enhance travel spend strategies, but to also achieve broader organizational goals overall.
“We want to help clients interest in moving their data strategy and intelligence & analytics programs forward,” Honohan said. “And we want to allow analysts to focus on what they should be focusing on within the organization. They shouldn’t have to be worried about collecting data and cleansing it.”