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Effective travel management requires an organization to have visibility into their spend, an approval process to direct and sometimes to restrict spending, rate optimization and required documentation to track and manage the safety of employees. While most organizations use travel agents to manage travel, the value derived from their travel program differs. According to American Express, travel and entertainment typically represents the second largest controllable expense for corporations. Tools to maximize the value from travel include consolidation, leverage, benchmarking and demand management.
Best in class travel management programs balance the business need for travel and employee morale with cost management to deliver shareholder value. Since travel affects the majority of employees in a company and nearly 100% of senior leadership, this category can become fraught with political tradeoffs and external influence into the sourcing process. Everyone agrees that there is a difference between Best Western and Hyatt as well as a coach flight with 3 connections compared to business class direct. What everyone has difficulty agreeing to is the value of one option to another.
The responsibility for managing travel is increasingly coming under the domain of procurement. The ability of a procurement organization to perform a spend analysis, benchmark rates, audit fees, set service levels and leverage volume can yield savings of 50% compared to unmanaged travel.
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