It’s been previously stated here at CPO Rising that the business travel category has been on both a budgetary and strategic rise over the past half-decade; as more and more enterprises rely on business travel to foster customer relationships, spark new business development and maintain core supplier unions, it becomes critical for the average enterprise to develop a travel and expense management program that can not only drive true business value, but also efficiency as well.
As these programs begin to gain steam and penetrate the furthest regions of the travel category across the greater organization, enterprises will rely on tactical competencies, strategic capabilities, and specific technology solutions to effectively manage corporate business travel. A critical aspect of the contemporary travel and expense management program is performance measurement. However, the traditional sense of performance measurement must be enhanced to include newer metrics that reflect the true worth of travel and expense management.
With that said, CPO Rising is excited to highlight three travel and expense management metrics that “matter” as enterprises deepen their programs:
- ROI of business travel by function. Every enterprise realizes that business travel is an accepted component of running a contemporary organization. Thus, there’s no reason why the finance team (or other unit) cannot conduct an ROI analysis on business travel by function. Did the sales team close a deal as a direct result of an expensive trip? How effective is business travel on overall revenue growth? Has the IT improved its processes by attending specific conferences? It’s critical that this new notion of “business travel ROI” gives finance leaders a clear picture into the value of travel across specific business units.
- Business travel spend under management. Taking a cue from procurement’s classic “spend under management” performance measurement, the group responsible for managing corporate business travel should fully-understand the level of spend control that is currently applied to the business travel category. What is the percentage of business travel spend that is actively managed by procurement or finance, and can be accounted for in fiscal planning / budgeting and forecasting? While this metric may not be an overnight addition to other traditional travel / expense management metrics (like the cost to process an expense report or total policy compliance), it is a metric that all enterprises should strive to measure in managing this complex spend category.
- Percentage of expenses that are processed “straight-through.” CFOs and other finance executives proclaim straight-through processing on the invoice side as a goal to strive for within the world of accounts payable. The caveat on the expense management side is that in order for expenses to be processed, approved, and scheduled for payment without human intervention, an enterprise must automate all phases of the expense management process, which translates into automated expense creation and submission, automated approval, and automated scheduling and reimbursement. The sooner these phases are automated, the better rate of straight-through expense-processing.