Business travel and its related costs have risen over the past half-decade, with enterprises reinstating the travel budgets at levels that are higher than they were pre-economic downturn. Of course, with this budgetary item becoming a prime complex spend category for procurement functions to focus their strategic prowess, it is critical for enterprises to ensure that their travel and expense management programs are founded on a series of tactical capabilities that, while not as glamorous as more strategic competencies, drive inherent value across the greater organization.
In fact, within complex spend categories, such as contingent labor, meetings / events, marketing materials / services, etc., it is the dual-based approach of both tactical and strategic capabilities that help drive not only success across the spend management front, but also help drive category-specific efficiencies (i.e., better management of independent contractor compliance, higher frequency of meetings executed on or below budget, etc.).
Ardent Partners has put together the three tactical capabilities that matter for any enterprise looking to better streamline their travel and expense management programs:
- Linkage between travel / expense management automation and P2P systems. The contemporary procure-to-pay process is one that is not only meant to drive cost-related efficiencies (via, of course, automation and elimination of manual- and paper-based tasks), but also drive visibility into enterprise cash. There is no better way to gain strong visibility into travel and expense-related spending than to link the two systems that hold the most (technological) responsibility for managing this complex spend category. Automated travel / expense management systems will hold valuable information regarding travel spending, while P2P automation can provide a deeper picture of its ramifications on cash management.
- Standardized approval workflow for all expenses. The approval process for travel and expense management holds two ramifications: employee satisfaction (“Why hasn’t my expense report been approved yet?”) and quicker-processing of expense reports. Roadblocks in the approval workflow can delay the expense management process and cause headaches for multiple stakeholders. Thus, it is imperative that enterprises institute standardized approval workflow processes across the greater organization by centralizing approvals and enforcing strict approval guidelines. Even the busiest of executives must contribute to this level of standardization.
- Collaborative development of corporate travel policies, standards, and guidelines. On the tactical side, compliance and cost / savings are the two main areas that require robust competencies from a programmatic standpoint. Collaboration (cross-functional coordination) is an ideal means of building deep travel policies that can cover even the most hidden compliance threats. In the modern enterprise, nearly every business function relies on business travel, and, with so many travelers on the budget, it is critical to develop and enforce corporate travel policies that address the caveats of each enterprise unit.
Some enterprises lose sight of tactical measures within their travel and expense management programs due to the fact that this category is and has been gaining more strategic ground within the greater organization (much like accounts payable). However, it is crucial to remember that most strategic capabilities are able to be executed because of the foundation of competencies that were built prior to these approaches.
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