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Best Practices in

Travel Business

Intelligence

By Norman L. RoseSponsored by:


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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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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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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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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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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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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


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.


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.



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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


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


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.


16/27



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


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.


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


22/27



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.


23/27



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.


24/27



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.


25/27



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.


26/27



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.


27/27


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

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