Tips for Significantly Reducing Firm Travel Costs

Transcription

1 Tips for Significantly Reducing Firm Travel Costs Panelists: Stephen G. Dempsey, CLM R.J. Filipski Patrick E. Guilfoyle Scott Jordan Moderator: Michael Steiner FM23 4/4/ :15 AM - 11:15 AM The handouts and presentations attached are copyright and trademark protected and provided for individual use only.

2 Tips for Significantly Reducing Firm Travel Costs Today s Panel Stephen Dempsey Director of Administration, Dallas, Houston and D.C. R.J. Filipski Vice President, Business Development Patrick E. Guilfoyle Support Services Assistant Director Scott Jordan Director of New York Sales Michael Steiner Executive Vice President 1

3 Opportunity Business travel is typically 2-3 rd largest indirect law firm expense Up to 60% non-billable It s controllable! Well-managed programs save 10-45% Source GBTA The Industry is Unpredictable Your guide to the new basic economy airfares Hidden travel fees and how to avoid them Airlines Hit Record Load Factor in 2016 Hotel industry: 2017 could be year corporate travel bounces back 2

4 Best Practices Consolidate Build preferred supplier partnerships & rates Shift bookings online Automate expense management Focus on safety & security Tip 1: Consolidate Require use of designated travel management company for consolidation Establish guidelines and policies Much easier to manage spend, risk and compliance 3

5 Tip 2: Preferred Suppliers - Air Optimize savings on air travel Focus on key routes and classes of service Point of sale discount vs. rewards programs Tip 3: Preferred Suppliers - Hotel Focus on top destinations/offices Most properties require nights annually Tap into TMC negotiated rates 4

6 Tip 4: Shift Bookings to the Cloud Online Booking Transaction fees 65-75% lower Optimized for policy compliance and savings Capture spending wherever & whenever it happens Modernize and increase the relevance of your travel program Proactively engage & service travelers midtrip Tip 5: Integrate Expense Insight and control over all firm travel expenses Saves time & increases accuracy of billbacks Booked vs. billed comparisons Acquire trusted e-receipts directly from suppliers Go Mobile Receipts, Mileage, Payments, Approvals 5

7 Duty of Care Manage risk Safeguard your firm s most important asset Choose a manager Consolidate Obtain data for reporting Incorporate full location data virtual office, mid-trip locations (ie. card swipes) Monitor and communicate Thank you Q&A 6

8 Your opinion matters! Please take a moment now to evaluate this session.

9 LAW FIRM QUARTERLY BUSINESS TRAVEL INDEX* FEBRUARY 2017 Each quarter, Lawyers Travel takes a look back at select legacy law firm clients quarter-over-quarter travel patterns. This high-level analysis allows us to identify trends and to benchmark individual law firm client activity against a yardstick representing over $180 million in annual law firm air and hotel spend. Both the average domestic ticket price paid ($470) and international ticket price paid ($2,965) decreased in 2016, while the overall average ticket price paid increased ($754 in 2016; $709 in 2016). Look to the growing percentage of international trips booked in 2016 (11.4%) to explain the increase in the overall average price paid, despite both domestic and international averages decreasing. As for booking class specifics, while the percentage of First Class bookings (10.2%) decreased minutely, law firms booked Business Class 17.0% of the time in 2016, a notable increase over previous quarters where Business Class bookings have been hovering at or below 15%. In fact, 2016 saw the lowest percentage of Economy Class tickets purchased since On the hotel side, both the average domestic and international prices paid by law firms increased slightly. Hotel prices paid by law firms have been steadily creeping up since Michael Steiner Executive Vice President Lawyers Travel *Data culled from cross-sample of law firm clients, representing over $180,000,000 in annual air and hotel spend. Lawyers Travel recently adjusted the means by which First and Business class upgrade data is reported and Index class of service data has been adjusted retroactively.

10 AVERAGE PRICE PAID 2013 TO 2016 $3,313 $3,212 $3,246 $3,043 $3,210 $2,970 $2,897 $2,944 $2,879 $3,009 $3,086 $2,965 AIR FARE $819 $871 $793 $800 $794 $778 $732 $758 $719 $761 $709 $754 $533 $562 $542 $536 $518 $523 $508 $493 $492 $500 $476 $470 14' 14' 14' 14' 15' 15' 15' 15' 16' 16' 16' 16' International Overall Domestic $400 $403 $387 HOTEL $287 $269 $307 $289 $296 $282 $370 $303 $292 $351 $288 $278 $371 $316 $307 $355 $351 $309 $310 $302 $303 $337 $297 $290 $354 $356 $318 $316 $311 $310 $369 $324 $316 14' 14' 14' 14' 15' 15' 15' 15' 16' 16' 16' 16' International Overall Domestic LAWYERS TRAVEL LAW FIRM QUARTERLY BUSINESS TRAVEL INDEX FEBRUARY 2017

11 TRAVEL PATTERNS 2014 TO % 11.7% 9.3% 10.5% 10.3% 10.4% 9.4% 10.8% 9.5% 10.4% 9.1% 11.4% 89.7% 88.3% 90.7% 89.5% 89.7% 89.6% 90.6% 89.2% 90.5% 89.6% 90.9% 88.6% Domestic International 9.3% 10.9% 10.2% 11.3% 10.3% 10.8% 10.3% 12.1% 11.1% 10.8% 10.3% 10.2% 13.9% 14.6% 14.1% 13.5% 13.5% 14.5% 13.7% 14.9% 15.0% 14.5% 12.9% 17.0% 76.8% 74.5% 75.7% 75.2% 76.2% 74.7% 76.0% 73.0% 73.9% 74.7% 76.8% 72.8% Economy Business Class First Class LAWYERS TRAVEL LAW FIRM QUARTERLY BUSINESS TRAVEL INDEX FEBRUARY 2017

12 A Forrester Consulting Thought Leadership Paper Spotlight Commissioned By Concur December 2016 SMBs Drive Growth And Innovation When They Embrace The Full Power Of T&E Solutions

13 Table Of Contents Introduction... 1 T&E Process Efficiency Is A Primary Challenge For SMBs... 1 SMBs Focus On Improving T&E Processes... 2 Picking The Right T&E Solution... 2 What Improved T&E Solutions Mean For SMBs... 4 Key Recommendations... 5 ABOUT FORRESTER CONSULTING Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. Ranging in scope from a short strategy session to custom projects, Forrester s Consulting services connect you directly with research analysts who apply expert insight to your specific business challenges. For more information, visit forrester.com/consulting. 2016, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to [1-11G3RQ7] Project Director: Chris Taylor, Market Impact Consultant Contributing Research: Forrester's Application Development and Delivery research group

14 1 Introduction Managing employee-generated travel expenses can be a challenge for many businesses. For small and medium-size businesses (SMBs), the challenge is not as much about tracking a high volume of expenses as it is finding the right tools and processes that will enable employees to be as productive and efficient as possible. This is a key challenge for financial leaders at SMB organizations as they make decisions about new technology investments and their effect on the business as a whole. In April 2016, Concur commissioned Forrester Consulting to explore current activities and challenges around travel and expenses (T&E) for SMBs and evaluate how financial leaders in these organizations are responding to these challenges, from both a financial and strategic business perspective. To support this research, Forrester surveyed 247 financial decision-makers from SMB organizations in the US, Canada, the UK, France, Germany, China, Japan, India, Australia/New Zealand, and Mexico. T&E Process Efficiency Is A Primary Challenge For SMBs Digital technology has enabled consumers to make purchases and engage with businesses in new ways in their daily lives. Many consumers now expect the same level of digital capabilities and convenience from the T&E solutions and policies in their workplace. Spurred by these advancements in digital technology, changes in employees spending preferences have put greater pressure on SMB organizations to enable more effective T&E processes. Due to their smaller headcount, SMB organizations see fewer challenges regarding business silos or control issues. However, they see greater challenges with T&E processes (see Figure 1), including: A high number of inaccuracies caused by the human element of paper-based processes. A lack of digital capabilities or automation increases the chance for human error in the T&E process. Large time requirements for paperwork and approval. Time is precious to employees, especially within small organizations where they are required to wear many hats. A lack of streamlined processes forces employees to spend extra time managing expenses, which is valuable time that could be spent elsewhere. A lack of mobile connectivity. Companies need to embrace the technology that employees are using in their everyday lives (i.e., smartphones and tablets) in order to make T&E processes more accessible and convenient. This is especially important as employees are traveling and don t have immediate access to office resources. FINANCIAL LEADERS NEED AN EASIER WAY TO MANAGE EXPENSES Financial leaders in SMB organizations are very aware of the current challenges and concerns with T&E solutions. In fact, managing expenses was the single most challenging responsibility cited by financial decision-makers in our survey, with 56% of respondents identifying it among their top three challenges (see Figure 2). However, as mentioned earlier, financial leaders within these organizations often carry more strategic responsibility overall. This means they must distribute their time to an increasing number of FIGURE 1 Key T&E Challenges Focus On User-Induced Errors And Long Time Requirements Key challenges Lack of visibility and control Business expenses being tracked through siloed systems High number of inaccuracies caused by the human elements Large time requirements for paperwork and approvals Lack of mobile connectivity Small (1-499) 27% 28% 31% 36% 29% Medium ( ) 30% 21% 37% 33% 32% Base: 247 global financial decision-makers from SMB organizations Source: A commissioned study conducted by Forrester Consulting on behalf of Concur, April 2016

15 2 FIGURE 2 Expense Management Is A Top Challenge For Financial Leaders FIGURE 3 SMB And Enterprise Organizations Value Different Benefits Of T&E Solutions Which of the following financial tasks or responsibilities are the most challenging for your business to manage? (Percentage ranked as top three challenge) Managing expenses/ cash flow Managing risk Analyzing pricing/ financial analysis Promoting revenue growth Increasing employee productivity and satisfaction 39% Base: 247 global financial decision-makers from SMB companies Source: A commissioned study conducted by Forrester Consulting on behalf of Concur, April 2016 business priorities and have less time to manage finances only, specifically expenses. With limited bandwidth, SMB financial leaders recognize the need to improve the overall T&E process in order to enable employees to track expenses more efficiently. These process improvements will give employees more confidence and reduce their frustration in tracking expenses, which creates a win-win situation for both employees and financial leaders. SMBs Focus On Improving T&E Processes 50% 47% 46% We found that as financial leaders look to address the challenges with their current T&E processes, SMB companies have a different primary focus than enterprise-size organizations. The survey results highlighted two areas of significant difference based on company size (see Figure 3): SMBs view improved process efficiency as the No. 1 benefit of T&E solutions. Enterprise organizations see more accurate reporting through data consolidation as the top benefit of T&E solutions. 56% SMB organizations are intently focused on making T&E processes as seamless as possible and are less concerned What do you consider to be the most important benefits of your current T&E solutions? Improved process efficiency and faster reimbursement cycles More accurate reporting through data consolidation and analytics for real-time expense tracking SMB Enterprise 36% 40% 50% Base: 247 SMB and 253 enterprise financial decision-makers (global) Source: A commissioned study conducted by Forrester Consulting on behalf of Concur, April 2016 initially with better data consolidation. SMB organizations have far fewer employees to manage or business departments to reconcile, so it makes sense that their attention is focused on process improvements to eliminate inefficiencies of paperbased processes. As a result, 67% of SMBs surveyed are in the process of updating or are planning to update their T&E system within the next six months. Picking The Right T&E Solution 51% Knowing that companies are looking to invest in new T&E solutions, we asked them about the importance of two primary facets of these solutions: 1) user friendliness and 2) business readiness, or the ability to easily integrate into existing business infrastructure and processes. For SMB organizations, user friendliness was the top priority at 41%. However, it was closely followed by 37% of respondents who said it was equally important to be user friendly and business ready (see Figure 4). Balancing user friendliness and business readiness is important when considering T&E solutions. As one interviewed CFO explained: It has to be a mix of several factors. No single factor is big enough to bring strategic change in the organization. If you could eliminate the paperwork, get everything online or cloud based, get departmentalized statistics, and drive compliance, then any organization would be tempted to look into the adoptability of the new [T&E] solution/technology. This highlights that while SMBs are primarily focused on improving the process for users, the technology behind

16 3 these new processes must also integrate well with existing business ecosystems. If you could eliminate the paperwork, get everything online or cloud based, get departmentalized statistics, and drive compliance, then any organization would be tempted to look into the adoptability of the new [T&E] solution/technology. CFO, international mining company FIGURE 4 T&E Solutions Must First Be User Friendly When making financial decisions regarding T&E investments, what attribute do you feel is most important? New/updated systems are user friendly Both equally important 41% 37% app is considered the most effective way to get employees to comply with T&E policies, with 75% of SMBs rating it as effective or very effective. Commented one CFO: One thing that could really use a boost is our online capabilities. It would be great if we can log in to some application and directly book the travel and lodging at the approved accommodations and flights... Giving users mobile T&E support allows them to capture expenses and receipts in real time within the application and stay connected to corporate travel services as trips evolve. The ability to manage T&E and invoicing from a single solution. Financial leaders and employees alike can benefit from consolidated solutions and applications, and 65% of SMBs consider a single solution to be an effective way to promote better T&E compliance among employees. Commented one VP: We need more control. Getting more granular in our control is what is driving [new investments]. By providing more control via a single system and mobile application for managing both expenses and invoices, organizations can introduce more automation, enable greater insight into employee spending, and foster better T&E compliance. Faster reimbursement cycles. Employees will be more likely to follow policies and guidelines if they know the company will reimburse them quickly. Seventy-three percent of SMB respondents considered this to be an effective capability for maintaining T&E compliance. New/updated systems are business ready 22% Base: 247 global financial decision-makers from SMB companies Source: A commissioned study conducted by Forrester Consulting on behalf of Concur, April 2016 MAKING T&E SOLUTIONS USER FRIENDLY Modern financial leaders know that new T&E investments cannot just be financially driven. Without the support and buy-in from employees to follow new processes and use new tools, new investments will do nothing to ease the burden of managing T&E. We asked our survey respondents what capabilities and features of T&E solutions they consider to be most effective at enabling employees to better comply with T&E policies. The top capabilities were: A mobile app connected to the T&E system. The ability to connect with a company s T&E system via a mobile MAKING T&E SOLUTIONS READY FOR BUSINESSES Part of making a solution business friendly is to ensure it can quickly and seamlessly integrate with legacy systems for HR and finance so it can deploy and scale quickly. Approximately 77% of the SMB companies surveyed are currently using or planning to use cloud apps that can provide faster deployment for a number of systems, including finance, T&E, and accounts payable. SMBs lag slightly behind enterprises in cloud adoption, which highlights a key opportunity for new T&E investments in this area. Other key features and benefits of improved T&E solutions that are most important to SMBs include: Accurate reporting through data consolidation and analytics. Improved T&E solutions must integrate data from across the organization to create a more accurate view of spending. With data and reporting being such an important part of T&E solutions, we asked survey respondents to rank the importance of certain attributes of

17 4 their data: accuracy, consolidation, up to date (current), comprehensive, and easy to interpret. The top-ranked priority was accurate data (35%), followed by consolidated data (28%). In many cases, the accuracy of the data will be based on having visibility into all types of spending across the business, for which data consolidation plays a vital role. Improved visibility into and access to data. As process improvements make data more accurate, financial leaders must be able to get that data at any time, so they can guide their financial decisions with a clear view of spending. Timely access to this data is important as well, as sometimes reports are needed mid-month in order to help inform decisions. Many companies are able to collect the data they need, but they lack direct access to or management of the data. Therefore, it is difficult for them to get the data when and where they need it. This was a primary issue for one VP of enterprise systems for a business technology vendor, who said: For us, we can get whatever data we need; it's just that we need someone else to do it for us, which is not ideal. We usually see the data at month-end. More direct access to data is critical for helping inform financial leaders. What Improved T&E Solutions Mean For SMBs Modern financial leaders know that improving T&E systems is not just about gaining better control of costs and saving money. In fact, it is the combination of various benefits (e.g., user friendliness, data consolidation) that ultimately drives strategic change and improvement. For SMB organizations, the top expected benefits of T&E investments are (see Figure 5): Reduce time spent on expenses. Less time spent on expenses means more time spent on core business functions. This productivity gain is considered by SMBs to be the top benefit of improved T&E solutions, as cited by 38% of respondents. Improved productivity can drive higher employee satisfaction which was identified as a top benefit by 34% of SMBs as it enables employees to focus more on their day-to-day responsibilities and less on rote administrative tasks. FIGURE 5 T&E Improvements Carry Productivity And Cost Benefits What are the top businesses benefits your business has achieved or anticipates achieving through use of improved T&E solutions? Reduced time spent on expenses to enable productivity in other areas Reduced overall spending on employee related expenses Fewer complications and reduced number of errors with expense submissions/balances Reduced invoice processing time and reimbursement turnaround time Improved employee productivity and satisfaction Base: 247 global financial decision-makers from SMB companies 37% 36% 36% 34% 38% Source: A commissioned study conducted by Forrester Consulting on behalf of Concur, April 2016 Reduce overall spending. Thirty-seven percent of SMBs surveyed expect to see an overall reduction in employeerelated expenses as a result of employees being given the proper T&E tools. Seventy-three percent of respondents agreed that through the use of improved expense tracking tools, they can proactively identify issues for employees and eliminate problems before they occur, saving both time and money. As such, 51% cited cost savings as a primary driver for new T&E investments. Experience fewer complications and errors. Better tools and processes can help employees submit expenses with great ease and accuracy, which will result in less overall time needed from financial leaders to reconcile submissions and balances. Fewer complications will also enable faster processing time to allow reimbursement to happen more quickly.

18 5 Key Recommendations Modernizing T&E processes through new technology solutions helps financial leaders achieve greater leverage and control over corporate travel expenditures, while enabling their employees with a better experience to manage travel needs and report expenses quickly and efficiently. Based on our research involving SMB financial decision-makers, we offer the following recommendations: Improve process efficiency and reduce cycle time on expense reporting. Neither finance nor traveling employees want to spend any more time than necessary on expense reporting or invoice approvals. Use a modern T&E solution to automate data collection, report processing, approvals, and reimbursement. Actively involve employees in expense management. Digitally native employees will be receptive to a T&E solution that has a consumer-grade user and mobile experience. Leverage this technology to enable them to book travel easily, record expenses with minimal effort, and get reimbursed quickly. Enlist the involvement of employees to make wise travel decisions that reflect corporate policy, while enabling them to make business travel a positive experience. Achieve cost savings with cloud-based T&E. Digital technologies optimize expense management. Cloudbased T&E systems connect to financial systems, suppliers, and third-party solutions for a seamless flow of data. Drive greater T&E compliance by guiding the employee through the T&E process to make the right decisions (before, during, and after spend occurs). Demand more from your data. Utilize the reporting and analytics capabilities of modern T&E systems to monitor expense patterns and help drive ongoing improvements of T&E practices. Explore opportunities for expanding analytics capabilities to more fully understand not just what is being spent, but where it is being spent, how it is being spent, and by whom. Understanding these metrics will allow you to make investments that are both financial and strategic while gaining the trust and support of employees.