Travel and Procurement: The Convergence

Travel and Procurement: The Convergence October 2007 Travel and Procurement: The Convergence Page 2

Executive Summary
It comes as no surprise that spend on the Travel and Entertainment (T&E) category is significant. With the globalization of business, virtual offices, and an overall rise in traveling employees, this category is increasingly becoming more complex. Given the rising strategic role that procurement is playing within enterprises, it is no surprise that they want a say in the management of this category and to have the opportunity to apply their expertise buying goods and services. This research study, conducted in September and October 2007, explores the strategies and performance capabilities of approximately 370 enterprises and how they purchase, contract, monitor, and manage T&E as a whole.
Best-in-Class Performance Two key performance metrics were used to distinguish Best-in-Class enterprises from Industry Average and Laggard organizations: (1) the amount of T&E spend under management, and (2) compliance rates to corporate travel policies. . On average, Best-in-Class enterprises have placed 87% of T&E spend under management and have an average compliance rate of 90% to corporate travel policies . Sixty-two percent (62%) of Best-in-Class enterprises measure key performance indicators relating to T&E monthly or more frequently . Seventy percent (70%) of the Best-in-Class use an expense management solution and 80% use an online booking tool
Competitive Maturity Assessment Survey results show that firms enjoying Best-in-Class performance shared several common characteristics: . The Best-in-Class achieved higher adoption rates with various technologies / services, including online booking adoption (70%) and corporate card adoption (85%) . Seventy-two percent (72%) of Best-in-Class enterprises currently measure service-level agreement (SLA) performance
Required Actions In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance enterprises must: . Institute a certain level of collaboration between travel and procurement . Initiate an Request for Proposal (RFP) process for appropriate categories within T&E or a combination of categories . Establish Service Level Agreements (SLAs) with travel management companies, travel suppliers, and technology providers . Improve T&E reporting and data analytics capabilities.© 2007 Aberdeen Group. Telephone: 617 723 7890 www.aberdeen.com Fax: 617 723 7897 Travel and Procurement: The Convergence Page 3
Table of Contents Executive Summary ...................................................................................................................2 Best-in-Class Performance .................................................................................................2 Competitive Maturity Assessment....................................................................................2 Required Actions..................................................................................................................2 Chapter One: Benchmarking the Best-in-Class...................................................................4 The Value of Collaboration...........................................................................................6 Maturity Class Framework .................................................................................................7 The Best-in-Class PACE Model.........................................................................................7 Source-to-Settle Cycle within T&E...................................................................................7 Service Level Agreements.............................................................................................9 Chapter Two: Benchmarking Requirements for Success............................................... 12 Competitive Assessment ................................................................................................. 13 Technology / Service Usage and Adoption .................................................................. 14 Sustainable Travel.............................................................................. [download for more]