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26 April 2017 , 10:09 am

Defining Total Cost of Travel – the key steps

Total Cost of Travel

Ask any corporate what the key drivers are in their travel procurement programme and they will tell you safety and costs. The latter is extremely difficult to get a handle on, made more complicated when you start evaluating what the Total Cost of Travel is.

By Total Cost of Travel, we don’t mean what the actual components of the travel cost, we mean all the elements that go in to that trip, including the time it takes to plan and book the trip, the time it takes to consolidate all the data from that trip. Even the costs associated with catering or printing documents for that trip.

The Holy Grail of data here appears to be key, with procurement managers globally recognising how difficult it is to reconcile all the booking channels, according to a recent Business Travel Online webinar, from Uber to conference facilities to TMC data. And then it’s not just how one consolidates that information. Important too is to leverage it so that you can proactively manage your corporate travel procurement programme.

This is where the TMC can play a critical role and show true value. By assisting the corporate to consolidate all this data in to one source, and help them interpret it, the TMC is providing a valuable consulting service, the benefits of which will be completely clear to those corporates who may be questioning how to leverage fully the services of their TMC.

Here are some of the steps you need to follow to get the data consolidation journey right:

1. Involve all the stakeholders, not just those involved in travel management, who are responsible in the traveller journey – including risk, HR, legal, etc.

2. Consider what the process is of booking a trip and define for every step what data is relevant for the organisation and what it costs.

3. Look for where you can find the sources of the data for each of these elements. Consider even the small-ticket items, as well as those likely to happen after the trip so that you can achieve a more accurate Total Cost of a Trip amount.

4. Ensure that this data is delivered consistently and that it is clean. This means checking it often so that you are not drawing ‘dirty’ reports that will prove useless in your efforts to manage your programme proactively. Involve your suppliers in helping you source this complete information.

5. Leverage the data you have within your policy, e.g. if your travellers tend to eat dinner at the hotel, your supplier data will indicate this and you could perhaps negotiate a better rate for their F&B by consolidating your business.

A word to the wise, however. You need a lot of historical data to predict what will happen in the future with any level of accuracy.  So, to be able to reach this point, make the collection and storage of as much meaningful data as possible a key priority. You might only see the value six or 12 months from now, but you have to start somewhere!

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This post was written by Monique Swart

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