INSIGHTS
Data-driven business travel: Maximising ROI for your growing business
Every decision counts for fast-growing businesses; this is especially true when dealing with business travel. Yet travel is often perceived by companies as a “fixed cost”; categorised as an indirect procurement item alongside insurance and office supplies. These expenses are typically managed with an eye on cost savings.
This perspective can be limiting for travel as it is not a one-size-fits-all expense. Business travel varies by company, its culture, its size, and its business objectives. It even can vary by individual traveller.
Culture and strategy: the driving forces for managing corporate travel
Company culture significantly influences travel decisions. Your company may emphasise face-to-face internal meetings, while others prefer virtual gatherings with occasional in-person meetups. It's crucial to align travel tactics with your company's cultural and strategic direction. This becomes even more true in companies that have an informal or decentralised procurement programme.
Juan Antonio Iglesias, Head of EMEA at FCM Consulting says that most companies, regardless of size, will categorise business travel as an indirect procurement item that does not tie into strategic objectives. This can be perilous. “You’re not buying pencils or paper which will be consumed at different times by all. The impact of travelling will be individual,” said Juan.
A shift in perspective: business travel as an investment
Business travel is undertaken in order to carry out your company’s strategic business goals.
With this in mind, it makes sense to view business travel as more than just a typical business cost, but rather as a strategic investment that drives enterprise growth.
Your company’s business travel should align with your strategic goals. This alignment can be achieved by evaluating the return on investment (ROI) from each trip and tailoring the approach to your company’s unique culture and objectives.
Strategic alignment and travel cost management
For maximum impact, the value and expected ROI of travel should ideally be defined up front. But business is rarely conducted in an ideal environment. Trip decisions must be made quickly, and they tend to be approved, even when costs are high.
While cost control is vital, an expanding company might benefit from a more flexible approach.
"Different people will look at travelling with different objectives in mind,” added Juan. Executives may have different objectives for travel than the sales or account teams do, for instance.
Aligning travel spending with corporate strategy allows companies to connect the dots between business objectives and travel expense for a clearer analysis of ROI. This means understanding the diverse needs of different departments and integrating travel plans with overall business objectives.
How is this done? With data.
Data-driven decisions in business travel planning
Travel management ROI is maximised by understanding the varying needs of your travellers and how each trip contributes to the company’s goals. For instance, a trip by a sales team member might have a tangible, immediate benefit, while a journey by an HR professional could offer long-term strategic value, or no value at all.
Trips that are found to be of high value to the organisation should be encouraged as they will have a direct impact on the bottom line. Trips found to be of low value in comparison to strategic goals will have a more difficult time showing ROI. In general, those should be avoided.
The availability and accessibility of data changes the way we plan, assess, and act on business travel. The right business travel data can help businesses connect the purpose of business travel directly to its strategic impact, helping companies to see the true value of a trip. With the ability to estimate costs for flights, accommodations, and allowances, companies of any size can easily make informed decisions.
While this information has historically been difficult to track, the best travel management companies are now able to provide the tools, the data, and the expertise to help companies with trip purpose alignment and ROI.
The Bottom Line
For growing enterprises like yours, travel is more than a necessary expense. It's an investment in growth and strategy. The approach to travel should be as dynamic and unique as your business.
By aligning travel with business objectives, leveraging data for informed decisions, and understanding the nuanced impacts of each trip, you can turn travel into a strategic tool that delivers tangible value.