Feature

THE FINAL FRONTIER

Effective use of data is key to managing travel in the recession, reports David Churchill

Lieutenant Commander Data, as fans of Star Trek: The Next Generation know, is the pale-skinned android whose positronic brain is able to handle millions of bits of information every nano-second to enable him to make the right calls as a senior officer of the USS Enterprise-D. But data has a very different meaning for travel managers and others involved in buying and monitoring business travel: it is the raw management information (MI) that can give them the edge in managing what is one of their biggest variable costs.

But, as Data regularly discovered in his travels across the galaxy, too much information can be just as bad as too little, driving his computer brain to distraction. Although the fictional Data inevitably managed to overcome such issues, real world travel managers must sometimes feel they are facing an MI overload.

Not only is the amount of data from all sources growing significantly in the recession as companies seek to cut costs, but there is also a demand for new MI to be taken on board - everything from corporate social responsibility (CSR) issues and reducing carbon footprint from travel, to keeping track of employees for security and safety reasons.

The new corporate manslaughter legislation, for example, puts the onus on companies to ensure the safety of staff when travelling on business, and this inevitable means enhanced monitoring of travel plans. In addition, the US Transportation Security Administration's demand for pre-flight data to be lodged before travel under the Secure Flight Program is yet another layer of MI that needs to be addressed. The growing demands of regulatory compliance, moreover, were identified by BCD Travel recently as one of the chief reasons likely to persuade companies to implement an expense management system to maximise the use of MI data. "But it can be a daunting task for travel managers to analyse data to serve so many purposes and audiences," points out Leslie West, senior VP for client data solutions at BCD.

Yet there is undoubtedly also increased demand for data in the recession from companies anxious (some may be desperate) to cut travel and expenses costs. Knowledge, they believe, is power. "There are very few organisations which are not increasing their control of all types of spending in the current environment," points out Nigel Turner, director of pubic sector and industry affairs UK at Carlson Wagonlit Travel. "This means that MI is more relevant than ever as a tool for companies to manage their spend."

The recession is clearly enhancing the appeal of using MI more effectively, believes Norman Gage, director of business travel at Advantage Business Travel. "Right now, MI data is at its most valuable," he says. "Airlines, for example, rely on flown revenue stats which, at best, are two months behind, so a good set of MI can plot performance on a daily basis."

Karen Penney, vice president business solutions, American Express global commercial card, not surprisingly agrees that effective MI and analysis is more crucial than ever.

"Savvy companies are using their MI to the best advantage in the current economic climate, enabling them to identify and retain essential travel with maximum return on investment, as well as cutting travel where it will have less impact on their future business prospects," she says. "Even when considering broad cuts or policies, robust MI can help to identify the most appropriate actions so that companies can continue to retain the most important aspects of their travel programmes, such as client-facing travel."

Research carried out by Accenture for Amex (interviewed were conducted in the final quarter of last year) also suggested that lack of MI data led to companies making poor decisions for the short-term when faced with the immediate pressures of a downturn.

The Accenture report said that lack of information was most often to blame for 'reactionary' decision making. "Insights from data analysis can bring clarity to business problems and help managers make fact-based, long-term decisions," it claimed.

Yet in the recession, improved MI does have short-term benefits as well. As any corporate negotiator knows, good data is an essential part of achieving a deal with suppliers. "Key data and the way it is reported can be tailored to the needs of a company, clearly tracking the use of a supplier to provide an extremely powerful negotiation tool," says Penney.

Good MI, combined with the economic downturn, can also help companies make great strides in achieving better travel policy compliance - something that often takes a backseat during boom times.

"By using MI efficiently, companies can closely monitor compliance to their travel policy by identifying any violations carried out by employees travelling on business - such as booking a higher class of travel than the policy allows, to not reporting unused tickets," says Yael Klein, managing director of AirPlus International. She points out that companies using such MI tools as the AirPlus Information Manager can "capture flown data from key airlines, which is instrumental in identifying unused tickets eligible for a refund".

The online reporting tool "also captures pro-rated airline data which identifies the costs of a flight segment on a low-cost carrier, while the data can also be used to compare the expenditure on company credit cards used for business travel."

Yet, as AirPlus itself revealed earlier this year in its latest Travel Management Study, there remains a fundamental weakness among British companies for an ambivalent attitude towards using technology to improve their analysis of MI data. The AirPlus study, which covered companies from 15 countries, found that while nearly nine out of every 10 of the UK-based companies analysed their travel spend, less than a quarter said they used special analytical tools or software to do the job.

AirPlus suggests the reason for this could be the lack of investment funds for such software, along with some scepticism over the likely benefits. It points out that a more detailed examination of corporate responses to its survey found that "those which have such tools expressed much greater confidence about their potential for making savings."

But there are reasons, other than a simple scepticism about technology, for the reluctance of some companies to wholeheartedly embrace more effective analysis of MI data. Most important, it seems, are doubts over the quality of the data being captured.

"There is a significant amount of leakage from hotel data, between what is booked and what is actually spent," points out CWT's Turner. "While the TMC [travel management company] will capture the data it books, individual travellers use their cards as well, which is not directly captured."

CWT, he points out, offers a one-stop MI tool (called the CWT Program Management Centre) aimed at "integrating credit card and travel data more effectively to ensure programme compliance and to identify leveraged spend for supplier negotiations".

Paul Saggar, HRG's director technology product development, also acknowledges that "data isn't equal across all areas, although this is not usually restricted or defined by the traffic type - that is, air against hotels." He thinks the key factor in determining the quality of data is usually the method of booking, whether via a global distribution system (GDS), direct connect or website.

"There is no 'best' method of collecting data as each channel provides a different view of possibly the same transaction," he says. "But the best processes revolve around the collection from as many sources as possible and then bringing them all together to give a complete picture.

This covers what was shopped for, what was approved and what was subsequently booked, and what was the cost at that point. Then you have to factor in any changes and amendments, variances to the cost and whether the travel actually took place."

Hotels and car rental, however, remain the Cinderella sectors for MI, given the established systems for processing airline tickets data.

AirPlus's Klein, for example, notes that "the card industry has been trying to improve hotel MI data for years and their biggest focus should be on improving the data feed from the hotels." She believes future hotel data should "show the breakdown of all components of a hotel stay that can be negotiated with suppliers, such as room nights, mini-bar charges, internet usage, breakfast, parking and so on."

Furthermore, Amex's Penney, points out that in "some European countries we have implemented a car folio programme which provides greater visibility of car rental costs, such as mileage or upgrades."

Rail data also poses challenges in capturing MI, rather ironic given that it is one of the growth areas in the downturn as business travellers switch from planes to trains. BCD, for example, points out that rail distribution is fragmented and travel by train in Europe is often sold as an open ticket, where the traveller can take several trains during a given period, disembarking at various stations.

"In addition to creating difficulties with monitoring travel spend, this poses a secondary challenge in terms of traveller tracking and security," says BCD's Leslie West.

A further issue of effective handling of MI data is the ability and resources of travel managers and procurement professionals. "There is a clear problem for perhaps the majority of travel managers, especially in smaller businesses, in not having sufficient facilities to handle the data in the best way for them," says Nigel Turner. "Larger companies, however, often have more resources to fully analyse data and so reap the benefits."

HRG's Saggar thinks that the background of established travel managers is important. "Travel managers are becoming increasingly aware of the use of data and as such there are many with great experience on how you get the best from what you have," he says. "They also understand travel which is a key factor." But he also feels that "procurement experts can bring a good level of experience and negotiating practices to bear on this subject, while they also to a large degree have very good analytical skills." Thus he feels that best practice is combining expertise and experience.

Yet it is also the case in the current environment that travel and procurement departments are under severe pressures as companies seek to cut costs. Is there a real danger of too much data causing an information overload? Yes, says Advantage's Gage, although "not if the requirement is for information that is relevant to achieving the goals [of more effective handling of MI]".

Saggar thinks it is a matter of degree. "There is a danger of collecting too much data and not actually making use of it, rather than an information overload as such," he says. "One view is that you can never have enough, especially if you can get some value from it."

AirPlus's Klein argues that "if used effectively, there is no danger of information overload". But she reveals that in the current climate, "some managers may only be interested in a few key reports, which identify immediate cost savings potential". Hence, AirPlus has packaged six re-configured reports (rather than the usual 40) "which give customers cost transparency at a glance", she says.

In the coming months, therefore, the continuing global recession is likely to see such pragmatism play a greater role as companies keep a tight rein on costs. But handling the data remains the key - just as it did for the Lieutenant Commander of the same name on the bridge of the Enterprise.