Procurement vs HR: Who will buy travel for business in the future?

White Papers 21 May 2018

Once upon a time, not that long ago, in-house company travel managers ruled the roost. Now procurement, finance, HR, IT, security, marketing, health & safety teams, bookers and travellers themselves all have a say in developing and delivering the travel program.

Nowadays there’s more to business travel than purchasing, so where should responsibility for travel sit?  The problem is that travel management is a very broad discipline, and the range of company functions that need to be involved changes according to the range of services covered by travel policy, the maturity of the program and that most individual of factors – corporate culture.

The fact is there’s much more to travel management than purchasing. A program can offer great rates and loads of perks like free Wi-Fi, complimentary upgrades and so on, but if the program doesn’t meet the needs of travellers as well as the company, or the program isn’t properly explained to travellers and arrangers, there’s little chance of securing the required level of compliance.

2017 research by Deloitte found that 83% of company executives say talent acquisition is important or very important. This explains a shift in corporate attitudes since the millennium from organisations using the travel policy as a stick with which to beat travellers into compliance, to regarding travel policy as means to engage and even reward travellers. Put another way, whilst most business travellers go where they are told, they do expect to be treated as customers.

Millennials and Gen Z travellers won’t accept being treated in the same way as previous workforce generations. If they are, a competing company will snap up their talent. So, travel managers are now looking to drive savings through traveller satisfaction, which in turn means harmonising corporate objectives with employee productivity. This has traditionally been HR’s.

The scope of travel management is changing. Events like ProCon Indirect and ProCon Travel**  show how travel is embracing multiple purchasing categories.  Over the last 10 years Strategic Meetings

Management (SMM) and relocation has come into travel’s orbit. The number of TMCs providing SMM services has grown significantly, either by importing expertise or acquiring specialist agencies with the expertise and systems already in place. Consolidation in travel management is being driven by corporates’ desire to have all management information in one place and by duty of care responsibilities.

PwC predicts that the number of corporate assignment projects will increase by 50% by 2020 with the globally mobile workforce numbering 1.87 billion by 2022. The very essence of relocation -permanent or temporary – is the well-being and satisfaction of the employee, which means HR keeping a leading role in relocation management. Expense management brings finance teams into the equation, but HR still has a role to play here too; 44% of companies say that an HR integration is essential in expense management

From setting objectives and priorities such as savings, duty of care, traveller safety and well-being, HR has much to contribute to travel management over the next decade, and beyond.

Processes for trip approval, booking, expense & compliance must be integrated and robust, making technology another essential component of travel management. IT teams are core to linking up these processes, especially as more corporates look to data analytics to evaluate their travel programs.

Millennials already rely on technology to get things done quickly. In the future, when augmented and virtual technologies are embedded into organisational DNA, machines will make buying decisions on their behalf. It’s simply illogical to assume IT functions won’t have a big part to play inn travel management too.

So where does this leave procurement? B2B is a process-driven world, where the focus is on cost savings and margins. Procurement’s primary responsibility is negotiating and buying products and services. Procurement sets the rules that govern buying processes, ensure fair trade and sustainable supply chains.

Of course, none of this works without the buy-in of the most important stakeholder group of all – travellers. Which is where the link between procurement and HR becomes essential. As we’ve seen, the argument around whether procurement or HR should be responsible for corporate travel policy is therefore misleading. Travel management requires the skills and knowledge of multiple teams across multi-disciplines.

The answer to the debate will depend largely on the management culture in any given organisation. Which only goes to show that, once again, when it comes to travel management, one size doesn’t fit all.

This article first appeared on FCM Travel Solutions USA.