With the increasing need for corporate travel, various travel management companies have emerged over the years to fill the gap in the market for agencies specializing in it. When a company’s size goes beyond 200 employees, it becomes really hard for a corporate to keep track of travel expenses and its management. It can be accredited to the daily business in an office making it impossible for businesses to provide full-fledged support to traveling employees. In such cases, corporates can use the help of corporate travel management outsourcing.
What is corporate travel management outsourcing?
The act of outsourcing all the travel requirements of an organization to specialized travel management companies is known as corporate travel management outsourcing. It involves the booking of flights, rails, and accommodations as per the guidelines of the corporate. Additionally, TMCs take care of all the management activities such as expense management, generating and collecting invoices, analyzing expenditures, and providing a detailed report. One can also look up to outsourcing companies for offering 24×7 travel support.
Fundamentals of corporate travel management
Corporate travel management is an important aspect of business trips. A comprehensive travel management plan includes everything from start to finish regarding the trip that acts as a reference for not only the traveler but also the travel managers, finance team, and managers in several other disciplines. It should define the itinerary, the purpose of travel, and the overall return on investment analysis. Corporations benefit greatly from employees traveling to carry out business in a foreign land. These trips increase the visibility of the brand, convert prospects into clients, and train employees about new technology and networking in general.
Pre-outsourcing considerations
Before we delve into the benefits of hiring a TMC or outsourcing corporate travel, let us discuss how to choose the right vendor for you. Every organization has different requirements; hence, one should ensure to find the best fit for your missing puzzle.
1. Internal assessment
The first step in the quest is understanding the need for a TMC for your organization. If you have a small startup you would probably not want to get into the package system. Whereas mid and large-cap organizations would require frequent travel; hence, packages will be a more alluring and practical option for them.
2. Analyzing existing processes and challenges
Once you have established the requirements of TMCs, you would want to stick to the existing processes that are doing good for the organization and understand the possible challenges. The issues can vary from extending support to the employee or enhancing the ROI of the trip. Providing a tailored set of problems will enable TMCs to cater to the specific requirements of your organization and offer more effective solutions.
3. Vendor selection criteria
Though almost all of the TMCs have similar services, they differ greatly on the granular level. Some may have robust processes while others may remain flexible in their services with hidden terms and conditions. One of the major problems encountered by corporates is big promises are often revealed as smaller offerings. Therefore, researching well before choosing your travel partner becomes an essential step of the process.
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Benefits of business travel outsourcing
1. Strategic travel planning
One of the primary functions of a TMC is to provide a detailed strategy for planning and implementing any trip. A representative may sit down with your travel manager or admin and understand the requirement better. They together will put forth a travel policy with minimum to no flaws. Additionally, with years of expertise in planning they will create a travel itinerary that will include minimum spillage of the resources.
2. Travel booking and budgeting
An increase in travel activities without proper management can result in over-budgeting and expense mismanagement. TMCs ensure a minimum budget with maximum services and features. With their extensive connection with airliners and hotels, they get the inventory at a cheaper rate than internal corporate travel managers. They also help in forecasting the overspending and how it will impact the overall trip in case corporates induce last-minute changes in their plan.
3. Travel expense management
Travel expense management is a crucial part of corporate travel. Every expense should be recorded and analyzed to improve the future travel experience and ROI. Further, expense management helps reimburse an employee’s pocket expenses and calculate the overall tax exemptions for the corporate. TMCs utilize several travel portals that directly link to the expense management system of the corporate in real-time for added transparency.
4. Travel risk management
Ideally, corporates, TMCs, and employees would want a smooth trip without any hindrance from the outside environment. However, that is not always the case. A trip’s experience is directly dependent upon uncontrollable factors such as political unrest, natural calamities, theft, employees’ health, and many more. Outsourcing of corporate travel ensures employee safety as the primary concern along with not jeopardizing the purpose of the trip. They provide emergency evacuation and services that limit the threat to a bare minimum.
5. Key Performance Indicators (KPIs)
Travel management companies have qualitative and quantitative KPIs when it comes to booking, management, and analysis of a business trip. They go to any lengths and breadths while fulfilling their commitments. Another added advantage of choosing a TMC is ensuring inter-country travel compliance. TMCs will help you file individual visas and describe the particular document requirements of the destination country. Finally, they use encrypted methods while offering their services making data transfer a secure process.
As businesses are focused on expanding their business overseas, corporate travel is increasing day by day. Corporate travel management outsourcing assists in the proper utilization of companies’ resources and newer technologies such as AI that are contrasting the market with each passing day.
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Corporate Travel Management Outsourcing FAQs
What is corporate travel outsourcing?
When dealing with the management of an increasingly large number of corporate travel assignments, medium to large size companies usually outsource the work to agencies that specialize in the area, called Travel Management Companies (TMCs).
Why are TMCs needed?
In medium to large-size corporations, the internal flow of work and tasks often hinder proper management and flow of business travel assignments. Such that it becomes a bottleneck in the business’s activities overall. To make things efficient and ensure proper expenditure of corporate funds, travel management is outsourced to be managed and overlooked by TMCs.
How to select a TMC for a corporation?
There are many considerations when selecting a TMC, like the budget allocation, size of the corporate, special constraints unique to the corporate, and proper assessment of internal resources to find a match as per needed requirements.
What are the Key Performance Indicators(KPIs) of a TMC to look for, when outsourcing?
TMCs have quantitative and qualitative KPIs that they go to any lengths to improve on their end so that any business associate of theirs becomes a recurring customer of their services. At the end of every individual assignment, and also throughout, they provide a comprehensive look at their data and provide data-driven feedback regarding the business travel, at the end of the trip making record-keeping of financial and operational data very easy for the corporate.
What are the benefits of outsourcing corporate travel management?
Outsourcing corporate travel management offers benefits like cost savings, access to industry expertise, streamlined processes, improved compliance, enhanced traveler experiences, and 24/7 support.
What services are typically included in corporate travel management outsourcing?
Services typically include travel booking, expense management, policy enforcement, supplier negotiation, risk management, traveler support, reporting and analytics, and duty of care.
What factors should I consider when choosing a corporate travel management outsourcing partner?
Consider factors like industry experience, customization options, technology capabilities, cost structure, global reach, and references from existing clients.
How can outsourcing improve compliance and policy adherence in corporate travel?
Outsourcing partners use technology and automated processes to enforce policies, monitor expenses in real-time, and ensure compliance, reducing policy violations.
How do I choose the right corporate travel management outsourcing partner for my company?
Choose a partner with experience in your industry, technology that aligns with your needs, a cost structure that fits your budget, and a strong track record in delivering quality services.
What cost structures are common for corporate travel management outsourcing?
Cost structures vary but can include transaction-based fees, management fees, and a combination of both. The choice depends on travel volume and preferences of your company.
What kind of technology and tools do outsourcing partners use to manage corporate travel?
Outsourcing partners use booking systems, expense management software, reporting tools, traveler tracking, and mobile apps to streamline travel management.
What support and assistance can companies expect from their outsourcing partners during emergencies or disruptions?
Companies can expect 24/7 support for travelers during emergencies or disruptions, assistance with rebooking, access to risk management services, and communication to ensure traveler safety and well-being.
