In the past decade, the rise of online self-booking tools and internet price comparison sites, as well as technological leaps in expense reporting and reimbursement, have revolutionised corporate travel management. These advances have led to cost savings, more choice, more productivity, and have enhanced the personal travel experience for globe-trotting executives. Travel managers have long been aware of the opportunities, but what about CFOs, who, after all, are the ultimate decision-makers when it comes to investing in new technology and ways of working?

In July 2008, CFO Europe Research Services, a unit of CFO Publishing and part of The Economist Group, began a research project with Amadeus, asking senior finance executives for their opinions about travel management. The report is based on the results of an online survey of more than 120 senior finance executives in Europe, Asia and the US, and on in-depth interviews conducted with
executives at the following companies: Affinity Insurance Services (Aon), eBuilder, Logica, McCann World Group, Sightsavers International and Swiss Re.

CFO Europe Research Services and Amadeus developed the scope of the research jointly. Amadeus funded the research and publication of our findings, and we would like to acknowledge the Amadeus team for its insight and support. At CFO Europe Research Services, Emily Williamson wrote the report and conducted the interviews. Jason Sumner managed the project and edited the report.

The report certainly confirms that finance views travel management primarily through a cost-control lens. The possibility of savings will always get CFOs' attention, and there is no doubt that while controlling discretionary costs has been important to some extent, for many companies it has become paramount as fixed costs rise and economic uncertainty throws doubt on revenue growth.

The research reveals exactly where CFOs want travel managers to focus their cost-conscious energies. For example, IT systems that provide one view of travel spend, which supports corporate-wide leverage with suppliers, will find favour with finance. And we find that some CFOs do indeed look beyond cost when making travel decisions relating to the adoption of newer travel tools, productivity considerations and the green agenda. Throughout the report we have highlighted key regional differences between Europe, Asia and the US, where these occur.

Key findings

- Travel costs can be managed better
While 60% of survey respondents believe that managing travel costs is very important, under half say that their companies are managing them well or very well. And in spite of its perceived importance, finance executives say that travel cost management has, as yet, made a minimal contribution to overall cost management at their companies.

- CFOs say travel managers should prioritise employee productivity
Cost isn't the only consideration among some CFOs. Nearly two-thirds of respondents said that they wanted travel managers to help save employees’ time on their journey. And 45% said that they wanted travel managers to focus on employee productivity when booking travel.

- On the whole, CFOs aren't yet convinced of the benefits of green travel
There is a good deal of ambivalence about environmentally-friendly travel policies - more than half of respondents do not see any business benefits. However, some companies, especially those that are highly regulated or have a green reputation to maintain, take green issues into account. We give examples of companies that have made the environment one of their key concerns, because their investors and customers expect it.

- CFOs want to see travel IT linked with ERP, HR and expense management systems
Integration may be the goal, but respondent companies are far from achieving it. For example, nearly three-quarters of survey respondents think that integrating travel management systems with expense management systems is very important, but less than 20% say that the two systems are “highly integrated.”

- Travel managers should focus on improving supplier relationships
Almost three in four respondents said that increasing leverage with travel suppliers was important or very important, but only 36% said that their companies were doing well or very well at this. The survey shows that CFOs believe in economies of scale. IT systems that provide one view of travel across the whole company provide powerful leverage with suppliers.

Speaking the language of finance - Top tips for travel managers

Saving money, in both the short- and long-term, is uppermost in the minds of the CFO, but the research shows they are concerned about the standard and value of travel too. A smart business case will have the right mix of cost, standard and value arguments. The elements to emphasise when making a business case will depend on the company culture - whether the CFO sees travel as a vital component of doing business, or as an unnecessary evil.

- Demonstrate immediate and long-term cost savings: 78% of respondents say they want travel managers to demonstrate immediate cost savings (ie in the current fiscal year) and 62% want them to demonstrate longer-term cost savings (ie in future fiscal years).

- Emphasise the integration benefits of any new IT system in terms that will resonate with finance: Integrating travel technologies with the expense management system, HR database and other business operating systems will help to produce one view of travel across the organisation. As we have seen, this will be indispensable in negotiating better deals with suppliers, which half of CFOs said they wanted from their travel managers.

- A single set of travel data helps justify the expenditure: A single set of coherent travel data will increase the transparency and control of travellers’ spending and thereby help to justify each trip to finance.

- Frame quality proposals with customers in mind: The survey results show that CFOs do care about service quality, and indeed, it goes without saying that when it comes to customer-facing travel, quality is a must. Proposals that see the company positioned well with customers will win plaudits with CFOs.

- Find a way to measure productivity: The research suggests that CFOs are interested in how employees can save time while on the road. Budget travel needs to be efficient as well as save money, because after all, inefficient travel is an indirect cost. Currently travel managers don't have a way of measuring productivity effectively. But CFOs will be impressed with an ROI that passes the plausibility test, even one based on rigorously presented anecdotal evidence from senior executives around the company.

- Choose carefully when making green arguments: In the right industry, with the right management team, incorporating CO2 emissions targets into travel policies will also resonate with the CFO, especially as the green issue moves even higher up the global agenda and as clients and investors alike come to expect it.