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Generation Y: A New Challenge For Travel Procurement

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Travel programmes are becoming increasingly difficult to enforce. For procurement professionals, this poses two problems: first, travellers who book their own travel out of policy might not be securing the best rates; second, dissipated spend reduces a procurement managers’ ability to negotiate discounts.

 

To address these issues we need to understand why travel programmes are under stress. As the workforce is renewed, a new generation of employees is arriving with different expectations from its predecessors. Sometimes called Generation Y, these are people who are used to organising themselves via their personally-configured tablets and smartphones. Corporate tools slow them down, and are often rejected altogether. Many companies have responded by implementing a “Bring Your Own Device” policy.

 

When it comes to business travel, these digitally-savvy employees expect a sleek, consumer-like experience from corporate booking tools: when they don’t get it they turn to the consumer applications they already have to hand, and book outside the corporate environment. Not only can this lead to irresponsible spending, and weaker negotiated rates in the future, but it poses significant risks to a company’s “duty of care” responsibility towards its employees. If you don’t know where they are, you can’t help them in an emergency. So how can procurement help to bring Generation Y back into the fold?

 

Naturally, technology offers solutions. The latest business travel & expense applications bridge the gap between employee expectations and corporate concerns. The most radical have stripped down travel booking to its essence. Travellers input when and where their business meeting will take place (for example, by clicking a link in Outlook), and, within seconds, the application proposes a bookable, cohesive, policy-compliant set of services (taxi, flight, hotel, etc) presented as a “door-to-door” timeline to the meeting. Some even pre-build an expense report to submit on return. The traveller saves hours compared to the usual process of researching and booking individual elements of their trip. And because these apps estimate costs for transfers, meals and other extras, managers can understand and make approval decisions based on the predicted total cost of an entire trip. True demand management of this kind can lead to significant savings.

 

Designed primarily for tablets and smartphones, these applications are a good example of businesses adapting to Generation Y employees. The employee gets their consumer-level experience, so adoption rates are high. This allows companies to track employee movement properly and promote preferred suppliers more effectively. Meanwhile this new insight into the total “door to door” cost of travel empowers procurement and travel management professionals to finesse their policy and control costs. And, importantly, procurement managers can arm themselves with accurate data for each element of their travel spend, better informing their RFPs and strengthening their hand in supplier negotiations.

 

The pace of technological change is increasing. For business travel management, this means a radical, ongoing transformation in which procurement professionals are playing a critical part. The technology available today offers significant opportunities to those who embrace it. Those that don’t may find themselves at a distinct disadvantage.

 

Dean Forbes is CEO of KDS, a provider of travel and expense management solutions to organisations around the world.

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