While integrating IT travel tools with corporate expense management and procurement systems allows chief financial officers (CFOs) to better manage travel costs and profitability, executives are hampered because most companies have yet to link such systems, a report has highlighted.
The Cost Control and Beyond: The CFO's Agenda for Corporate Travel report based on a survey by CFO Europe Research Services, found that such integration would give finance chiefs a more comprehensive view of corporate travel spending and in turn, bring their companies some key benefits.
First, it allows the CFOs to better advise their organizations on improving profitability, which typically result in immediate cost savings. Second, it also gives CFOs the flexibility to track spending by project or employee. A third benefit is the ability to create better budgets and forecasts.
The report was based on an online survey of over 120 senior finance executives in Asia, Europe and the United States, in July, as well as in-depth interviews with executives from companies including IT services provider Logica and global reinsurer Swiss Re.
The study, funded by Amadeus, an IT provider for travel and hospitality industries, found that almost three-quarters of CFOs polled recognize the importance of integrating travel with other expense management systems in their quest to manage travel costs. However, only 18 percent said such integration has been achieved in their companies.
Peter Smith, vice president of Amadeus Asia-Pacific's Business Solutions Group, told ZDNet Asia in a phone interview, the low rate of integration was partly due to the perception that travel is "special" and outside of the scope of normal procurement.
"Not all corporations have well-developed travel policies, and most of them do not have travel-related expense integrated into their expense system," he said. "That means, it's a very labor-intensive process for the returning traveler--of filling forms, matching the credit card bills with receipts and then forwarding these to the accounts department."
With the exception of travel however, CFOs in general, have noticed how seamlessly procurement and expenses are integrated for other functions in the organization, he added.
The survey also found that nearly two-thirds of CFOs believed automated travel expense reporting systems and online corporate booking tools have substantial cost-saving potential.
According to the report, online self-booking tools, Internet price comparison sites and technology advancements over the past decade in expense reporting and reimbursement, have led to more choices for employees, and offer companies increased productivity on top of cost savings.
Savings of around 10 percent to 15 percent can typically be achieved with the use of travel technologies, said Smith. They also enable employees to easily make bookings that conform to the travel policies of their companies.
Implementation of an effective integrated system would, however, require the coordination of three departments in a company--human resources, administration and the financial controller, he pointed out.
The HR department, explained Smith, maintains employee morale by ensuring the "travel policy is equitable", while the financial controller has to make sure data from the travel-related systems can be received by the expense system. The administration department handles various details such as tickets and visas.