1) The document discusses challenges facing procurement and travel management professionals in controlling costs, with a focus on travel and meeting expenses. 2) A panel of experts note the importance of gaining visibility into spending through centralized data on who spent what and when. New technologies help track spending on meetings, hotels, and other items. 3) Controlling decentralized meetings and managing maverick spending are ongoing challenges. Education and clear communication of policies are seen as keys to managing costs.

1. Management
travel
canada
HAVE SAVINGS,
WILLTRAVELCost control in travel procurement
Premiere Issue
November/December 2011
INSIDE: Keeping your travelers safe in an insecure world • How to achieve compliance with your policies

2. 8 |Travel Management Canada
Evolving technology, maverick spend,
visibility challenges—getting a handle
on travel spend is no easy task. But there
are solutions, says our panel of experts.
Travel Management Canada editor Michael
Power shares their insights and tips.
HAVE SAVINGS, WILLTRAVEL
Cost control in travel procurement
ROUNDTABLE

3. P
rocurement and travel management
professionals face myriad challeng-
es not only in performing their jobs,
but also in keeping costs under control
while doing so. In October, Travel Man-
agement Canada convened a panel of ex-
perts for a roundtable on cost containment
in this fluid and sometimes personal area
of spend. The editorial event was spon-
sored by Global Business Travel Associa-
tion Canada and BMO Financial Group.
At the table were: Tanya Racz, president,
Global Business Travel Association Canada;
Kevin Tait, senior manager, payment strat-
egy and emerging products, BMO Spend
& Payment Solutions at BMO Financial
Group; Michael Kell, regional vice-president,
enterprise sales Canada, StarCite Incorpo-
rated; James Moore, procurement manag-
er at Rogers Communications Inc; and
Sherry Marshall, senior manager, travel
and corporate card at PwC.
Listing the major pressures affecting
travel and meeting procurement, GBTA’s
Tanya Racz noted the organization is gath-
ering data and forecasting information for
2012. Among other areas, reining in costs
ranks high on the list. “We found that, in
fact, for 2012 a lot of the priority for travel
purchasing professionals (is) cost control,”
she said.
Jim Moore of Rogers Communications
agreed, noting other factors affecting the
field tied into cost control directly. “Whether
travel reports, procurement, finance or what-
ever part of the company, our job is to maxi-
mize the value of company dollars,” he said.
Companies are now trying to manage
the ROI of business travel, said BMO Fi-
nancial Group’s Kevin Tait. While that’s a
challenge, travel spend done right can
yield positive gains. With pressures like
sustainability, new functionality, video
conferencing and others, organizations are
striving for value, he said. “Travel is typi-
cally the second largest controllable spend
for an organization. That amount of money
is something that’s sometimes difficult to
measure the ROI of.”
Although the pressure is on to measure
and control travel spend, it can be tough to
identify where money is going, said StarCite’s
Michael Kell. Organizations struggle to
identify who’s booking travel, who’s mak-
ing hotel reservations, who’s traveling and
who’s approving that travel.
“Understanding what those processes are
in companies that are sometimes very cen-
tralized and controlled by policies (is chal-
lenging),” he said. “Sometimes, it’s very de-
centralized and out of control, which
eventually would lead to maverick spending.”
The cost of meetings
The group listed meetings as the second-
largest cost pressure. According to GBTA
research, contractual agreements related
to meetings are expected to get stricter in
2012, said Racz. Going forward, buyers
and vendors had to “meet in the middle”
on certain issues, such as how far in ad-
vance conferences can be booked. Not do-
ing so will mean a faster shift to using lap-
tops and smart phones. “There’s got to be a
little bit of flexibility,” she said. “Other-
wise…it will shift it to this technology that’s
there a little bit faster than maybe it would
have five years ago, or two years ago even.”
Often, control of meetings isn’t central-
ized, said PwC’s Sherry Marshall—making
it difficult to know how much is spent and
who’s spending. “In a lot of places—espe-
cially smaller offices—it could be an admin
person who may not even know they’re
signing a contract they shouldn’t. Those
are the things we’re trying to get hold of.”
Using technology that records expenses
in a central location—along with using
meeting cards—helps capture and control
those costs, Marshall noted.
Because they’re decentralized and often
planned by administrative assistants or re-
gional offices, controlling smaller meeting
costs offers challenges, Kell said. Compa-
nies can have scant visibility without tech-
nology to source and track meetings. “Or-
ganizations should gain control of those
meetings of under 10 people—maybe un-
der $5,000—having as part of the technol-
ogy loop internal approvals so that appro-
priate people are approving meetings; or
looking at alternatives that could include
tele-presence and video conferencing and
asking, ‘is this actually the best, or should
it be a hybrid of the two?’”
Kell agreed a standard terms and condi-
tions document helps track meetings, as
does insisting employees register those
Canadian corporate
travel and procurement
experts from a cross-
section of industries
met at Purchasingb2b’s
cost control in travel
procurement roundtable
on October 4, 2011. The
event was sponsored
by the Global Business
Travel Association, the
world’s leading business
travel and corporate
meetings organization,
and BMO Financial Group,
a leader in the commercial
cards category, and a
full-service provider in
corporate spend and
payment needs. BMO is
one of the largest provid-
ers of diversified financial
services in North America.
This is an editorial report
detailing highlights of the
event.
sponsored by
Ourpaneloftravelprocurementexperts,
fromlefttoright:TanyaRacz,president,
GlobalBusinessTravelAssociationCanada;
KevinTait,seniormanager,paymentstrategy
andemergingproducts,BMOSpend&Payment
SolutionsatBMOFinancialGroup;James
Moore,procurementmanageratRogers
CommunicationsInc;MichaelKell,regional
vice-president,enterprisesalesCanada,
StarCiteIncorporated;andSherryMarshall,
seniormanager,travelandcorporatecard,PwC.

4. meetings. “By going through those process-
es, you really are minimizing the risk for the
company on a number of levels,” he said.
The earlier an organization engages and
communicates with stakeholders the bet-
ter, he said, and partners like hotels there-
fore know whether organizations have
standard terms and conditions. Those
partners need to know they’re accountable
to the organization as part of such agree-
ments, Kell said. “You’re making a com-
mitment to them to extend a significant
amount of your business, but they have ac-
countability on their side to help you en-
sure your policies are followed and that
data is being captured,” he said.
Since meetings are often decentralized,
using meeting cards to book facilities, en-
tertainment and other costs helps track
how much money is going
where, said Tait. Often, em-
ployees use personal or cor-
porate cards to get to meet-
ings, meaning organizations
can miss a chunk of the costs.
“More and more, we’re
seeing organizations booking
travel on behalf of individual
travelers, whether customers
or internal employees, on
that central bill account,”
Tait said. “What they’re re-
ally trying to do is consoli-
date as much of that meeting
spend into one spot as possi-
ble—it’s just easier to mea-
sure, easier to analyze.”
Clearing the view
Also important is gaining vis-
ibility into spend, our panel
agreed. What took place
within each transaction, who
spent money, how much and
when are all important. “It’s
visibility into the transac-
tion,” said Tait. “When mon-
ey is spent, is there enough
data around that spend to
give management some in-
sight into what it was for and
was it within policy, was it
not in policy?”
Having that information in
a centralized, accessible place is a major
step towards visibility, as is having the tools
to analyze that data, the group agreed. For
Kell, visibility extends beyond financial in-
telligence to knowing what is happening
from a security perspective. “Where are my
people? Where are my travelers? If some-
thing has happened halfway around the
world, do you have a central place where
you can very quickly extract if you have any
travelers in that location that need to be
contacted and moved? You not only lose
track of the financial spend, you literally
lose track of the individuals and how to
contact them in an emergency situation.”
Demand has grown for more detailed
data, said Tait, and even small expenses
such as water from a hotel mini-bars add
up. He cited one client that was spending
tens of thousands of dollars each year on
bottled water. The organization negotiat-
ed with their hotels to have a free bottle of
water per night for employees. “Even little
things can make a meaningful difference,”
he said. “It isn’t just a matter of negotiating
a hotel rate any more; you can actually ne-
gotiate on individual terms-something as
simple as a bottle of water, for instance.”
Kell noted technology can take travel
data from several sources and produce re-
ports showing where money is spent. But
having travelers comply with regulations
and procedures is key to getting meaningful
information. Moore noted his organization
uses technology to take data from invoices
and cards and combine it for the total spend
within a facility. “(Visibility) is very dynam-
ic,” Moore said. “I think we’re a lot further
ahead than we were two years ago.”
Marshall said PwC has good compliance
largely because the company makes process-
es easy for employees. “There’s less work for
employees to process an expense report,”
she said. “We have an online booking tool
that’s been successful and we make it easy to
use. I think when you make it easy for the
employees you get good compliance.”
Still, some areas offer challenges in
terms of maintaining visibility, said Tait.
Airline ancillary fees, for example, are dif-
ficult to track and sometimes charges ap-
pear on invoices that employees had to
identify in expense reports. This could
lead to mislabeling charges. “As the indus-
“Inalotofplaces—
especiallysmaller
offices—itcould
beanadminperson
whomaynoteven
knowthey’resigning
acontractthey
shouldn’t.Those
arethethingswe’re
tryingtogetholdof.”
—SherryMarshall
ROUNDTABLE

5. try evolves and ancillary fees are intro-
duced, there’s still a long way to go for
proper identification of what fees are for,”
he said. “If it’s put on a corporate card that
information will come through on a corpo-
rate card as long as the vendor is providing
that information up front.”
Educating employees is important in
dealing with ancillary fees, Moore noted.
“If they don’t realize how critical it is for
the data to be clean, crisp, clear, they may
not be as specific as they should be in
breaking that information out.”
Maverick spend
Another critical policy area discussed was
maverick spend. At Rogers, maverick
spend—buying goods or services outside
the preferred process or system—gets re-
viewed each month, said Moore. Employ-
ees remain aware the company is monitor-
ing spending and are more likely to
monitor themselves. Educating employees
is key when reining in maverick spend.
“We have a much more savvy traveler than
we did five years ago,” he said. “They’re
more aware of questions to ask about fares,
about conditions, cancellation, changes,
that type of thing, and about other ways of
doing meetings. I think that’s going to help
us a lot in doing our jobs, and the traveler
is better prepared.”
Airlines, hotels and others often have
“merchant category codes”, said Tait, so
travelers are blocked from spending at cer-
tain airlines or hotels. But policies must be
balanced with flexibility so employees
won’t find themselves without options.
Tait also stressed the importance of com-
municating policy to employees when try-
ing to curb maverick spend.
“Educate, educate, communicate, com-
municate,” he said. “It’s not something that’s
going to happen overnight. I think the vast
majority of employees want to do the right
thing and be within policy. If they spend out
of policy, it’s (management’s) job to inform
the employee that they’re out of policy.
Here’s what they should have done, and
chances are it’s not going to happen again.”
Along with using technology, GBTA’s
Tanya Racz stressed the need for executive
support. “Unless they buy into it, so often
you won’t see it actually trickle down and
you won’t see compliance to policy actually
come into place,” she said.
Personal versus corporate
Travel may be personal, but organizations
don’t allow travelers unlimited leeway, said
Racz. Some organizations allow travelers,
for example, to fly economy class rather
than business, and use the remaining cred-
it for themselves or their spouse. “I don’t
really know that companies are doing that
(kind of thing) anymore,” Racz noted. “I
think now it’s a function of your responsi-
bility as an employee and that’s what you’re
signing on in your contract, and you’re ex-
pected to travel and this is just what you’re
going to do as part of your employment.”
Marshall agreed companies compromise
to ease travel’s burden on employees, but
travel was usually seen fore-
most as part of an employee’s
job. “I always say that policies
are guidelines and you can
look at everything as a one-off
view of things, and there are
always exceptions to policy,”
she said.
Moore divides travelers into
two camps: the travel-hard-
ened “road warriors” and “one-
offs” who traveled infrequent-
ly. “It’s not written into policy,
but companies might be a little
more understanding” that they
can’t expect an infrequent trav-
eler to wait for a 9pm flight
home to save $100 because
they’ve got family responsibili-
ties, Moore said. “Companies
and managers who have been
in those situations are a little
more flexible.”
Virtual reality
While some business meet-
ings must always be face-to-
face, our experts agreed con-
ference calls, virtual meetings
and other alternatives are
finding a place. For Marshall,
meeting virtually comple-
mented traditional meetings.
As with online booking tools,
technology saves time in vir-
“Educate,educate,
communicate,
communicate.
It’snotsomething
that’sgoingtohappen
overnight.”
—KevinTait

6. tual meetings. “And, I found it a very good
way to be in touch with my global col-
leagues,” she said. “We’re thinking more
globally now, so for one- or two-hour
meetings nobody is going to fly around the
world.”
Racz said the GBTA held several webi-
nars, and has seen increased attendance
through the ease of participation. “We do
have face-to-face meetings throughout the
year, but they’ve certainly been scaled back
both in that they used to be full-day meet-
ings, now they’re scaled back to over the
lunch hour,” Racz said. “If we do virtual
meetings we have participation up because
people can do it from their desks.”
Companies should begin looking at
forming policies around meetings, said
Kell. For example, ensuring meetings are
registered, deciding whether IT, travel or
both are responsible for virtual meetings,
among other areas. “In most organizations
there are individual silos with regards to
virtual meetings and travel.” The chal-
lenge is how to bring those two teams to-
gether to ensure virtual meetings are part
of the travel program, and that IT under-
stand the needs of people and how they
would use virtual meetings, he said.
Technology surrounding virtual meet-
ings has improved significantly, noted
Moore. Previously, signing on during a
virtual meeting could disrupt an event.
Now, signing on can be muted. Partici-
pants can also ask questions anonymously.
“As the technology evolves it becomes
streamlined,” he said. “It will become
much more popular and be-
come part of policy. It’s just
that it’s so new it’s not there
yet.”
Also more prominent are
tele-presence seminars, in
which participants in different
locations can view life-size ver-
sions of each other on moni-
tors. But participants must be
hyper-aware of their actions
because they’re on camera
constantly during such meet-
ings, said Moore. “You’re vir-
tually there,” he said. “It’s like
you’re in the room as if the ta-
ble is divided in half and you
were in Calgary and (other participants) are
in Toronto.”
Managing risk
While risk management for travelers can
exert cost pressure, Racz noted employees
remain an organization’s most valuable re-
source. Companies owe a “duty of care” to
employees to ensure they’re as safe as pos-
sible. “That’s just part of the cost of doing
business—it’s just part of your security
platform,” she said.
It also depends where employees are
traveling, Racz said. Those visiting “high-
risk” destinations require more security,
and organizations can act to protect em-
ployees in high-risk places, for example by
providing them with pre-paid cards. That
way, infrequent travelers could avoid visit-
ing ATM machines or cashing traveler’s
cheques in dangerous locations.
Mobile technology like smart phones
helps organizations know where employ-
ees are, Racz said, and helps notify em-
ployees of overseas unrest so they can
make alternate travel plans if necessary.
“Mobile is going to be a very quickly
emerging tool to extend the duty of care
and provide some added comfort and secu-
rity,” she said.
Risk management can also involve cost
avoidance or recovery, noted Kell. Consider
payment fraud: the more internal controls
an organization has in place the less risk of
fraud or contractual woes. That’s especially
true for the meeting world, where employ-
ees sometimes sign contracts they shouldn’t.
“Those people may not realize that if they
cancel their meeting they’re still going to
have a 50-percent payment for that space,”
he said. “Managing contractual risks by in-
corporating that into your meetings policy
and having standard terms and conditions...
help eliminate costs, not create costs.”
While faced with new IT, evolving
policies and other challenges, opportuni-
ties to track and reduce spend in the travel
and meetings arena do exist. Technology
can help monitor where money is spent,
while virtual meetings and online booking
tools can add efficiency to the process.
Going forward, travel and procurement
professionals are in an excellent position to
benefit from these tools. TMC
“Visibilityisvery
dynamic. Ithink
we’realotfurther
aheadthanwe
weretwoyearsago.”
—JamesMoore
ROUNDTABLE