There are certain areas of procurement that all too often remain their own fiefdoms – sometimes effective, sometimes not – with little influence or management from center-led or overall functional leadership. Travel is one of these areas. But the opportunity to drive savings from better managing travel spend – and even to generate income through rebate programs – is significant indeed. The Q2 Accenture Spend Trends Report highlights a handful of travel savings opportunities including suggesting more active programs to source corporate cards (including p-cards).
The authors note that recent market (sourcing) activity in this area is up and “based on the savings opportunity and increasing competition in the space, now is an excellent time to explore this area.” The opportunity goes back to sourcing 101 – companies simply don’t benchmark pricing frequently enough through competitive processes. Specifically, “Most companies make a corporate card decision and stick with it for years without competitively sourcing the category, and for that reason alone, current deals may be uncompetitive and re-sourcing the category can deliver substantial savings.”
How should companies take action? Accenture recommends pursuing a program that benchmarks card pricing and taking “advantage of the current environment.” Such activity should be as close to a procurement no-brainer as possible because “relative to other options in the travel area, changing card providers is a relatively low friction change to implement, and across large dollar volumes, small per-transaction savings can generate millions in savings opportunity.”
Elsewhere in the brief, the Accenture team also begins to explore the T&E solution opportunity. This is a topic we’ve started to cover more at Spend Matters and would encourage our subscribers and readers to check out the latest from our coverage of Concur (which has dominant share in the market).
Stay tuned for additional coverage of Accenture’s research.