T&E – Strategic Cost or Investment Spend? New Study

business travel

End-to-end business travel technology company, Paris-based KDS, whose solution is used across Europe and the US, last month announced the results of a study it carried out on travel and expense (T&E) management. T&E, it says, is widely considered to represent the second-largest category of operating costs for a company, and according to the recent study, 88% of companies include travel expenses in their definition of T&E.

The study took place towards the end of last year and, while findings were primarily geared towards Finance, it has some interesting outcomes from procurement too. The procurement voice accounted for 19% of the 616 budget managers responsible for T&E spend interviewed across France, Germany, United Kingdom, Sweden, Finland and Norway.

As a general finding, Finance teams across Europe see T&E spend as strategic, rather than a necessary cost. 44% of mid-size to large companies believe it enables business growth and  while most understand the need to optimise T&E management to achieve strategic and cost benefits, poor access to data and cost concerns are what they see as holding them back. So Finance teams are asking for more integrated, automated T&E tools to optimise travel spend.

From a procurement perspective, of the purchasing organisations surveyed, the following findings came out on top:

  • 60% of procurement managers believe T&E expenditure is a necessary cost for a company, while 39% said it is a major enabler to the company’s development/growth.
  • 86% of procurement managers believe that the current T&E spend category can be better optimised or controlled to support their business objectives.
  • Over half (56%) of procurement managers only adequately manage between 30%-50% of their T&E budget.
  • 66% of procurement managers say their company is to ‘a great extent’ more compliant to their business obligations thanks to the implementation of automated T&E processes.
  • 32% of procurement managers say a fully integrated and automated T&E solution will help to better drive their strategic business decisions.
  • 50% of procurement managers say that having a single provider for an end-to-end TMC & T&E solution would be beneficial to their organisation.

CEO of KDS, Roxana Bressy, said: “Our research supports a well-known trend within industry – data and the insights effective analysis can provide are important in making strategic business decisions. What’s interesting is to see how travel and expense data can be particularly strategic, especially for procurement managers. They need complete and accurate data to be able to better negotiate the right supplier contracts to support effective T&E policies. This is only possible if the systems they use for this capture data from both the travel and expense processes. Using separate tools hinders this capacity. That’s why one-third of them prefer fully integrated solutions.”

“There’s a clear consensus that an optimised process and format for analysing T&E data is becoming a core component for driving business insights. As a result, more and more procurement managers are turning to integrated solutions to achieve this and position themselves as strategic partners to their business.”

More information on the report can be found here.

And the full report is here.

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