tcg consulting © copyright 2006, tcg consulting, llp. all rights reserved.1 travel policy revisited...

TCGCONSULTING

© Copyright 2006, TCG Consulting, LLP. All rights reserved. 1

Travel Policy RevisitedTravel Policy RevisitedTravel Policy RevisitedTravel Policy Revisited

Barry Rogers, Senior Consultant / Engagement Manager, TCG ConsultingDetroit, Michigan – October 13, 2006

TCGCONSULTING © Copyright 2006, TCG Consulting, LLP. All rights reserved.2

Agenda

• Introduction• Best practices – brief presentation• Discussion – everybody participates• Summary


Introduction to TCG Consulting• Taras Consulting Group established in 1994 – privately held

– Changed name to TCG Consulting – 1999– Headquartered in Charlotte, North Carolina– Offices: Chicago, Los Angeles, Detroit, Orlando– Dedicated Resources: Europe, Asia-Pacific, Latin America

• Services:– Assessment and Benchmarking– Sourcing– Implementation– Compliance management

• Categories– Travel– Payment Systems– Expense Management

• No conflicts of interest– No ties to agencies or suppliers, no revenue from agencies or suppliers

• Proprietary and market leading technology• Project experience in 68 countries on 6 continents – at last

count• Milliken & Company - Global Supplier of the Year


Travel Program – Consulting Perspective

Assessment Strategy

Arrangements

Air Travel

Lodging

Ground

Payment

Meals & Entertainment

Reimbursement

Travel Program

Sourcing Implementation Management

P

O

L

I

C

Y


Best Practices – Travel Policy Overview

• Travel policy can be more difficult to enforce than other policies

• Travel policy should be introduced by CEO or other senior executive

• The message should be clear• The audience should be clear• The policy should be available

– Intranet– Employee manual– Integrated into self-booking tool– In the hands of travel agents


Best Practices – Travel Policy Language

• Be clear• Criteria Requirements

Consequences

• “From time-to-time employees will be required to travel on company business. In order to be reimbursed for any expenditures made on behalf of the company, employees are required to adhere to the following policies and procedures.”


Best Practices – Pre-trip Approval

• Strongly encouraged– By level

• Should be equivalent to other signing authority

• Should be done pre-booking• Should relate to purpose of trip

– For a typical company, 70% of all travel is for employees going to meet with other employees

• Should actually be performed– Don’t set up a rubber-stamp approval process


Best Practices – Travel Arrangements• “Employees are required to make all travel

arrangements, including air, car and hotel, through one of the following channels:

• “For domestic travel involving a round trip, employees are required to make arrangements using <online tool>.

• “For international travel, and travel involving multiple destinations, employees are encouraged, but not required, to make arrangements using <online tool>. Travel arrangements may be made by calling our designated travel agency at <agency phone no>.

• “No reimbursement will be made for travel arranged through other means except in an emergency (see policy on emergency bookings below).”


Best Practices – Air Travel• “Employees are required to book domestic travel in

economy class at the lowest logical airfare (defined below). Officers (including the Chairman, President and Executive Vice presidents) may book domestic travel in first class.”

• “Employees are required to book international travel in economy class at the lowest logical airfare (defined below).Business class may be booked on a particular segment if that segment involves six or more hours from scheduled departure to scheduled arrival and a discounted, negotiated fare is available. Officers may book international travel in business class whether a discount is available or not. In no cases may employees book international travel in first class.”


Best Practices – Air Travel

• “Lowest Logical Airfare: Least expensive fare for non-stop travel on a designated preferred airline at times that allow the employee to achieve their business objective. Connecting service must be utilized if the round trip fare is $200 or more below the least expensive non-stop fare.

“Non-preferred airlines must be utilized if the round trip fare is $200 or more below the least expensive fare on a preferred airline.”


Best Practices – Ground Transportation

• Taxis– Major area of abuse– Define criteria for using taxis– Disallow where hotel shuttles are available– Make “self filled” receipts an exception– Define limits for tips

• Rental cars– Disallow where hotel shuttles are available– Disallow at-counter upgrades– Require employees to refill if returning more

than one hour before departure


Best Practices – Ground Transportation

• Parking– Define criteria for airport parking (must be less

than alternate transportation to/from airport).– Define criteria for hotel parking (is car sitting in

a hotel garage or parking lot for four days at $20 per day?)


Best Practices – Meals / Entertainment

• Alcohol– If you don’t deal with it, you could be liable– Be very restrictive in your policy– Allow it in limited quantity while entertaining

clients– Disallow it for employee meals (particularly

lunch)– Specifically disallow drinking and driving

• One-day trips– Define criteria for reimbursement

• Bottled water / Coffee / Miscellaneous – Increasing spend on these items


Best Practices – Post-trip Approval

• Should include all information– If approver sees electronic expense report without

receipts, cannot evaluate expenses

• Should actually be performed– Don’t set up a rubber-stamp approval process

• Be specific on consequences– Reminders– Delay in reimbursement– Non-reimbursement– Employee files– Require pre-trip approvals– Termination

• Electronic expense vendors are offering audit services

TCGCONSULTING


Drivers for ChangeDrivers for ChangeDrivers for ChangeDrivers for Change

Group Participation Time


Drivers for Change in Travel Policy

• Sarbanes-Oxley• Security Concerns• Economic Impact• Travel Industry Dynamics• Corporate Experience• Technological Advances• Globalization• Progress


Sarbanes-Oxley

• Requires transparency• Executive “perks”

– Non-business items– Spousal travel– Vacation travel – agency fees

• Requires certification of financials


Security Concerns

• Role of corporate security has increased within travel– Terrorism, natural disasters, health risks– Post 9/11

• Requirement to book through agency• Requirement to book international hotels

through agency – or at least notify agency of 3rd-party booking

• Requirement to make all changes through agency

– Impacted by interface to iJet (and other) services


Economic Impact• Companies are looking to reduce

operating expenses• Define financial objectives and work them

into the policy– Understand what you’re trying to achieve

• Many areas of opportunity– Airfare– Ground transportation– Hotel– Other, miscellaneous items

• Alternatives to travel are becoming increasingly realistic


Travel Industry Dynamics

• Airline discounts are increasing– Because fares are going up– But so are market share requirements

• Dynamic pricing in the hotel industry• Are making clear cut rules more difficult


Corporate Experience

• Areas of abuse– Taxis and tips – remain the leaders

• Areas of education– Coffee and bottled water– Parking– Car upgrades– Hotel upgrades– Refueling – when returning a car 2 hours

before flight?


Technological Advances

• Pre-trip Approval has become easier• Tie booking to expenses to reimbursement• Maybe well look at pre-approved smart

cards someday

• “GetThere … announced today that 35 percent of its UK customers are now mandating use of corporate self-booking tools. The company predicts that by 2007 the figure will have reached 50 percent”


Globalization

• Rationalize policies across borders• Look for consistency – where appropriate• Look to set up minimum standards across

the company– With cultural and business practice sensitivity

on a country-by-country basis


Progress

• Also known as Constant Improvement• Make travel policy a living document

– Update it regularly, but not constantly– Review your entire policy annually– People need to be able to absorb change

• Make sure the policy makes sense• Make sure employees are aware of it

– Highlight changes or areas of concern in a cover memo

TCGCONSULTING


SummarySummarySummarySummary

Thank you

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