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The Association of Corporate Travel Executives is holding education events worldwide IN 2009, concerning new technologies, demand management and ways to cut costs
2009-03-20
In the Northern Hemisphere, spring is just weeks away and with it a renewed hope for better, and brighter, days ahead.
Where many predict a dismal year for the global economy, the Association of Corporate Travel Executives (ACTE) sees opportunity and potential. ACTE will offer one of its most ambitious curriculums to date reflecting a need from the industry for more focused education, particularly in light of the current economic climate. The association will hold 57 education events in 2009 in the seven regions it serves: Africa, Asia-Pacific, Canada, Europe, Latin America, Middle East and the United States. This includes two Global Education Conferences in the United States and Europe; three regional conferences in Asia-Pacific, Latin America and Canada, and 52 educational forums throughout the world.
With the underlying theme of “Strategize to Save Money, Travel to Make Money,” at all ACTE global education events this year, the association’s efforts will concentrate on bringing the industry effective strategies and tools to navigate the rocky economic terrain.
Mark your calendars for the two ACTE Global Education Conferences this year. The first will be held in Washington, D.C., 5-7 April and the second in beautiful Prague, 25-27 October. These events are not to be missed. It is especially during challenging times that one needs to acquire new skills, gain fresh insights and broaden one’s network – that is what an ACTE conference offers. Please go to the ACTE website (www.acte.org) to register.
Many companies will be using demand management as a means to reduce their costs this year. This communication tool applies to video conferencing, telepresencing, and teleconferencing technologies that are most often utilized for internal meetings, and as a complement to air travel programs. Not only does demand management save companies money, it also makes them more efficient as more employees are using their time for work instead of travel. The following article will give you an overview of how you can make this technology work for you and your company.
When we look back on 2009, may it be with a sense of accomplishment and satisfaction that we were able to weather the worst by giving our best – and succeeding.
Demand management: the quiet revolution in the business travel industry
Few sounds are as difficult to hear as the crash of a global economy. Yet regardless of the sound it makes, the final result is usually the same for the business travel industry as companies begin a mad dash to conserve finances by reducing travel.
The function of the travel manager is to reduce excessive travel from the start. Therefore, it is to be assumed that the travel that is being cut is essential to something. The question is: Is it essential to making money?
How dramatic can the travel budget cutbacks be? In a recent ACTE global survey of 208 respondents, 71 percent of business travel managers said they will spend less in 2009 than they did last year; 50 percent said they would be looking at travel alternatives, and 47 percent they are looking to cut back on internal meetings.
Yet challenging the strategy of simply slashing travel or instituting frustrating parameters is “demand management.” This is a versatile concept that has a specialized meaning (that changes subtly) in economics, environmental issues, and in resource consumption. For business travel, its definition was adopted from the procurement side. Essentially, it means managing business travel to fit the most expedient needs of a corporation or organization – without compromising pre-established budget parameters.
As more businesses look for ways to reduce their business travel costs, as well as their environmental footprint, meetings alternatives such as videoconferencing, telepresencing and web conferencing are being utilized as an integral part of a company’s demand management strategy.
These systems should not completely eliminate business travel for sales meetings, initial presentations, or special trips requiring ranking representation, and the majority of companies will continue to use demand management as a complement to their air travel programs. However, they can free up millions of dollars, euros, yen, and pesos by dramatically curtailing unnecessary business travel. And this is money that can be used to fund revenue-generating travel that would normally be cut in financially challenging times.
It is essential that these systems be introduced by the travel department and managed by them, as well as be directly tied-in with an overall corporate travel strategy. Otherwise, system misuse or abuse could lead to lost opportunities, misunderstandings, and a drop in revenue.
The concept requires business travel managers to evaluate each trip in terms of a potential return. Some are attempting to refine a blanket formula in which a trip is deemed necessary if it will generate at least twice its cost in new value, or preserve a corporate relationship worth many times that. Others simply take a broader view that meetings with customers or potential sources of revenue are allowed and anything else is not.
Progressive companies (41 percent of respondents to the ACTE 2009 Travel Spend Survey said that technology was a priority in meeting their company’s travel objectives) can now extend the definition of “demand management” to include sophisticated electronic business travel alternatives. Doing so has allowed some to shave of 15 percent of their travel budgets, and others to save as much as $10 million over the cost of the equipment and training – in one year.
And you don’t have to be a huge corporation to make “demand management” work for you.
Years ago, electronic meetings were cumbersome affairs, incorporating super expensive studio arrangements and satellite downlinks. Now they can be as simple as a Google document sharing program or a basic video chat program, and as slick as an electronic corporate meeting centre or a wall that is a constant open link with another corporate office. They all have one thing in common: they eliminate some aspect of business travel. Specifically, they eliminate the need to buy tickets, pay for hotel rooms, fund surface transportation, and other ancillary services associated with a trip.
Typically, these are internal meetings. It is no secret that some companies have determined 40 percent of their overall travel is for internal meetings. Yet the majority of these meetings can be conducted at a fraction of the cost online, with zero loss of productivity. An engineer from one corporate giant based in Europe now uses the meeting software for departmental meetings – within the same building! He claims it eliminates the need for design team members to leave their small offices – where they have easy access to figures, drawings, and other data – to meet in the equally small office of a colleague.
In this one example, there lies an important clue regarding the implementation of an electronic travel alternative: It is easy to use.
The implementation of this software requires several things, including broad bandwidth, a computer-savvy corporate culture, and an impetus to make the switch. The last two are quickly becoming insignificant as factors. A number of business people now routinely use their laptops for all levels of business, leisure activities, and social networking. Many of their recently acquired laptops come with a basic variety of this software already bundled into a package. As far as incentive or impetus is concerned, the fact that you are offering executives a way to avoid hours lost at airports, in delays, and in traffic, is guaranteed to be well received. Plus it minimizes the investment of traveller’s personal time, for which there is no adequate compensation.
There are other considerations too. Software of this nature makes it possible to reach decisions in minutes instead of days or weeks. It is now possible to hold meetings in “high risk” parts of the world without sending key personnel into hazardous situations. Significant travel cost avoidance is on the front end and not lost in collection.
Another benefit of demand management, for those with Corporate Social Responsibility charters, is that the technology is carbon low.
The adoption of demand management is inevitable. In previous years, more relaxed financial times brought a return to more relaxed travel policies. This will no longer be the case. There will be no going back for a company that has found a way to shave 15 to 20 percent off its travel budget in troubled times, let alone in better days. And business travellers who will be freed from the endless trips to the world’s whistle stops are not likely to look back wistfully either. The travel manager that introduces this system, and makes it work, will be revered as a corporate hero. Those who ignore demand management do so at their professional peril.
