Why Data Predicting Trumps Data Reporting

Predict What Matters Quick – name a travel metric that your CFO would pay a lot of money to predict reasonably well.

Next year’s travel savings? Maybe. Next year’s travel spend? Maybe.  But he won’t pick your firm’s future travel policy compliance rate, or next year’s average airfare, or your traveler’s future satisfaction with your online booking tool.

My point is that while firms spend a lot of money on travel data reporting, the core value that those pretty dashboards deliver is not very high – not in the grand scheme of your firm’s business.

Here’s why: Data reports are the result of the 20th-century management dictum “Measure what matters”.

Within the boundaries of a travel program there are dozens of things that matter.  And so we’ve figured out how to measure them. In order to report them.  In order to manage them.

But all those dials and gauges and stop lights really do is simply give you signals.  Signals that you have to interpret to keep your travel program  between the white lines of your side of the road.

What those travel dashboards don’t do is tell you how to get to a better travel program.

They can’t, because they have two big flaws:

  • Data reports are stuck in the past
  • Travel data reports are stuck in the world of travel

Gas Gauge vs. GPSSo that’s the data-driven solution to getting better travel programs – deal with the future, and deal with data well outside of travel.

Enter Predictive Analytics

The key is linking travel’s impact to business outcomes.  Outcomes that matter on a much bigger scale, like sales, customer satisfaction, employee attrition, health/safety costs, etc.

This will fundamentally change the way you view and manage a travel program.

Instead of seeking to minimize travel costs, you’ll be trying to maximize sales, or perhaps minimize employee turnover – by putting a travel program in place that clearly contributes to those goals.

If sales are trending down, or employee turnover is trending up, what should you, the travel manager do to help fix these problems?

Obviously, you’ll need some new lights on your dashboard – lights driven by data from Sales and HR.  More importantly, you’ll need to know how to impact those non-travel metrics.

That’s where predictive analytics comes in.  You need to have a data-driven understanding of how things like cabin policy and hotel tiers impact bigger, non-travel metrics like employee productivity, health and safety, and attrition.

You need to predict with confidence that by changing a variable in the travel policy, it will cost $X and improve the non-travel metric by Y%.

You’ll do this in one of two ways.  If your travel program is big enough, you’ll be able to mine your own data and build these models.  If your program is too small to offer enough data, you’ll depend on benchmarks and case studies from the larger firms.

Data Reporting vs. Predictive AnalyticsEither way, you’ll find yourself importing non-travel data into your travel dashboards, and exporting pro-active, fact-based advice on how to drive to your firm’s bigger goals.

Management theories evolve.  Dictums change.  It’s time to move on from measuring what matters to predicting what matters.

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Posted in Data, Metrics and KPIs, Travel Management | Tagged , | 1 Comment

Air Sourcing Moves Out of the Slow Lane

Horse-buggy vs CarsThe big bottleneck in airline sourcing projects is the time and cost of entering detailed airline contract terms.  That will soon change for the better.

Fayrnet, a product of Volaro, automates the loading of airline contracts into GDSs.

In speaking today with Patrick Healy, Volaro’s Director of Sales and Distribution, I discovered that this tool could  – and should – be easily adapted to handling corporate contracts and proposals from airlines.

Healy says it handles Category 25 and 35 fares (discounts off published fares, and fixed, aka flat, lane or zone fares, respectively).  The demo I saw quickly converted a typical Excel-based airline contract for dozens of fixed fares across a dozen points of sale in a matter of  a few minutes.

Let’s assume the tool works well.  The implications are clear:

  • Air sourcing project fees should come down.  This assumes Fayrnet can do the same job at a significantly lower price than a skilled analyst.  One of the most experienced analysts I know estimated that it could take ~ 30 hours to load a complicated Star alliance proposal for a multinational client.  Fayrnet claims to process simple contracts in minutes; complicated contracts will take a few hours, and may require special formatting.
  • Air contract analysis will be more accurate.  Automation reduces errors, right?  This should be good news for buyers, who have trouble spotting errors made by their analyst, and should give airlines more confidence that their complex bids have been entered correctly.
  • Air sourcing projects will take much, much less time from start to finish.  Most air consulting shops run a client’s proposals through the same analyst, so he or she is the bottleneck.  Using Fayrnet, the analyst can upload many contracts quickly, presumably even simultaneously.  Faster contract/bid loading means much shorter cycle times between negotiation rounds.

And for those star-gazers out there, here’s a not-so-wild-anymore prediction:

Automated contract loading will mean the end of airline sourcing as we know it.

Think dynamically-adjusted discounts based on weekly or monthly market share results, as decided by the airline.  Why spend time negotiating discounts and waiting months or quarters to see if the market shares materialize?

I think airlines will eventually get to dynamically pricing, or dynamically revenue-managing, individual corporate accounts.  Airlines see the market share data daily.  With automated contract loading, they can quickly adjust their discounts as needed to get more share, or better margins…why bother asking the buyer for a shaky “commitment”?

OK, that will strike many of you as far-fetched, but it has to get you thinking about the longer-term implications of the commercial relationship between airlines and travel buyers.

For now, let’s just be excited about the prospect of significantly improving a painful part of the travel procurement landscape. The combustion engine for airline sourcing is here.

NB1: I’ve asked Volaro for Fayrnet references, and will check them. I’ll report if they come in less than strong.

Update: I received two very favorable references for Fayrnet, and a third very favorable and unsolicited testimonial from a third customer.

NB2: I have no commercial interest in this product; just a fan of the potential for industry improvement.

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Posted in Airlines, Consultants, Travel Procurement | Tagged , , | Leave a comment

Traveler Friction, Part 1: Three Key Benchmarks

Road warriors are a hardy bunch.  tClara’s data on more than 100,000 travelers shows that each month road warriors often spend more than ten nights away from home, and spend more than 30 hours on planes.  Month after month, that adds up to a lot of wear and tear.

Most road warriors can handle it – for a while.  But sooner or later, all that travel-related wear and tear (aka traveler friction) builds up, and then the traveler burns out.

Burning out a road warrior is incredibly expensive, especially if the traveler is on the road producing revenue or serving high-value customers.  So it makes sense to look hard at what causes traveler friction, how it impacts a business, and what should done about it.

Benchmarking Traveler Friction’s 3 Key Drivers

It’s a simple equation:

Traveler Friction = Trip Quantity x (Travel Footprint + Trip Discomfort)

tClara has applied its patent-pending Trip Friction™ algorithm to over 500,000 trips from 100,000 travelers around the globe.  This means that firms can now objectively understand what their travelers are experiencing.

Continue reading

Posted in Travel Management, Trip Friction | Tagged , , | Leave a comment

Open Booking Takes Off With United

The corporate travel industry today took a big step toward making Open Booking a practical choice for travelers and travel managers.

United and Concur announced their intention to launch a TripLink-enabled booking path on United.com by the first quarter of 2015.  It will allow corporate travelers to obtain net-of-discount pricing, and have their reservations serviced online and by UAL’s reservation department.

Booking data will be automatically sent to the Concur platform, where it will be available to travel managers for further compliance monitoring and duty of care processing.

Folks, this is the hat trick of Open Booking – discounts, data and duty of care.

What’s not clear yet is how the TMC fits into this.   Continue reading

Posted in Managed Travel 2.0, Travel Management | Tagged , , , | 8 Comments

What’s Your Worst-ever Business Trip?

Trip KnotsYou know how travelers love to whinge and moan about their worst business trips, right?

It’s a popular cocktail party topic, and a harmless way to play a bit of one-upsmanship.  Sometimes it’s a way to stake out some sympathy from colleagues or customers.

With all those stories about trips from hell out there, I thought it would be fun to collect some of them – so my firm is launching a contest to do that.

tClara will pick the three best (worst, really) stories and give each winning author a $100 gift card.  We’ll publish the winning stories, and use them and some of the others to bring tClara’s concept of Trip Friction™ to life.  No individual or company names will be published – we’re not trying to embarass anyone or any firm.

Here’s the link to the contest:  My Worst-ever Business Trip Contest

If you know any travelers who love to trot out their favorite road warrior yarns, please share this with them.  The contest is open to anyone so long as they have a credible LinkedIn profile and write about a true business trip. The contest closes on July 11th.

To learn more about Trip Friction and traveler burnout, see tClara’s latest briefing deck or see these posts.  I’ll deliver a sponsored education session on Trip Friction at GBTA’s Convention on July 29th in Los Angeles.

Here’s wishing everyone less Trip Friction in your travels!

Posted in Traveler Friction | Tagged , , , | Leave a comment

Solving the Blah-Blah Travel Data Problem

Good-Bad Street SignTravel managers routinely rank travel data as one of their most important issues. Yet AirPlus recently reported that 56% of North American travel managers surveyed said they would not be willing to pay for better travel data.

OK, so let’s assume those buyers are reasonable folks.  How do we explain, then solve this conundrum?

Those buyers must not see much value – provable, hard dollar value – in “better” travel data.  I get that.  This industry has put up with mediocre travel data for so long that we’re used to ordinary, low-value, blah-blah data and data reporting. Continue reading

Posted in Data, Travel Management | Tagged , , , | 1 Comment

A Brighter Way to Measure Travel’s Impact

For the amount of money firms spend on travel, surely they’d like to know the impact. There is an incredibly practical – and pretty easy –  way to answer this question.

Forget about ROI – it’s too theoretical.  Skip Big Data – it’s irrelevant.  Instead, focus on what matters and what’s measurable.

Think about the issue this way: At what point is too much travel counter-productive?

Spend too much time on planes and you’re not selling.  Cross too many time zones and you’re not giving clients such good advice, or making such good decisions on that oil rig. Take too many redeyes in coach and you’re seeing a doctor for a cranky neck or worse, deep vein thrombosis.

It’s about cause and effect; travel and impact. So the approach is simple.

First, identify the road warriors in your firm, and their business unit leaders.  Ask those business unit leaders which business metrics matter, and might be affected by too much travel, and are measurable.  Think sales, hours billed, customer satisfaction, safety, etc.

Go to HR, and ask which HR metrics matter, and might be affected by too much travel, and are measurable.  Think absenteeism, engagement, disability costs, retention, etc.

Now use your travel data to find a comparable group of employees that has done much less travel than your road warrior group.  So now you have a cohort of low-travel employees and a cohort of high-travel employees.

We’re almost there.  With a bit of analytical muscle, measure each cohort’s average result on each metric.  Then compare the two groups, testing for statistical differences. Something like this, perhaps:

Slide2

Voila!  You now have a fact-driven analysis of travel’s impact.  The impact on your business, and the impact on your people. The implications will be clear.

Too much turnover, absenteeism and disability costs among your high-travel group?  Cut back their travel workload and/or loosen your travel policies for the road warriors.

No meaningful differences between the two groups?  Your travel policies are probably fine, but then what is all that extra, possibly excessive, travel really doing for your firm?

Either way, having these facts gives travel managers, HR executives and business leaders a clear-eyed view of travel’s impact.  Making solid business cases for changing travel workloads, travel budgets and travel policies is now ever so much easier.

The best part?  Travel category managers get to lead on this issue.  For you folks that are frustrated by delivering diminishing returns from mature sourcing and policy compliance, you should be first in line to drive this type of study in your organization.

For those interested in jump-starting a travel impact study, tClara and I can help.  We can quickly score your travelers’ Trip Friction™ levels, create the cohorts, and benchmark your firm’s travel intensity to those in our database.

I’ll be at the ACTE Global Conference in Miami at the end of this month, and hope to connect with many of you there.

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Posted in Metrics and KPIs, Sustainable Travel, Travel Management, Travel Policy, Traveler Friction | Tagged , , , | 6 Comments

Identifying Travel-related Retention Risks

?????????Who can say when a traveler has reached that dreary destination of travel burnout?

It’s a very individual issue, yes?  For some, it may take years of constant hopping from terminal to taxi, while others may arrive after a few weeks of  run-of-the-mill trips, but are suffering the consequences of way too many problems piling up at home.

I knew I was in travel burnout land when, after a few months of intense travel, the sight of my suitcase made me cringe.

Fortunately, there’s a better way to identify travelers at risk of burnout, without having to flash pictures of carry-ons in front of them and look for signs of dread.

My firm, tClara, is scoring traveler itineraries with Trip Friction™ points.  The goal is to create a proxy for the wear and tear travelers incur during their trips.

Why bother?  Because all that travel-related wear and tear eventually creates real costs.  Productivity costs.  Health care and even disability costs.  Lower employee engagement levels.  And eventually the toughest one – employee turnover.

Our industry needs a good metric, a new KPI, to shine a light on this hidden cost of too much travel. Without such a metric, I don’t see how you can truly claim to optimize a travel program…but that’s another story.  Here’s our approach to measuring traveler wear and tear: Continue reading

Posted in Travel Management, Travel Procurement, Traveler Friction | Tagged , , | 4 Comments

Road Warrior Burnout: A Worthy Problem

Too much travel can cause anybody a load of stress.   Exhibit A is Brad Feld, one of Silicon Valley’s best-known angel/venture capitalists.  He lives in Colorado and was traveling 50-75% of the time.   He hit a wall.  Knew he couldn’t keep it up and still lead an emotionally healthy life.

His solution?  He quit traveling for business – cold turkey.  The Harvard Business Review interviewed him here, and Brad writes about it here.   Not traveling seems to be working for him.

The question is, how many of your firm’s road warriors are in danger of hitting this kind of wall?  The consequences can’t be good.

An Alarming “What If”

Imagine if the top ten percent of your frequent travelers called a long-term strike on business travel, like Brad Feld did.  What would happen to your customer relationships,  business development, staff development, collaboration, innovation, etc, etc.? Not to mention the cost of replacing those no-more-travelers  with folks who will travel a lot (or so they say).

What Are The Signs?

Surely your frequent travelers make up some, maybe much of your firm’s top-rated talent.  So who is watching for the early warning signs of traveler burnout?  Who even knows what those signs are?

And if you see those early warning signs, what’s the right response – less travel? Better quality or less stressful travel? Travel recovery days? Dinner for two on the company’s dime?

Who Owns The Problem? Continue reading

Posted in Managed Travel 2.0, Metrics and KPIs, Travel Management, Travel Policy, Traveler Friction | Tagged , , , , | 1 Comment

Turning the Open Booking Lights On

Lights Off, Lights OnGood debates require good definitions.  The polarizing phrase “Open Booking” is a case in point.  It has at least two very different meanings.

A popular interpretation of Open Booking has travelers booking outside the approved corporate channel, with no responsibility to get their booking data back to their company. This is truly “rogue” booking behavior.

Rogue bookings undermine a travel program’s ability to manage duty of care, and to collect important information in a timely manner.  The travel manager is very much in the dark about these travelers and their spend.  Call this “Open Booking, Lights Off”.

The less understood version of Open Booking comes from the principles of Managed Travel 2.0  Specifically, the one that says “Let travelers book anywhere – so long as the company gets the data quickly.”

It’s that last phrase that requires the booking be done in  such a way that the company gets timely visibility of the booking.  Call this “Open Booking, Lights On”.

Some 40-50% of corporate hotel bookings are done in the dark.  That’s a big black hole of spend and traveler location data.  This black hole isn’t being resolved by traditional means.

How is failing to address this well-known and persistent  problem not a dereliction of duty of care?

Travel managers must find a way to turn bright lights on to this problem.  It’s a question of how, not why.

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Posted in Managed Travel 2.0, Travel Management | Tagged , , | 5 Comments