The Convenient Fiction of Program Optimization

Second in a series on Managed Travel 2.0 based on my keynote speech at the Beat Live.

Travel program optimization.  It sounds so desirable, doesn’t it? A worthy goal. A complicated process. A successful achievement.

“Program optimization” is a phrase deeply embedded in every TMC sales pitch. It’s a phrase that travel managers put at the top of their strategic goals.

It’s a phrase that’s nothing more than a convenient fiction.  Convenient because we really want to believe it can be delivered.  Fiction because it can’t.  At least not in the way we usually think about it.

TMCs and Travel Managers Don’t Have the Full Picture

Here’s the optimization problem: Companies want to get the most value from their travel spend.  That means maximizing the gap between a trip’s expected value and it’s total cost. A trip’s total cost is the sum of the trip’s expense plus the cost of the trip’s traveler friction.

So now we see the source of the fiction.  TMCs and travel/procurement managers don’t know two key pieces of the puzzle.  They don’t know the trip’s Continue reading