ACTE Forum: “white collars” are at risk!
Nowadays corporate travel executives are focused not on purchase efficiency, but on the traveller`s satisfaction during his business trip and his compliance with the travel program. This talking point announced by regional ACTE Director in Europe, Middle East and Africa Caroline Allen as a global trend of the travel industry was the point of departure for ACTE Forum. The event was held in Azimut Hotel Olympic Moscow on March 29.
As the expert noted, in the next two years corporate buyers would pay special attention to the introduction of mobile technologies as well. She recommended including this substantial cost item into budgets in advance.
In Ms Allen`s words, we are heading for a real revolution caused by the emergence of the new 5G generation of mobile communication. By 2035 the platform will provide 22 million jobs, it will be the pillar of Internet of things, mission critical systems (MCS), augmented and virtual reality (AR and VR).
Other Caroline`s advice to forum participants was to be ready to correct the travel policy, for example, concerning share economy services, and to focus on employee safety provision during a business trip. The expert reminded the participants that some airlines had already forbidden taking notepads and tablets to the cabin. In her opinion, this trend would expand even further.
Dream and reality
What is the way to set the right priorities when you develop a travel program? Head of travel purchase in Kaspersky Lab Irina Kostyukova devoted her speech to the topic. The expert advised to look into the terminology first of all, because the notion of a “travel program” was sometimes confused with a “travel policy”. “A travel program is a kind of travel management, tooled for the needs and the strategy of a certain company. It is a set of measures and steps aimed to make the travel process and the travel budget controllable”, Ms Kostyukova explained.
A travel program is based on three cornerstones. The first is policies, for example, a travel policy, a card usage policy, a T&E policy or a meetings policy. The second is processes, such as the document flow, data management, duty of care, introduction of technologies and payment solutions, communication with travellers. The third is providers the company may have direct agreements with: air carriers, hotels, agencies, transfer companies, IT providers and others.
And where is the cherished cost saving in this set of values? “If we look at the travel program as a causal model, all the above mentioned will be causes, leading one way or another to two basic consequences, or goals: either control and economy, or employee satisfaction during a business trip and insurance of his safety”, Irina said.
What is more important – the money or the traveller? Every company has its values. Ms Kostyukova presented a chart named “Dream”, where both goals are achieved proportionally. But in “Reality” we face the reverse progression, as a rule. Say, if a company is aimed at achieving maximum economy, travellers are forced to book the lowest fare available – consequently, the level of employee satisfaction drops.
“Our company is closer to the traveller`s comfort. Our travel policy is very flexible, and economy is achieved mainly by conclusion of direct contracts”, Irina added.
The speaker stressed that you should aim at a scenario, when the achievement of one goal leads to the achievement of the other one as well. She brought the example of V-payment introduction – virtual credit cards created for one transaction only, that had been used in the company to pay for hotel accommodation since the previous year. “Our hotel program used to be very unpopular with business travellers. The problem was that the employee had to pay for the hotel room he had booked at the corporate rate, directly in the hotel. He had to use his personal card where the advance payment was transferred. Nobody liked this scheme, especially as hotels sometimes block a deposit on the card. Now virtual cards are used to pay for almost 40% of bookings – both employees are satisfied, and the program adoption rate has increased”, Irina Kostyukova said.
The expert also stressed that it was important not just to develop a travel policy, but to get travellers interested in its observance. This is why nowadays you can hear more and more often about a “travel manager`s communications strategy”, and not just a “procurement strategy”!
Procurement manager Julia Zakharova spoke about the ways communication with travellers was organized in Saint-Gobain Russia & CIS. In 2016 when the corporation was looking for the ways to optimize travel costs, it analyzed travel data for the previous three years. It turned out that travellers did not observe the advance ticket purchase rule and chose the hotel not only based on its location, but according to their personal preferences.
A number of tools were developed by the company to explain the importance of the travel policy to the employees. They included infographics on internal resources, monthly meetings with heads of departments. “In Russian mentality the boss`s word is a law. This is why we also asked our general director to write an article on the need to treat the company`s costs as your own ones”, Julia shared her experience.
Feedback had allowed to improve the service: the travellers assessed transport services with the help of SurveyMonkey opinion poll, a mobile application or a short message after the trip. The survey of traveller satisfaction with other providers` services was held by the TMC every quarter.
“In order to receive information without delay and to make immediate changes in the travel program, in 2017 we plan to add a feedback form into the advance report in 1C that the travellers fill in right after their business trip”, Ms Zakharova said.
She also recommended communicating with business travellers directly – for example, to make random calls to the staff and to share information with colleagues on what changes will be made following the results of the opinion poll and in what time.
Efficiency – to assess and to measure!
Business growth is the breeding ground you can grow a more efficient travel program on, Elza Abadovskaya, administrative manager of Medtronic is convinced. The merger of two companies, Medtronic and Covidien, started in 2014 and was over last year. The integration helped Covidien where bank transfers with a credit line of 60 days had prevailed to switch to a modern BTA payment system already adopted by Medtronic. A more convenient business trip approval system was borrowed – all the requests were approved not by the implant office, but by the financial business partner. At the same time travellers were granted more freedom in their choice of an airport or a hotel on condition limits were observed. “Economy is extremely important, but when integration is carried out in a short period of time, it is necessary to make employees feel they are cared about”, the speaker stressed.
At the moment the company continues working on the hotel program, direct agreements with airlines, receiving feedback. Other projects include introduction of a global duty of care program.
And what is the way to measure KPIs of business travel agencies? Gayane Kocharyan, travel manager of service purchase department of MTS told the participants how it was done in the company – they compared all the three TMCs they work with. Efficiency indices included analytical report quality, frequency of use of the corporate online booking tool and the number of hidden payments revealed.
The expert dwelled on the efficiency index of the hotel program. Agencies were not eager to work with it, because direct agreements implied no commission rates for them. “So we compare the program usage percentage rate”, Ms Kocharyan shared her experience.
Tatyana Molter from MaxiMICE noted that hotels were the main source of revenue for the agencies at the moment, because ticket sales had ceased to bring them profit. This is why the expert advised companies to include the number of hotels in the program and their booking frequency into the tender. It would allow the business travel company to make a preliminary assessment of its prospective profit or losses resulting from cooperation with the customer.
Robots are coming!
What are humankind`s prospects at the threshold of the artificial intelligence era? Svetlana Denikina, editor-in-chief of BBT Russia suggested giving it some thought. Robots had already become indispensable in almost all the branches of industry, agriculture, services and even health.
“Machines are approaching professions that require high qualification. Let`s take stock exchange market, for example. At the turn on the 21st century almost 150 thousand financial experts worked in Wall Street. By 2013 this number reduced by more than 100 thousand, while both transaction volumes and industry revenues were highest ever. “White collars are at risk”, Svetlana stressed.
The expert stressed that due to machine learning algorithms had learned to create algorithms, i.e. to self-improve. Machine learning technology is used in our smart phones, online translators, speech and picture recognition applications: “And now we are not the only creators in the universe. Nowadays robots write symphonies, discover fundamental edicts of nature”. An example of artificial intellect outdoing the man was the victory of Watson supercomputer by IBM in 2011 in Jeopardy! TV show (analogue of Svoya Igra). “It is not pure mathematics in this case. This game involves a virtually unlimited bulk of knowledge, it requires complicated skills of language understanding, including jokes and pun”, Svetlana noted.
What will our future be like? Optimists believe technological advance will facilitate economic growth and will lead to the reduction of poverty. Realists call at least to reconsider one of the basic beliefs about technologies: the fact that machines are a tool to increase workforce productivity. Machines have turned into workforce themselves already, and this process will only gain momentum. In 2013 researchers from Oxford University studied 700 professions and specialties in the USA and came to the conclusion that almost 50% of jobs would be fully automated in the coming years. But it is even not the worst scenario.
In 2014 theoretical physicist Stephen Hawking wrote an article trying to draw public attention to the danger the rapid advance of artificial intelligence may pose. A computer that will excel human intellect will be able to “outgame everyone in financial markets, surpass human researchers in their inventive activity and develop the types of weapons we cannot even think of”.
The advent of technological singularity is quite probable - a break in mankind`s advance in technological progress that will be hard to comprehend till the very moment it takes place. Such a development model can be compared to astronomers` attempts to look into the black hole. The first machine having the real intellect will be created in 2020 according to Ray Kurzweil, a futurist and an inventor. The advent of singularity may take place approximately in 2045.
General manager of City Travel Julia Manuilova spoke about the ways artificial intellect would change the landscape of the business travel market. She started her speech from an experiment. Julia suggested the participants imagined a situation: two hours before the gala dinner you are told that you will have 1,7 kg of food instead of 2,2, and the hot plate will be stewed vegetables instead of meat, while 90% of event participants are men. What will you do? Forum participants suggested absolutely different solutions: from meal orders in the nearest restaurants to making healthy lifestyle the topic of the event.
“Experts who are involved in the same activities are always expected to make consistent and sustained decisions. But people are not machines. There are always “noises” – factors affecting the range of decisions, be it weather, mood, or hunger, as well as distortions – movement in the opposite direction from the goal. They are inevitable, which has been proved by research”, Julia drew everyone`s attention to this fact.
Inconsistency in decision making by people affects corporate costs. “You may remember situations when you sent a request to a TMC and it was managed by two different employees by mistake, and the result was different. The main advantage of algorithms is their insusceptibility to “noises”. A formula, unlike a human, gives the same result in the same situation”, Ms Manuilova explained.
In the expert`s words, companies` decision to start using algorithms and automation is hastened not only by their wish to avoid the influence of “noises”, but also by the fourth industrial revolution – companies compete for the opportunity to be the first to bring a new product or a new service to the market and to win customer loyalty.
What influence will artificial intelligence exert on business travel? According to expert estimate, in the next five years customers will use OBT to make 80% of operations to arrange their business trips. In the next two-three years a 100% transfer to electronic document flow is inevitable. “The process of staff recruitment and dismissal will also be automated – by means of stands to hand in and hand out and employment record books, and electronic application filing. The influence of purchase departments is likely to decrease – algorithms will take decisions to choose a provider instead of them.
Visa Product director Aleksey Breshin, in his turn, dwelled on the use of corporate cards by companies as a payment solution. “Their number is growing – it has increased twice for the past two years on average. As well as the number of transactions, but an average purchase size has decreased almost twice since the beginning of 2015. At the same time, large business travel agencies are quite well off”, is Mr Breshin`s opinion.
Aleksey told the participants about cost assignment of non-cash transactions made with Visa cards for the past two years. Thus, more than a half of foreign transactions (52%) fell in the lodging category.
The expert noted that the Russian business travel market had shown remarkable growth for the previous 15 years, expanding by 12,7% per year on average. Thus, in 2014 Russian companies spent almost $21 billion on business travel. The industry turnover is expected to increase by 4,4% in the next five years.
Not a mere caprice anymore?
Bleisure, is it a challenge or a new opportunity? It is definitely a global trend. In Caroline Allen`s words, 48% of corporate travel executives note an increase in employees` expectations regarding their work/life ratio. Travellers ask more and more often whether they may combine a business trip and a holiday (42%) or whether they may take their family with them (28%). This is why many foreign corporations have already adjusted their travel policies to these requests.
Panel discussion participants tried to figure out what bleisure was in the Russian market. Sales director of Accor Hotels Anton Coronelli supposes that the phenomenon of combining the personal and the business is far from new. The expert remembered the film “Business Romance” in which the discussion was about employees going shopping during their lunch hour.
Mr Coronelli suggested regarding bleisure on three levels. First of all, from the point of view of a certain traveller, who wants to “adjust” his business trip to his personal tasks. Second, from the point of view of the product. For example, an opportunity to use corporate hotel rates for personal trips. Third, from the point of view of travel control arrangement.
“The loyalty program may become an element enhancing your travel program”, the expert is convinced. “When the traveller uses corporate rates, he gets points for himself, and the company provides the necessary purchase volume”.
As Julia Manuilova noted, privileges were not for everyone. Most Russian corporations, unlike western ones, have not learned to determine what additional value business travellers bring. At the moment the attitude to bleisure depends on the branch of industry to a large extent – for example, bank employees and IT staff have more opportunities to combine a holiday and a business trip, as a rule.
And Andrey Voronin, the owner of ATH American Express GBT business travel agency admitted: although he is all for bleisure, nonetheless, he does not see this trend in Russia. “In western countries employees indulge in a lot of things, because they are trusted. In Russian companies you can rather note a trend to control and stop violations. For example, some employees deliberately plan their business trip in such a way that it ends on the weekend, intending to get an extra payment or a compensation with extra days off”, the expert said.
Besides, in our country there are many obstacles on the way to bleisure. Thus, if the date when the business trip is over does not correspond to the date of return, problems with accounting appear.
The participants also noted that some companies were against bleisure, because travelling with the family is an obstacle to the timely choice of a flight and a hotel, quick document filing, and all this results in the increase in business travel costs. Besides, the company should ensure employee`s safety during the whole trip.
“You know, bleisure sounds like caprice. Many Russian companies still regard this phenomenon in this way, unfortunately. But everything changes very quickly in this world”, Mr Voronin summed up.
And Svetlana Malysheva, chief business travel expert of Sibur is convinced: there is the bleisure trend in Russia, but companies do not know yet how to account for trips like that. Because a business trip has a clear definition in the federal law, and it does not include family members. “We are waiting for experts with case studies – how to combine a business trip and a holiday in bookkeeping and tax accounting. The algorithm will be found sooner or later!”.