Business travel can be profitable with Big Data
Companies need to measure the effectiveness of travel programmes and expenses through data
Data science presents immense opportunities to transform the way businesses operate and help them gain a competitive advantage.
But not many have harnessed the power of data like Google or Amazon.
The business travel sector is an interesting case in point. A US$1.2 trillion (S$1.6 trillion) industry globally, business travel spending in Singapore is projected to grow 4.3 per cent to S$17.2 billion in 2017, and 2.4 per cent annually to S$21.7 billion by 2027, according to a report by the World Travel and Tourism Council and Travelport.
But it is not about the data itself. It is about how companies use that information to improve their travel programmes to benefit both the company and the traveller.
Many companies spend hundreds of millions of dollars on business travel every year, with hardly any way to measure return on investment (ROI).
The trouble is that travel data is still viewed in a vacuum. The focus on costs means people look at travel budgets as just the cost of a plane ticket, hotel and taxi.
Which is not to disparage cost control - travel and procurement managers are typically very good at managing costs.
But you cannot look at the ROI on travel through such a narrow lens.
Companies need to start combining traditional travel data (hotel, air and other expenses) with human resources (HR), corporate finance and non-traditional data sources.
Business travel should be viewed in the context of operations, revenue streams and human impact - not just cost. And organisations need to understand how business travel helps their corporate strategy.
The first question has to be: Why is this person travelling?
There are good reasons: to gain or impart knowledge, to close deals, to work on collaborative projects. Everything else can be handled by e-mail, phone, or video conferencing.
By combining travel data with other types of data, you can begin to understand the true cost of a business trip versus the value it generates.
You can also start looking into travellers' productivity.
For example, an average business trip is seven hours of travelling with transit. That's a lot of time. With HR data, this can be converted into salary, which gives you a fairly accurate cost per hour of travel.
Taking a holistic view of data can benefit a business in other ways, too. It brings a whole new way of addressing employee well-being. HR can begin to see the impact that travel policies have on employees.
They can look into the relationship between business travel and employee illness, productivity or staff turnover.
They can then take action - such as giving employees time off after certain business trips. It also sheds new light on career management.
For example, the data show that for women, business travel increases early in their career, as they gain experience.
It then flattens out around the age of 30, about the time they have young children. Interestingly, business trips by women drop dramatically after 55.
One could search for the rationale - HR directors still do.
But there is a real concern that talented and skilled people who used to travel when it was hard for them to juggle their busy professional and personal lives, suddenly stop travelling just when the company could use their experience.
The barrier is cultural. It involves travel managers engaging with divisions across the company to build a complete picture.
It means travel data has to be read differently and opened up to other parties such as HR, sales and financial departments.
It's about bringing together separate interests and creating new key performance indicators or KPIs to measure the effectiveness of travel programmes.
The writers are from Carlson Wagonlit Travel. Andrew Jordan is chief technology officer, and Eric Tyree is chief data scientist. This article was published in The Business Times on Nov 29.