Procurement or Finance: Reporting Structures for Travel Buyers in The Wire…from AirPlus

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While travel buyers indicate a variety of reporting structures within their organizations, priorities are in lockstep for the practice of travel management.

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In the past 10 years, the practice of travel management has broadly evolved to incorporate more disciplined procurement practices, ranging from greater internal scrutiny of how travel dollars are spent to better capture and analysis of data and how that information is applied to supplier negotiation, contracting and management. That said procurement itself has not wholly taken on travel management. In fact, according to the latest edition of The Wire…from AirPlus, finance controls travel management more often than procurement. However, no matter what department is responsible for the travel category, the priorities of travel management remain the same: controlling costs and ensuring traveler safety and security.

According to the survey (nearly 50 percent of respondents reported annual travel spend above $10 million and 20 percent reported spend above $50 million):

  •     31.8% of travel programs report through procurement
  •     44.7% of travel programs report through finance
  •     10.6% of travel programs report through human resources
  •     11.8% of travel programs report through “other” departments, including corporate operations (4%) and administration/corporate services (3%)
  •     1.2% of travel programs report directly to the CEO

A key differentiator of organizational structure is the travel program’s size. Companies with larger spend were more likely to report through procurement:

  •     44% of travel programs with annual spend of more than $25 million report through procurement
  •     16% of travel programs with annual spend of more than $25 million report through finance
  •     47% of travel programs with annual spend of $5 million to $25 million report through finance

A further goal of the study was to determine if reporting structure influenced program priorities.

However, results indicate that to not be the case: regardless of organization structure, travel management professionals showed very similar top priorities across the board.

On a scale of one to five, cost control proved the top priority for programs, followed by duty of care:

  •     Cost control: 4.13
  •     Traveler safety / security: 3.84
  •     Supplier management: 3.42
  •     Technology integration / data capture: 3.42
  •     Revenue growth / sales: 3.01
  •     ROI of business travel: 3.18
  •     Employee retention / traveler centricity: 2.81
  •     Virtual travel alternatives: 2.51
  •     Green / environmental issues: 2.19

Of note, variances began to appear after the top two priorities of cost control and duty of care based on reporting structure. For example, the use of virtual travel alternatives (often considered a work-life balance issue) received only slight attention from travel programs reporting through human resources. Only 11 percent of programs reporting through HR rating this factor as a “significant” influence and none rated it as a “heavy” influence. In contrast, nearly 20 percent of programs reporting through procurement noted the issue as a “significant” influence. Additionally of note, more than two-thirds of travel programs surveyed, who report through HR, manage travel programs of $25 million in annual spend or more, meaning that size of the program was not a significant factor.

An additional surprise result was that travel programs reporting through procurement showed more concern with employee retention / traveler centric policies than buyers reporting through either finance or HR.

The Wire...from AirPlus is a monthly pulse report for the business travel industry on timely and relevant topics.

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Peter Kane
@AirPlus_NA
since: 02/2013
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