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Corporate Cards: Global Travel and Entertainment Card Programs Profile and Best Practices.
Corporate Cards: Global Travel and Entertainment Card Programs Profile and Best Practices.
Organizations that seek to maximize spend capture
in their T&E card program have found a valuable tool
that provides improved travel spend transparency and
supports informed decision-making that can directly
impact the organization’s bottom line.
1
Contents
Executive Summary
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . 2
Why is Maximizing Spend Capture Important . . . . 3to the Corporate Travel Program?
About the Study
About the Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Study Results
Profile and Practices of High Spend-Capture . . . . 5Programs vs . Lower Spend-Capture Program
Steps Programs Can Take to Increase . . . . . . . . . . 11Spend Capture
Conclusion
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
2
Executive Summary
In the case of travel spend, demand management
and more rigorous sourcing initiatives have been the
main drivers for these expense reductions . However,
the success of each of these channels is heavily
reliant upon access to accurate and timely data . To
fill this need, organizations are increasingly relying
on Travel and Entertainment (T&E) card data to
provide visibility into their overall spend .
Citi, in partnership with the Association of Corporate
Travel Executives, recently conducted an assessment
of global T&E card programs in order to understand
how organizations are using the data gained from
their T&E programs and to identify best practices
from highly successful programs . The survey data
showed clearly that a majority of corporate travel
departments are gaining maximum benefit by
capturing most of their travel spend, and therefore
travel spend data, through their corporate T&E cards
instead of less efficient and more costly alternatives,
such as personal cards, enhancing the creation of
useful business intelligence . However, it also revealed
that there are still a substantial number of
organizations underutilizing corporate T&E cards,
resulting in lower data capture thereby missing out
on opportunities to better manage traveler behavior
and leverage their spend with travel suppliers .
When reviewing the survey findings, some markers
emerged that distinguished organizations that
captured over 75% of their total travel spend from
those that captured less . Follow-up interviews were
held with selected respondents from the higher
spend capture group to assess their practices .
Findings from both research avenues are
summarized and address the following:
> Is there a relationship between single/multiple issuer card programs and spend capture?
> How does policy impact spend capture and visibility into travel data?
> What other practices do high-capture programs use?
> How are programs using the reporting and data captured?
> What initiatives are higher-capture programs planning to pursue in the next 12 months?
In addition, practical steps that travel programs can
take to increase spend capture began to emerge
from the survey results as well as from the in-depth
one-on-one interviews .
The ongoing financial crisis has led to fundamental changes in the
way that organizations view spending oversight . All areas, in particular
those that manage travel-related spend, have been asked to identify
opportunities for increased efficiencies and expense reductions .
3
Why is Maximizing Spend Capture Important to a Corporate Travel Program?
Complete data is actionable data . While Travel
Management Company (TMC) data is useful for many
purposes, it is generally incomplete and represents
only the pre-travel stage of the trip, leaving out
expenses incurred during travel, such as meals, taxis,
additional baggage fees, parking and various other
costs that are incurred throughout the trip . Programs
with high spend capture through a T&E card are able
to compare “booked” travel data to spend data to
ensure that travelers have made appropriate choices
related to preferred suppliers and negotiated air
fares and hotel rates . T&E card data offers a more
complete capture of total spend that empowers the
managed travel program to leverage a more robust
data set for vendor negotiations, enforce policy and
traveler behavior, and increase efficiencies through
automated data capture . Maximizing the use of the
T&E card not only improves opportunities for
analyzing travel policy effectiveness but also
provides increased savings through: (1) access to
meaningful and complete T&E data, which can be
leveraged for vendor negotiations; (2) automated
data capture, which reduces costs resulting from
manual keying errors; and (3) decreased costs
incurred due to fraud, misuse and out-of-compliance
expenditures through more simplified processes for
data analysis .
Additional key benefits that can result from
improving travel spend capture on the T&E card are:
> Greater transparency on rogue spending
> Enhanced visibility on travel program
performance with preferred suppliers
> Better spend data including ancillary spend
for all vendor categories
> Increased pre-population of spend data for
expense reporting — increased seamlessness
and convenience for traveler, as well as
decreased errors in reporting
> New opportunities to identify and establish
relationships with smaller/local vendors
> More effective crisis management tool for
locating travelers
> Identification of travel program aspects
requiring education/communication
> Enhanced support from the T&E card issuer
4
About the Study
An online survey was distributed to a global population of corporate travel managers resulting in
115 qualified results . Only responses from travel programs with minimum T&E spend capture of
at least 25% were considered for this study . Overall, the results show the distinctions between
higher capture and lower capture T&E card programs as well as the practices and behaviors
between these two groups .
Survey respondents represented a cross-section of travel programs based on size and the
location of their headquarters (see fig . 1 and fig . 2) .
Figure 1.
What is your company’s total annual global Travel &
Entertainment (T&E) spend in US dollars?
Less than $9 million 11.4%
US $10 million to US $24 million 26.0%
US $25 million to US $49 million 15.6%
US $50 million to US $99 million 14.0%
More than US $100 million 34.0%
Figure 2.
In what region is your headquarters located?
Asia 4.3%
Europe 26.0%
Latin America 1.7%
North America 68%
11.4%
26.0%
15.6%
14.0%
34.0%
4.3%
26.0%
1.7%
68.0%
5
Profile and Practices of High Spend-Capture Programs vs. Lower Spend-Capture Programs
While there were some key differences that emerged
between high spend-capture programs (defined as
those achieving a minimum of 75% travel spend
through their T&E cards) and lower spend-capture
programs, the survey found some similarities related
to their programs . A majority from both groups used
a single corporate card as their payment solution .
Organizations from different regions were included
in both groups with slightly more high spend-capture
respondents headquartered in North America (see
fig . 3 and fig . 4) .
Figure 3:
Does your organization have a corporate card
provider for T&E?
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture
Yes, more than one
Yes, only one
> 75% Capture
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture
Yes, more than one
Yes, only one
> 75% Capture
Figure 4:
In what region is your headquarters located?
North America
Latin America
EMEA
Asia
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture > 75% Capture
North America
Latin America
EMEA
Asia
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture > 75% Capture
A key point of divergence between the high-spend
and low-spend capture groups was in the geographic
scope of the T&E card program (see fig . 5) . Results
showed that higher spend-capture companies were
more likely to have a global T&E card program in
place . Having a global T&E card program may reflect
the maturity of the travel program, while its absence
may reflect relative immaturity and/or an early stage
in the travel program’s globalization and consolidation
efforts . The globalization path for many is one without
a final destination as companies evolve and corporate
footprints grow . When companies that had already
achieved a significant portion of spend capture
(> 75%) were interviewed, most had plans in place to
continue rolling out T&E card programs in the next
twelve months or to bring newly acquired businesses
into the program .
6
Figure 5:
What is your company’s total annual global
Travel & Entertainment (T&E) spend in
US dollars?
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture
More than US $100 million
US $50 million to US $99 million
> 75% Capture
US $25 million to US $49 million
US $10 million to US $24 million
Less than US $9 million
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture
More than US $100 million
US $50 million to US $99 million
> 75% Capture
US $25 million to US $49 million
US $10 million to US $24 million
Less than US $9 million
Survey results indicated that card program ownership
was nearly split between finance/treasury and
procurement departments as primary program
owners—the travel department was a distant third—
among the higher spend-capture group . By contrast,
almost half of the lower spend-capture group
indicated the travel department owned the T&E card
program (see fig . 6) . Survey results indicated that
finance/treasury and procurement may play a key role
in helping to yield better spend-capture performance .
Finance, treasury and procurement departments
often lead the charge in process improvement and
cost savings within the enterprise and it is logical to
assume they can influence the development of strong
T&E card programs to gain greater visibility and
control over their travel spend .
Figure 6:
Which department in your organization owns
the corporate card program?
Human Resources
Finance/Treasury
Travel
Procurement
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture > 75% Capture
Human Resources
Finance/Treasury
Travel
Procurement
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture > 75% Capture
7
Survey results did not indicate a direct correlation
between the number of employee travelers and
spend capture . Programs with high spend-capture
straddled the gamut of traveler populations with
almost as many programs counting fewer than 5,000
travelers as those with more than 5,000 . However,
the higher spend-capture group tended to have much
greater representation in the largest T&E spend
segment of $100,000,000 (see fig . 7) .
Figure 7:
What is your company’s total annual global
(T&E) spend in US dollars?
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture
More than US $100 million
US $50 million to US $99 million
> 75% Capture
US $25 million to US $49 million
US $10 million to US $24 million
Less than US $9 million
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture
More than US $100 million
US $50 million to US $99 million
> 75% Capture
US $25 million to US $49 million
US $10 million to US $24 million
Less than US $9 million
A significant differentiator between high and
low-spend capture programs lies with program
governance . According to the survey, companies in
the high spend group were more than twice as likely
to use a standardized policy across the entire
organization compared to companies in the low
spend-capture group (see fig . 8) . This aspect stands
out as a key factor in both the survey and follow-up
interviews related to spend capture success .
Complementing the influence of a standardized
policy as a contributor to better spend-capture is the
inclusion of consequences for non-compliance . The
higher spend-capture group was much more likely to
govern with consequences in response to policy
non-compliance than the other group (see fig . 9) .
Figure 8:
Which statement best describes the governance
of your corporate card program?
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture
There are no formal policies in place
Centralized: Standardized global policy implemented across the entire organization
Decentralized: Local policies and implementation allowed
> 75% Capture
Regional: Global policy that tolerates minimal regional customization
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture
There are no formal policies in place
Centralized: Standardized global policy implemented across the entire organization
Decentralized: Local policies and implementation allowed
> 75% Capture
Regional: Global policy that tolerates minimal regional customization
8
Figure 9:
What are the consequences of non-compliance
with your corporate policy?
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture > 75% Capture
Revocation of card privileges
Offenders reported to their line management
Non-reimbursement of expenses
No consequences
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture > 75% Capture
Revocation of card privileges
Offenders reported to their line management
Non-reimbursement of expenses
No consequences
Many organizations do not mandate policy either due
to corporate culture or legal issues where they
operate . Many high spend capture organizations
which were represented in the survey follow-up
interviews said their policies use tone and wording
that convey a high expectation for compliance
without using the term “mandate” . Consequences in
most of these companies were often deferred to the
employee’s line manager or dictated by regional
protocol . Rather than react to non-compliance in a
punitive manner, many travel managers and their
companies viewed non-compliance as an opportunity
for communication or re-education . Indeed, several
managers cited the importance of communicating
the benefits of the program to all stakeholders as
one of the first tasks when rolling out a T&E card
program . When the benefits of program compliance
are well understood by travelers, heavily-muscled “or
else” statements were often unnecessary .
Those who capture less than 75% of spend through
their card programs are unable to optimize the
benefits the cards deliver in terms of travel program
governance, leverage with suppliers and employee
convenience in expense reporting . Given the depth of
data obtained, it is no surprise to find that high
capture programs show a high reliance on corporate
card data and reporting for monitoring compliance
compared to the other group (see fig . 10) . With the
continued focus on demand management as a tool
for controlling travel spend, companies who fail to
capture significant spend through their card program
are missing an opportunity to rein in spend and risk
overlooking savings opportunities . The higher
spend-capture group’s use of T&E card data for
vendor negotiations and pre-population of expense
reports was also substantially higher than the lower
spend-capture group . While TMC data is used as a
primary source for vendor negotiations, interviews
revealed that more companies must use T&E card
data to understand their total spend among vendors,
particularly since the advent of airline ancillary fees .
Due to limitations related to the source of
TMC-provided data—which is typically limited to
booked, pre-trip data—T&E card data is a preferred
source for a window into total corporate spend for
the hotel and car categories as well .
9
Figure 10:
In what ways do you use the data files and
reporting provided by your corporate card
program? Please choose all that apply.
100%80%60%40%20%0%
> 75% Capture < 75 Capture
To pre-populate our expense management system
To negotiate better rates with key suppliers
To monitor compliance with corporate policies
100%80%60%40%20%0%
> 75% Capture < 75 Capture
To pre-populate our expense management system
To negotiate better rates with key suppliers
To monitor compliance with corporate policies
The survey revealed the group with higher-tier
spend-capture is focused on data integration as a key
priority in the next year . The lower capture group is
mainly looking at reconciliation processing, a basic
utilization of card data in the managed corporate
travel program (see fig . 11) . The inability to optimize
data capture inhibits the lower spend-capture group’s
success in maximizing the value provided by the card
program, which ultimately results in program savings
and efficiency . The access to complete and robust
data allows for more sophisticated analysis to
support: (1) improved compliance management; (2)
identification of spend patterns and savings
opportunities; (3) collection of complete vendor
spend for negotiation purposes; (4) planning and
budgeting; and (5) internal and external
benchmarking .
Figure 11:
With regard to your corporate card program,
what are the key priorities your organization will
focus on during the next 12 months?
100%80%60%40%20%0%
> 75% Capture < 75 Capture
Reconciliation processing
New market rollouts
Fraud protection
Data integration
100%80%60%40%20%0%
> 75% Capture < 75 Capture
To pre-populate our expense management system
To negotiate better rates with key suppliers
To monitor compliance with corporate policies
10
Finally, since data capture is the underpinning of so
many of the benefits T&E card programs provide, it is
not surprising to find a higher degree of satisfaction
from the higher spend-capture group compared to
the other group (see fig . 12) .
Figure 12:
Please indicate your level of satisfaction with
your organization’s corporate card program.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture > 75% Capture
Very Satisfied
Satisfied
Neutral
Somewhat Satisfied
Unsatisfied
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%< 75% Capture > 75% Capture
Very Satisfied
Satisfied
Neutral
Somewhat Satisfied
Unsatisfied
11
Steps Programs Can Take to Increase Spend Capture
Tactics that travel programs may use to increase
their spend capture through T&E cards were
collected primarily through interviews with high
performing T&E card programs and offer practical
suggestions regardless of where a T&E card
program falls on the capture spectrum.
1. Secure a champion for the T&E program
from senior management with influence
across the enterprise to sponsor the program
and communicate policy. According to the
manager of the T&E card program for a major
energy company, securing a champion was the
key factor in achieving compliance when the
program was implemented across 30 countries .
The MasterCard Travel and Entertainment
Best Practices Guide (another good source
of information) recommends providing an
introduction to policy written by C-level
executive, delivered by video conference, Web
communication, or other means to associate
management with policy . Research on Best
Practices commissioned by Visa in 2010 added
that sustaining senior management support by
providing program performance and savings
reports is key to the continued success of a card
program .
2. Define and communicate a standard expense
policy across the enterprise with stated
consequences for non-compliance. Imposing
penalties for non-compliance reinforces the
importance of policy compliance, which helps to
reduce the economic impact of non-compliance
and deter fraudulent and/or misuse of the card .
3. Implement a T&E program with the traveler
at its center that provides convenient,
consistent and supported experiences. Travel
managers from companies with high spend
capture who were interviewed all agree that
the T&E card must “work” for the traveler .
Programs that demonstrate a focus on travelers’
convenience and seamless experiences have a
distinct edge in getting buy-in from travelers
and achieving adoption goals .
4. Be a change agent and continually
communicate the benefits the T&E program
brings to all stakeholders. One travel director
from a Global 500 company emphasizes
the enhanced safety and security aspect
that T&E card usage brings in cases of crisis
management, as well as the savings that are
accrued to the company and travelers . Other
travel leaders focus on the convenience of
expense reporting when there is integration with
an expense reporting tool . Many T&E program
managers added that one must be prepared
to communicate benefits beyond the traveler
population across the enterprise .
5. Use expense policy non-compliance as an
opportunity to educate/communicate the
program and its benefits to employees
and vendors. Interviews with travel
managers showed that the consequences of
non-compliance varied among companies
depending upon their corporate culture .
However, across the spectrum of cultures,
non-compliance was seen as an opportunity
to reiterate the benefits that adhering to the
12
T&E program can bring . The Master Card Best
Practices Guide also cites the improvement of
vendor relationships when suppliers witness
proactive efforts to bring travelers into
alignment with travel policy .
6. Prescribe a preemptive process for travelers
to follow in cases where card acceptance
is low. One travel director with increasing
travel to areas of historically low card
acceptance has outlined steps that must be
taken related to restaurant spend, which is
the largest contributor to low spend capture
for her travelers . Travelers can easily access
information about which restaurants accept the
card in their destination cities and are instructed
to learn in advance if there is card acceptance
for any unlisted restaurant . Having these steps
in place helps to make non-acceptance a
non-issue in this developing region .
7. Integrate T&E cards with other travel tools
to increase seamlessness for travelers. Most
travel managers interviewed concurred that
traveler convenience is a critical factor for
encouraging traveler T&E card use . Ensuring
the card is seamlessly integrated into the
booking, trip experience and expense reporting
phases of travel provides travelers with
incentive for its use . Results from the 2009
Corporate Travel Card Benchmark Survey by
RMPG show companies with automated travel
expense reporting, prepopulated with card data,
decreased traveler reimbursement lengths by
27% and almost halved the time for travelers to
complete expense reports .
8. Utilize T&E providers’ analytic tools and
consultative services. T&E card providers
are ready and available to work with the travel
managers to identify the areas of spend that
are escaping capture, the low-hanging fruit for
improved capture and to suggest processes
and practices that will contribute to achieving
spend capture goals . The Visa Best Practices
research describes tools available from card
issuers that examine a company’s spend for card
program growth opportunities by identifying
spend patterns (including hotels, air, rail, car
rental, etc .) that results in strategic and tactical
planning development to support corporate card
program implementation or expansion .
9. Work with providers’ merchant acquisition
processes to increase merchant acceptance
among your program’s heavier spend vendors.
Travel managers interviewed cited the
successful efforts of their T&E card providers at
minimizing card non-acceptance as a challenge
in reaching spend capture goals . T&E card
providers offer processes for identification,
escalation and conversion of non-accepting
vendors . These efforts have an overall beneficial
effect on the T&E card program . Said one
travel manager of a global company, “When
an employee learns there is genuine effort to
address non-acceptance, there is an immediate
turn around in the employee’s perception
about the card provider’s interest in supporting
their travel .”
13
Conclusion
Travel programs that seek to maximize spend
capture in the T&E card program have found a
valuable tool which provides improved spend
transparency as well as access to the information
needed to make informed decisions that can impact
the organization’s bottom line .
The survey results and interviews demonstrate
that even those programs with higher levels
of spend-capture continue to raise their goals
for percentage of spend captured on T&E cards
and define tactics that lead to spend-capture
improvement . Clearly, the managers of these
programs understand the need to drive compliance,
collect better data and access rich reporting
tools as important activities for optimizing their
corporate travel program and enhancing their value
within the company . According to the 2009 RPMG
Corporate Travel Card Benchmark Survey, the
average company in North America puts 75 percent
of spending on a card, while best-in-class companies
are achieving 93 percent of spend on their cards .
For a company with $100 million in T&E spending,
the difference between average and best in class
represents an untapped $18 million opportunity
to improve usability of expense reporting, reduce
expense report fraud, and improve vendor
negotiations and policy compliance .
Managed travel programs must constantly prove
their value to all company stakeholders and in
tough economic times, they cannot afford to ignore
the opportunity to make the changes necessary to
improve the travel spend-capture through their T&E
card program .
References:
2009 RPMG Corporate Travel Card Benchmark Survey
MasterCard Travel and Entertainment Best Practices Guide
Best Practices/Visa Commercial Solutions
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