Unmanaged travel processes happen when a company doesn’t have a formal system or policy for overseeing travel. In this setup, employees book their flights, hotels, and transportation. They do not follow any standard guidelines. They might use travel agents or online booking platforms to arrange their trips independently.
At first glance, unmanaged business travel may seem more convenient. It offers employees greater flexibility and requires less oversight from the company. Skipping formal travel management might seem like it saves money. This is because it avoids the fees for outsourced travel services.
But is unmanaged travel genuinely cost-effective? This approach can lead to increased expenses that outweigh the perceived benefits. This blog focuses on the drawbacks of unmanaged travel and what you can do instead.
6 Drawbacks of Unmanaged Corporate Travel
1. Lack of Visibility and Control
One of the primary reasons unmanaged business travel is expensive is the lack of visibility and control over travel expenses. When employees book travel independently, the company cannot track or manage these expenditures. This often leads to:
Non-compliance with Travel Policies
Employees may book premium flights or stay at luxury hotels exceeding budget limits.
Missed Opportunities for Savings
Without oversight, companies miss out on bulk booking discounts, corporate rates, and other cost-saving opportunities.
Inconsistent Reporting
Discrepancies in travel expense reporting can lead to financial mismanagement.
2. Increased Administrative Burden
Unmanaged business travel increases the administrative burden on both employees and finance teams. Consider the time and effort required to:
Book Travel
Employees spend valuable hours searching for flights, hotels, and transportation options.
Process Expense Reports
Finance teams face a deluge of travel receipts and expense reports, often filled with errors and inconsistencies.
Reconcile Expenses
Manually reconciling travel expenses is time-consuming and prone to mistakes. It leads to potential errors.
3. Inefficiencies and Delays
Without a streamlined travel management process, inefficiencies and delays become inevitable. These can manifest in various ways:
Booking Complications
Last-minute bookings due to lack of planning can result in higher costs and limited options.
Travel Interruptions
Unmanaged travel plans are more susceptible to disruptions, causing delays and additional costs.
Lost Productivity
Time spent on travel arrangements and resolving issues detracts from employees’ core responsibilities.
4. Poor Traveler Experience
Employee satisfaction is crucial for productivity and retention. Unmanaged travel can negatively impact the traveler experience in several ways:
Stress and Fatigue
Unmanaged business travel can lead to stressful and exhausting journeys, affecting employee well-being and productivity.
Inconsistent Travel Quality
Employees may face varying service and accommodation quality levels without a standardized travel policy.
Lack of Support
Unmanaged corporate travel often means limited support for travelers during emergencies or disruptions.
5. Missed Data Insights
Data is a powerful tool for optimizing business travel, but unmanaged travel lacks the necessary data collection and analysis:
Spending Patterns
Without data, companies cannot identify spending patterns or areas where costs can be reduced.
Travel Trends
Understanding travel trends helps you negotiate better rates and make informed decisions.
Employee Preferences
Data insights can improve travel policies by aligning them with employee preferences and needs.
6. Ineffective Expense Management
Effective expense management is crucial for financial health. Unmanaged travel expenses often lead to:
Overlapping Expenses
Without a centralized system, there’s a higher risk of duplicate or overlapping expenses.
Delayed Reimbursements
In unmanaged business travel, employees may face delays in reimbursement, causing dissatisfaction and financial strain.
Budget Overruns
Uncontrolled spending can quickly escalate, leading to budget overruns and financial instability.
Suggested Read:
The Impact of Data Analytics for Smarter Decision-Making
How a Travel Management System Streamlines Your Business Travel Processes and Saves You Money?
Travel management software (TMS) is a specialized platform designed to streamline and automate business travel management. It enables organizations to plan, book, track, and analyze travel-related activities and expenses.
Moreover, it ensures compliance with company policies, optimizes costs, and enhances the overall travel experience. It streamlines business travel in the following ways.
1. Centralized Booking System
TMS ensures that all travel arrangements are made through a single platform, providing visibility and control over travel expenses.
Policy Compliance
The platform automatically enforces company policies during booking by displaying out-of-policy options in a separate tab. Employees who select these options are flagged and sent for further review by the relevant approver.
Negotiated Rates
Access to corporate rates and bulk booking discounts reduces overall travel costs. Without TMS, unmanaged business travel can lead to missed discounts and higher costs.
Integration Capabilities
TMS can connect with the software of other departments. For instance, integration with ERP makes financial management smoother by automating expense tracking, reports, and matching costs. Similarly, sync with HR systems keeps traveler information current, ensuring that travel plans are accurate
2. Automated Policy Enforcement
Employees booking travel with unmanaged corporate travel often overlook policy guidelines. However, travel management software enforces compliance. TMS can automate these processes:
Clear Guidelines
Define permissible travel expenses, preferred suppliers, and booking procedures.
Approval Workflows
Implement automated approval workflows to prevent unauthorized spending.
Regular Reviews
Periodically review and update the travel policy to reflect changing business needs and market conditions.
3. Expense Management Integration
TMS streamlines the expense reporting process, reducing administrative burden and improving accuracy. Features to look for include:
Automated Expense Reporting
Unmanaged business travel depends on employees manually submitting expense reports. TMS simplifies the reporting process with automated expense capture and categorization.
Receipt Management
Enable employees to upload receipts electronically, reducing paperwork and improving record-keeping.
Integration with Financial Systems
Seamless integration with accounting systems ensures accurate expense reconciliation and reporting.
4. Comprehensive Travel Support
Providing comprehensive travel support enhances the traveler experience and ensures their safety. Consider features like:
24/7 Assistance
The company providing the TMS offers round-the-clock assistance, ensuring travelers receive immediate support for disruptions, such as flight cancellations. This 24/7 availability minimizes stress, quickly resolves issues, and ensures travelers can continue their journeys smoothly
Traveler Tracking
Traveler tracking in TMS provides real-time updates on employee locations during their trips. This feature enhances safety by allowing travel managers to monitor where employees are at all times. If any issues arise, such as travel disruptions or emergencies, managers can quickly assist, ensure help is provided, and make necessary adjustments to the travel plans.
Pre-Travel Briefings
Pre-travel briefings in a TMS help employees prepare for their trips by providing necessary information. These briefings cover travel risks, like health or safety concerns, and offer advice on staying safe. They also include health updates and emergency contacts, ensuring employees are prepared and know what to do if issues arise.
5. Data Analytics and Reporting
Utilizing data analytics and reporting tools within TMS provides valuable insights into travel spending and trends. Unmanaged business travel may create inconsistencies in expense reporting, which TMS can automate. Benefits include:
Identifying Cost Savings
Analyze spending patterns to identify opportunities for cost reduction. Not available in unmanaged corporate travel.
Negotiating Better Rates
TMS uses data from past bookings to help negotiate better rates with suppliers. It looks at travel patterns and spending trends to determine where you spend the most. By leveraging bulk volume, TMS helps get better deals and lower prices.
Improving Travel Policies
Refine travel policies based on data-driven insights to align with business needs and employee preferences.
Suggested Read:
Benefits of itilite as Your Corporate Travel System
Make Your Business Travel Program More Efficient with itilite
Experience unmatched savings and efficiency with itilite travel management solution. Our transparent pricing and exclusive negotiated rates can cut your business travel costs by up to 30%.
You get the convenience of our all-in-one, user-friendly platform, where you can seamlessly book and manage every aspect of your travel in one place. With itilite, automated processes streamline your travel experience, including smart flight price reshop and hassle-free management of unused tickets.
Our dedicated customer support is available around the clock to assist you whenever needed. Transform your corporate travel management with itilite, where savings, simplicity, and support come together.
