Today, the economic environment gives CFOs the ability to push compliance and to make policies more stringent. Employers are now more likely to require travelers to use a low-cost carrier, or to book flights that require a stop, and can expect far less grumbling than in the past. "All of a sudden, a stringent travel policy is not something to complain about but is instead seen as sound strategy," says Raj Singh, president of Concur, a maker of travel-management software.
For companies with software that guides employees through the booking process, there are numerous automated ways to encourage compliance. One of the most popular approaches uses what Sedky of American Express calls "visual guilt." When employees begin planning a trip, the software will show which carriers and flights are in-policy and which are not. Some companies configure their systems to require an employee to get approval before booking out of policy, while others simply show the employee that there are cheaper options. "When you notify someone that there are alternatives, they feel like they have to do the right thing," says Sedky. American Express has found that such visual guilt-tripping can save companies 10 to 20 percent of their total travel cost.
The increased urgency about controlling travel costs also means that for those rebellious folks who try to book direct, business-class flights on unapproved airlines regardless of policy, there can be consequences. "There's a company we've worked with that says if you do not book within policy, we'll cancel your reservation and send you an E-mail saying the reservation was not in policy," says Eastlund. "It's kind of harsh, but it works for this company." Some systems also alert managers to an employee's transgression.
Over a Barrel
After wringing as much savings as possible from improving internal policies, CFOs can then turn to those outside the organization — specifically, the airlines themselves. "CFOs are saying, 'The last time I negotiated my corporate rate, oil was $140 a barrel. Now, it's $40 a barrel.' The world is completely different than it was six or nine months ago," says Singh. That means it's time for finance executives to renegotiate with their preferred airlines.
While small companies may not have much success making themselves heard, even those with as few as 100 employees who travel frequently can improve their rates. "If you're a consulting firm with a bunch of people who burn the carpet between Seattle and San Francisco, you can sit down with Alaska Airlines or United Airlines and say, 'I have this many seats; what can you do for me?'" says Singh. Carefully tracking the number of trips and amount spent on the airline can bolster the CFO's argument, as can data comparing the cost of flying the same route on different airlines.
For now, many companies are still trying to ensure that their rainmaking salespeople can fly to see clients and their internal auditors can perform occasional site visits, although these trips are becoming less glamorous than ever. Should this latest round of cost-saving measures fail, however, there could be more changes to come. "If the economy continues as it is, we may have to consider more draconian measures, like a travel ban," says SVP's Moore. "But we're not there yet."
Kate O'Sullivan is a senior writer at CFO.
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