Why Small & Midsize Enterprises are Set to Transform Corporate Travel
SMEs don't have the budgets or time to make do with traditional travel management companies. Where will they turn?
(A version of this article was originally published by Business Travel News)
There's an old saying that you don't get fired for buying IBM. But whoever said that obviously never worked at a small or midsize enterprise, where people are always ready to toss out the status quo, especially if there's a more modern, more cost-effective solution on the horizon. While large companies were still relying on outdated collaboration tools and on-premise marketing customer relationship management platforms, SMEs started switching to cheaper, nimbler options like Slack and HubSpot in droves.
So what area of the business world will SMEs transform next?
For my money, it's corporate travel management. The business travel industry exhibits all the hallmarks of a target that's ripe for disruption: It's a massive market, expected to reach $1.7 trillion globally by 2022, that represents a huge pain point for many companies and is dominated by heavy, expensive solutions that aren't designed for the specific needs of SMEs.
Large companies may be fine with the status quo, but SMEs are already starting to buckle under the strain. Lola recently surveyed more than 1,500 people responsible for managing employee travel at their companies—small, large and everything in between—and the answers made one thing abundantly clear: SMEs are ready to rethink corporate travel. Those managing travel at SMEs are 60 percent more likely than their counterparts at large companies to say they have the ability to effect change in their travel policies. SMEs are 50 percent more likely to give travelers flexibility when they book and 22 percent more likely to increase their investment in corporate travel management tools in the next two years.
Taken together, these data points suggest that SMEs are ready to remake corporate travel in their image: more agile, powered by better tech and with more SME-friendly pricing models. How is this transformation likely to play out?
Employee-friendly policies. The standard corporate travel policy was made with one thing in mind: the business. These policies are designed to keep employee travel consistent by enforcing uniform guidelines and keeping tight controls on spending and options. This is all well and good, but it minimizes an important part of the equation: the preferences and productivity needs of travelers.
Nothing is more important to the success of SMEs than productive, effective employees, so it's no surprise that companies at this stage are more likely to create travel programs that take employee preferences into account. Paying a bit more for direct flights or conveniently located hotels might not always be possible within the travel policies at large companies, but SMEs will work hard to make those options available to travelers.
But even flexible guidelines aren't enough. SMEs know that they need to take steps to keep their employees productive while they're on the road, and increasingly, this means supporting travelers with agile travel management technology.
More support. Nothing is more important to SMEs than time, and this laser focus on efficiency doesn't stop at the home office. SME travelers need to stay productive even, or especially, while they're on the road. Navigating airline and hotel phone trees trying to reschedule flights is not high on their priority lists. Of course, this is similarly true for employees at large companies, but those organizations are more likely to have a different set of solutions in place for this problem: a dedicated travel manager, say, or an outsourced corporate travel agent.
Scrappy SMEs, though, need a more lightweight, budget-friendly solution, and I expect they increasingly will turn to economical software solutions that incorporate 24/7 text-based support from live agents. Many SMEs that can't invest in dedicated travel managers find they can get the same level of support from software that connects them to shared, trained travel specialists.
But easy access to cost-effective live agents isn't the only thing SMEs need from the new wave of corporate travel management software. They need intuitive tech that makes it easy for them to book, manage and expense travel without hamstringing their productivity.
Better tech. The surest thing to come is travel software that travelers actually want to use. As consumer travel tech improves, workers have become accustomed to intuitive, mobile-friendly tools like Kayak, and they're starting to expect this level of functionality from the software they use in their workplace. Institutional inertia may delay large enterprises from switching to the new generation of travel tools, but SMEs feel the pain more acutely and typically have fewer organizational hurdles to clear on the road to procuring new tools.
It's these two facts that make me so confident that SMEs will bring about the corporate travel management revolution. They're maniacally focused on enabling employees to work more efficiently and they are early adopters in the world of business technology.
It's impossible to predict exactly how corporate travel management will look in 10 years, but there's much more certainty about who will be driving the changes. SMEs don't have the patience—or inertia—to put up with clunky, inflexible travel solutions, and it's just a matter of time before they start taking action. Well, they already are.
How does your corporate travel policy stack up?
Posted byMike Baker