Data is the oil of the digital age. It holds untold potential and is a valuable resource for all kinds of businesses. If utilized effectively, it can be a useful tool that significantly improves the prospects of a business.
Companies the world over could really benefit from taking a deep dive into the available data and use it to increase the efficiency of their business. Leveraging our expertise in cost management, the AirPlus Global will look at things from a payment angle.
There is a surprising amount of data that can be gathered from spending reports. Beyond knowing where the money is going and how much is being spent for each category, businesses can greatly improve how efficiently they operate when it comes to, say, travel payments or procurement.
How data is important for cost management
First, it is worth knowing why data is so valuable when it comes to managing costs accrued by a business.
While little information can be extrapolated from an individual payment, when you start to consider the volume of payments made by businesses every week, month or year, it is possible to start seeing trends and patterns. It is at this scale that useful insights can be made.
The issue is, however, that there are numerous payments being made of different amounts to different providers. This makes it easy to lose track of the bigger picture.
In the end, it all comes down to the reporting. What use is data if it is not comprehensible or actionable?
Being able to breakdown costs into the different channels and categories makes this information more relevant for a business. This is how it can then be leveraged to manage costs. Having this transparency is a gift that keeps on giving.
Now, in terms of actual applications, there are a few ways in which this data can be utilized to increase efficiency.
Acting on inefficiencies helps keep businesses lean. Cutting unnecessary costs and bloat from the budget is crucial to surviving in an increasingly dynamic global market. To achieve this, however, it helps to have the details laid out in front of you to truly grasp the situation.
Having a more holistic overview will allow you to identify areas of improvement across the company. Once you have the bigger picture, you can then start to home in on discrepancies.
For example, you could look closely at your business’ travel policy, and start weeding out expenses that are non-compliant to keep the travel budget in check.
There are many small optimizations like this that can be made over time, which will add up to significant savings. That is the main takeaway here – you are not likely to find any one significant inefficiency in the business. Instead, it is a few things here and a few more there.
Perhaps the biggest cost-saving measure this data can bring about is the ability to negotiate terms. Having data at hand when beginning with proceedings will give businesses an upper hand when in talks with hotels, rental services and more..
Knowing how often you have used their services and how much you have paid will give you leverage on negotiating a deal together and building a relationship between your brands. While the other business gains a loyal customer, you will be able to save on costs.
It comes down to showing the value your business provides to them, and then outlining how further cooperation would be beneficial to both sides. As you can imagine, this is much easier to argue when you have concrete evidence at hand.
Data-driven decision making
Making changes in a business is hard at the best of times, but hurdles like the pandemic make it that much more difficult. In the end though, there will never be a perfect time to make changes.
So, with that in mind, the best time to make decisions is when you have quality data to base them on.
Whether it comes down to better allocation of spending, clearer invoices, or overall better understanding of expenses, taking the time for an in-depth look at the available transaction data can greatly benefit a business.
Meeting sustainability targets
Every business should have some sort of plan when it comes to their approach to sustainability. With the likes of ESG finance and data, it is becoming easier than ever to get a true picture over who is and isn't being proactive.
Consider using data to not only meet expectations, but surpass them. Carbon offsetting is one way to go about this, or otherwise consider your approach to business travel. Even just a switch like taking the train on your next business trip could make all the difference. You just need to look at the data.
Other ways to incorporate data in your business
Not every business will benefit directly in these ways from the use of data. However, there are still other ways in which data can be used in your business – maybe not for efficiency, but for a better understanding of your travelers.
Travel managers, for example, can use information they collect to understand travelers at their business. They can investigate areas of improvement or even just better allocate resources as needed. Just knowing this information is important for bookkeeping and reporting, after all.
Weaponize your data
In the end, whether you make use of it or not, you will be keeping track of expenses in your business. Does it not make sense to utilize this to add extra value? Even just having an overview can make a difference.
However, it is then up to you to decide how these changes are implemented in your business. Only once you act on these insights can you start to truly reap the rewards.
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[i] Banner photo by Lukas Blazek on Unsplash