Written by AirPlus CEO Oliver Wagner
I have never seen digitization progress so quickly as in the past few months. Virtual meetings, but also digital payment, are now commonplace, even here in Germany, the country of the world's travel champions and probably the biggest advocate of cash. A year ago, all this would have been hard to imagine and it shows me that the corona crisis is not only having a widespread economic influence, but that it is also having an enormous impact on our behavior. But what does this development mean for our industry?
We are currently seeing many companies developing strategies for virtual collaboration - which may not at first seem to bode well for companies specializing in business travel. While virtual working was simply essential for survival at the beginning of the pandemic, it is now both an everyday reality and a future strategy. This strategic approach is understandable; after all, compared to the 2008 financial crisis, far more companies are affected financially this time around, worldwide, so that almost everyone is currently having to make cuts, and not only in the area of business travel. So what could be more obvious than to focus more on digital topics that help to cut costs? Cost reduction is currently the most important factor for companies, and this will certainly be the case for some time to come, even after corona.
Costs are decisive
Nevertheless, I remain optimistic. More of our meetings in the future will be virtual, but I am convinced that fewer companies will actually completely forgo travel as they’ve announced. After all, a personal meeting on site is often the best way to work together and initiate or intensify business. In my opinion, however, the question of costs is decisive for the return of the business trip – assuming the journeys are safe and there are no health risks. So if we help companies to further optimize their business travel processes, the willingness to travel will increase again.
One for all
But how can we help companies in this difficult environment to reduce or better control expenses? This question can usually only be answered by one person: the travel manager. The travel manager is already the central interface in the company and works closely with other departments in the company, such as HR, IT and data protection, on many issues ranging from travel security to payment solutions. They always come into play when complex issues need to be simplified: The finance department, for example, expects integrated end-to-end processes, the management expects cost efficiency, and the travelers themselves naturally also have demands and expectations, for example, to be able to travel comfortably or pay quickly, easily, and digitally.
For the travel manager, this is daily business. They have to meet all expectations in the company, optimize processes, and sometimes even make them possible in the first place. This is in the nature of their job, or better said, in their expertise and the way they work. Only they know the important tools that provide reliable data, which in turn serve as the basis for successful negotiations. And only they use tools that enable the optimization of payment processes, reduce costs and perform strategic analyses.
View on e-commerce
But this knowledge also offers them the opportunity to identify savings potential for the entire company.
Nowhere more so than with the topic of procurement. It is well known that there is always potential for reducing costs, especially in the area of e-commerce. Provided you use the right methods and tools. Let me give you an example: Most online suppliers, whether they sell software, image material, studies, event tickets or similar, nowadays want to be paid immediately online. But this is exactly where companies often lack the necessary know-how and the right analysis and payment tools. Many things often cannot be handled via the company's existing purchasing system.
The corona crisis shows how great the demand in this area actually is. After all, how are employees supposed to pay for professional expenses while working from home, for instance when buying electronic accessories like headsets or software?
Travel managers know the answer: different payments are also incurred for business trips, whether when booking a flight, train, or rental car or for hotel accommodation. In many companies, centralized accounting options are already standard and considered a prime example for other purchasing services in the company. Again and again, we have been asked by our customers whether such solutions as those for travel expenses could not also be used in the procurement area. We have now closed this gap with AirPlus Virtual Cards Procurement. With AirPlus Virtual Cards, we have been offering virtual payment very successfully since 2005, but so far mainly in the area of travel expense management. The transaction volume here has had double-digit growth every year. The volume of payments for hotel accommodations alone increased by 24 percent in the pre-corona year 2019.
A secure solution
But how should we imagine this kind of payment? For each transaction, the company generates a virtual credit card – with worldwide acceptance thanks to the global Mastercard network. All transactions are then billed centrally and bundled in a collective invoice. This is efficient and saves process costs. This gives companies complete control over all expenditures with high security standards and lean processes, not only for travel services but now also for other expenditures. Invoice data can be provided with information such as cost center and order number and then quickly and easily integrated into existing financial and controlling systems. Digitization saves costs here too. The whole thing is not at the expense of security: the virtual card numbers can be restricted by companies for a specific purpose, a fixed limit, a currency and a period of use.
The example of procurement shows that travel managers can provide valuable impulses not only for their own area of business travel, but also for other tasks within the company.
In the corona crisis, travel managers have become experts in demand in many respects. And this is despite the fact that there is currently less travel than ever before.
Written by AirPlus CEO Oliver Wagner
[i] Banner photo by Headway on Unsplash