5 reasons why Duty of Care in Indian business travel programs is non-existent !!
Business Travel Duty of Care is largely ignored by Indian CXO’s who pay scant attention to this aspect, given their exclusive focus on cost/ fee minimization. As the premier business travel consultant in India and emerging markets, ProKonsul has evaluated over 250 programs in the last 5 years. With some exceptions, there is very little CXO oversight to managed travel programs.
Despite being recognized worldwide for their talent and business acumen, it is surprising how shortsighted Indian CXO’s have been when it comes to their business travel programs.
Most of CXO’s regard business travel as more an act of fulfillment and purchase. Priorities like strategy, technology best practice & due diligence to limit corporate liability, are largely ignored. In addition, the effective cost rises due the opacity of legacy operational models.
CXO's have ceded total control to their travel gatekeepers, who have limited ability to introduce best practices and ideate innovation internally. The approach hence becomes one targeted at perpetuating the status quo.
Overall program hygiene is a low priority. Indian business travel programs focus excessively on the lowest ticket cost / lowest fees.
There are some exceptions, but honestly, they are still few and far between. These include Global MNC’s who have a globally consolidated travel program in India & some Indian transnationals. These organizations have evolved their travel program to include traveler risk & duty of care.
1.Working with Travel Agencies V/s TMC’s
Most companies in India execute their corporate travel programs with “Travel Agencies “ and not “Travel Management Companies (TMC’s”).
“Travel Agencies’ - are generally non-specialists in the business travel domain & generally win business largely on price/location & relationship attributes. They don’t deliver the full range of managed business travel services. These agencies could also be ticketing consolidators or tour operators for whom corporate ticketing is a useful add-on.
2.Highest focus on lowest fees
The most important KRA of most Indian travel administrators & travel sourcing departments is fee & ticket price minimization. Travel agencies / TMC’s are appointed based on the lowest transaction fee pricing or the highest levels of discount. Many of our travel managers & procurement professionals place a far higher value on fee pricing rather than the qualitative aspects of their vendors' capabilities like
- Strategic account management
- Cost optimization
- Risk management
- Management reporting
3. Managing travel using the “IT/ ITES Industry ” model
The IT / ITES industry, who should be leaders in best practice implementation, have sub-optimal travel programs. They follow a very unique business travel operating model. They put each travel request out to “bid” amongst multiple travel agencies / TMC. In this situation, the lowest bidder wins the ticket and fulfills it.
This places in question, how they ensure data consolidation of all tickets purchased through different vendors & track their employee, amongst multiple other areas.
4. Hotel reservations disaggregated
Another very unique situation seen in India, is that travel programs don't consolidate their hotel reservations with their preferred TMC or Self Booking Tool (SBT), if implemented.
Bookings for hotels especially international hotels are done in multiple forms
- through room aggregators
- through OTA's and public websites
- directly with the hotel concerned on call/email
- through secretaries and administrators
- on reaching the destination from the airport by the traveler
- by the overseas office staff
Tracking and consolidation of booking information on hotels booked is a major grey area. Consequently, there is limited or nil visibility on where an employee is staying. Such dis-aggregation also impacts data analysis and optimal sourcing of room rates.
5. “Per Diem Advances” for foreign travel
Many Indian firms give their employees a “per diem” - The employee is expected to arrange their stay in their destination country using this per diem. This can vary from $25-$60 per day, generally.
The employer may not mandate receipts for the stay from the employee. IT / ITES companies actually regard such a practice as being “employee-friendly". This is presented as a staff incentive, since the employee could technically stay with friends & family, retaining the per diem.
However, what is completely ignored is the fact that the employer has little or no information on
- where the employee is staying
- the quality of the accommodation
- the health & safety standards
- risks to employee
Overseas medical travel insurance is still not a mandatory part of Indian business travel programs. Implementation is erratic. Hence the overall approach with some exceptions in largely reactive - The overall motto can be summed up as “Let something happen, the travel team will firefight the issue”.
As a business travel consultant, ProKonsul believes the approaches outlined above, create corporate liability, generate traveler friction & negative employee CSAT. They directly & indirectly impact the cost of the program. The resultant inefficiencies inflate indirect costs, creates complexity in processes & reduces the ability of the enterprise to reduce overall spend.
Wake up before its too late!
Business Travel Duty of Care is defined as the corporate obligation that an employer has to secure the welfare of their employees when the employees travel on official work. The concept of Duty of Care emerged and become a major component of business travel policies worldwide post the incidents of 9/11.
In many parts of the world - like USA / Canada & Europe / Australia, this is a legal obligation of the Directors & management of the company. There have been many instances where the courts have found the officers of the company legally & financially liable for negligence. The negative impact of a brand & hiring standpoint is incremental negative liabilities.
This is not yet a legal obligation in India and in most emerging markets. Which is why there is limited or nil CXO visibility or focus amongst most Indian companies.
Modern business travel is not purely about pricing and fee minimization. It is built solidly on the principles of program optimization. There are multiple aspects that have to be accorded priority to build a program that protects enterprise and employee interest while optimizing spend. Partnering with a supplier agnostic business travel consultant like ProKonsul, can bring objectivity in decision making & allow program maturity to leapfrog to the best in the industry.
There is an innate desire, when it comes to Indian business travel, to keep the head buried in the sand. The approach here is that what is not seen or heard or recognized will not impact the business!
India is targeting to be a $5 Trillion Economy by 2025. It's business travel market is the fastest-growing worldwide. Ranked 7th largest globally.
For a business to scale and become efficient, Indian CXO’s have to spend time understanding and strategizing business travel. They need to take advantage of external business travel consultants like ProKonsul, who can simplify this complex domain, prioritize goals and deliver global best in class business travel programs.
Don’t wait for a Black Swan moment to happen, before you wake up !!
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ProKonsul ® optimizes the business travel lifecycle of its clients. It delivers domain expertise in enterprise business travel. Established in 2014, it is the pre-eminent business travel consultant in India, Asia & emerging markets. We are located in Gurgaon, India.
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