Current procurement methods do not support mini budget's austere measures

| 0 Comments

 

TraceyShaw.jpgMany of the key items subject to austere measures under Finance Minister Pravin Gordhan’s mini budget fall under the Travel and Expense (T&E) portfolio.


While these cost-cutting measures are a step in the right direction to curb excessive spending, Tracey Shaw, of travel technology company TraveluXion, wonders how they will be implemented in practice if procurement methodologies are still outdated and dependent upon fragmented processes across various suppliers, without any supporting technology?


“I suspect many tax-burdened South Africans welcome Minister Gordhan’s declaration of war upon wasteful expenditure on luxury hotels, extravagant car hire, first-class air travel, entertainment allowances, conference costs and government credit cards.”


Importantly, these billion-Rand savings will be achieved through implementing greater restriction and tighter controls on luxury perks, or eliminating them altogether.


This action is commendable, but is only one piece of the “managed travel” puzzle, which also comprises business intelligence, on-line booking technology, pre-trip approval aligned with budget allowances, duty of care obligations, expense claim submissions, credit reporting, supplier payments and conferences and events.

 

Pravin_Gordhan_2012Budget.jpgThe multitude of data that this puzzle creates is where the savings opportunities lie. However, the data is rendered almost meaningless if the components of travel are fragmented, the reporting dependent upon many suppliers and the data consolidated only weeks after the travel has occurred, says Shaw.


Unfortunately, typical South African managed travel means “managed post-trip”: travel managers sift through reports of post-trip travel data.


While management information systems (MIS) are helpful when analysing travel costs after the fact, MIS does not assist in controlling and managing spend before the cost is incurred, “which will be key if government wishes to extract billion-Rand savings through compliance and budget adherence.”


MIS reports certainly do not give any insight into immediate budget compliance or adherence, nor do they assist the organisation to manage spend or include expense claims,” explains Shaw.


PhoCusWright’s recent report on travel technology trends in Europe noted that many procurement professionals still lack the knowledge and travel expertise to be as effective as their organisations demand in respect of this unique spend item.


Without immediate visibility into the travel budget and the many costs that hit the cost centre and budget at all times of the month for a multitude of travellers, it is harder for executives to stay on top travel budgets.


However, with the right technology tools that assist to better manage compliance, visibility and risk, expertise can be fast-tracked, driving better returns into the organisation. The real-time business intelligence analytics incorporated into end-to-end T&E applications (such as TraveluXion) enables procurement professionals and executives to examine trip costs in relation to budgets and trip profiling and benchmarking.


Progressive organisations and government departments realise that true savings will be derived from tighter controls and better visibility into how these costs impact the budget. Google and Intel have adopted “open booking” policies and replaced traditional preferred suppliers with end-to-end T&E applications, which allows their good corporate citizens the opportunity to book their travel, with their preferred supplier, rather than the company’s, via the traveller’s preferred channel, where and when it suits the traveller.


“This seems risky, but these two organisations have identified that, provided the trip is in budget, compliant and all components of the trip are captured through the T&E application, it satisfies their employees as they are more empowered and trusted and in return this valuable resource is retained in the business. It is a bold approach, but one that we will be watching with great interest to see the uptake in this concept both globally and within South Africa,” says Shaw.


So while we in South Africa may still be a few years behind Google and Intel in their very mature approach to travel management, systems such as TraveluXion’s independent application enables organisations that have a culture of good corporate citizenship to implement such progressive policies and organisations that want to transact in the more traditional methods will also benefit from this technology. TraveluXion was purpose built for all organisations that want to retain more cost control and compliance to policy by implementing an end-to-end T&E application, thus making the procurement of travel more accountable and professional.


Please contact Tracey Shaw to continue this thread.

Leave a comment


SmartProcurement Newsletter
X

Please enter your details below to receive the SmartProcurement Newsletter for FREE on a regular basis.

As part of the SmartProcurement Newsletter you will be receiving World Class Procurement News, Tools, Tips, Tactics, Procurement Training updates, Upcoming Events, and the latest Procurement Career Openings.

* Email Address:
* Title:
* First Name:
* Surname:
* Company:
  Position:
* Country:
* Public / Private:

 

Career opportunites

Marketing Executive

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
Geographical Area: Midrand GautengSalary: Market related2 Years Marketing ...More

Head: Supply Chain Management (P6)

  • <500 000 >500 000 Limpopo Permanent Procurement Management Supply Chain
North east of the Tropic of Capricorn, just ...More

Purchasing and Supply Manager

  • <500 000 >500 000 Gauteng Permanent Procurement Management Supply Chain
Purchasing and Supply ManagerThe CSIR has a vacancy ...More

Senior Manager Public Sector

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
 Senior Manager Public SectorTotal Cost to Company: R1.1mil ...More

Senior Manager: Mining

  • >500 000 Gauteng Industrial Engineer Permanent Projects / Category Management
Senior Manager: MiningTotal Cost to Company: R900k – ...More

SUPPLY CHAIN MANAGER

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
SUPPLY CHAIN MANAGER(Total Cost to Company R750k – ...More

Master Data Management Advisor

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
 MASTER DATA MANAGEMENT ADVISOR(Total Cost to Company R750k ...More

PRO - Performance Reporting

  • >500 000 Permanent Procurement Consultant Procurement Management Projects / Category Management
PRO - Performance ReportingTotal Cost to Company: R800k ...More

PRO - Risk & Governance

  • >500 000 Gauteng Permanent Procurement Management Projects / Category Management
PRO - Risk & GovernanceTotal Cost to Company: ...More

Supply Chain Site Manager

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
Supply Chain Site ManagerTotal Cost to Company R1mil ...More

Chief Financial Officer

  • >500 000 Gauteng Permanent Procurement Officer / Specialist
Chief Financial OfficerTotal Cost to Company R1.5mil – ...More

Process Engineer- WMS

  • <500 000 >500 000 Industrial Engineer Permanent Projects / Category Management Western Cape
Process Engineer- WMS(Total Cost to Company R350K – ...More

Forecast Analyst

  • <500 000 Analyst Permanent Procurement Management Western Cape
Forecast Analyst(Total Cost to Company R350K – R500K) Location: ...More

Group Category Manager: Indirects

  • >500 000 Permanent Procurement Management Projects / Category Management Western Cape
Group Category Manager: Indirects(Total Cost to Company R700K ...More

Group Category Specialist: Chemical

  • >500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
Group Category Specialist: Chemical(Total Cost to Company R700K ...More

Sourcing Specialist - 3rd party

  • >500 000 Gauteng Permanent Procurement Officer / Specialist Strategic Sourcing
Sourcing Specialist - 3rd partyTotal Cost to Company ...More

Global Procurement Lead (Processing)

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
 Global Procurement Lead (Processing)Location: JohannesburgTotal Cost to Company ...More

Global Supplier Performance Manager

  • >500 000 Gauteng Permanent Procurement Management Supply Chain
Global Supplier Performance Manager Location: Johannesburg  Cost to ...More

Group Customer Service Lead

  • <500 000 >500 000 Analyst Gauteng Permanent Procurement Officer / Specialist
Group Customer Service Lead  Location: Johannesburg As the ...More

Business Intelligence Manager

  • <500 000 >500 000 Gauteng Permanent Procurement Management Supplier / Business Development
Business Intelligence Manager Location: JohannesburgLead the development, implementation, optimization ...More