Just about all organisations carry more costs than
they need to because too much time and money is spent on travelling.
Every now and then finance managers may throw a fit, and measures are
put in place that have some effects at the margins. But work-related
travel keeps on rising. Usually only business failure will bring
it down.The reason initiatives to tackle rising business travel
usually fail is that they try to tackle travel itself, rather than the
causes of it. Work-related travel is generated by the ways we work,
and the places we choose to do it. And for the most part, these root
causes are not seriously questioned.
Here we provide a step-by-step guide to understanding the full
costs of travel, and how to reduce them using new ways of working.
1. Counting the cost
Nothing persuades quite like a good argument based on a strong
factual basis (- something that several world leaders are
currently finding difficult to understand as I write).
Changing the way people work is no small undertaking. And it will
require some investment to make the savings. The evidence base
must be substantial. So for this reason it is important to build up a
picture of the total travel costs. These consist of:
- direct travel expenses - petrol, mileage, tickets, meals,
accommodation, etc: i.e. everything usually counted under travel
expenses
- time costs - the salary costs of people while they are
being unproductive or less productive in transit
- travel investment - e.g. in company car fleets, leasing
arrangements, parking spaces, etc
- travel administration - time spent in organising travel,
processing and reimbursing expenses, etc.
Take for example 4 people coming to a 2 hour meeting, each
travelling for an hour each way. 8 hours travel, a days worth of
productivity, has gone into just travelling for the meeting.
But more than that, additional direct and indirect administrative time
has gone into it. The results may be worth it. But how many people
coming away from a meeting would say that it true in most cases?
And the 2 hours of the meeting. Are they truly justified as the
time needed for doing the business? Rarely so. The value of this
time is hard to quantify: but what is the cost of the "padding" of the
meeting - the sharing of information that could more easily have been
sent ahead online, not to mention the posturing and the waffle and
digressions.
It's important to look on travel in a neutral way, however, and not
to demonise it. Business travel is associated with many positives for
the business - meeting clients, solving their problems, selling things
to them, developing new partnerships, managing effectively across
sites, and so forth. The question is not "Should we do it?", but
rather, "Are we doing much more of this than we need to?"
2. Auditing the "drivers to drive"
The compulsion to travel is not derived simply - or always
logically - from working practices. The compulsion is often
psychological, and embedded in the workplace culture.
The following slide outlines a range of factors that may contribute
to unnecessary travel:
Just to take a couple of examples from these: many organisations
require all managers above a certain level to be able to drive. There
may be some reasoning in this, depending on the nature of the
business: but often it's historic and habitual. And company cars are
often part of recruitment packages. In these ways an expectation
of driving can be built in to jobs.
There's also a psychological component to the way we think about
meetings. The concept of "meeting" implies place, and physical
encounters - and so a need to travel. But this is no longer
necessarily so. A meeting should be about activity, rather than
location.
These activities can be carried out remotely, using a range of
technologies. Various kinds of online collaboration (see below) can
replace the physical meeting and its attendant journeys.
The value of the "drivers to drive" audit is threefold:
- It helps to build the business case for change
- It has a crucial awareness-raising value amongst managers and
staff, who begin to identify areas of inefficiency in working
practices and workplace culture, and so breaks down barriers to
change
- It begins the process of identifying alternative ways of doing
things.
3 Identifying requirements for new ways of working
The solutions for reducing business travel are likely to fall into
the following categories:
- Online collaboration (to replace many meetings)
- Videoconferencing
- Remote diagnostics and monitoring
- Various forms of telework that will reduce repeated trips back
to base and enable shortest-route trips, e.g:
- from the nearest local office
- when on the move
- from client sites
- using home as a base
Examples of the kind of savings possible include:
- Yorkshire Water – 20% annual mileage saving by engineers, mainly
due to fewer trips to office
- RM Consulting – 145 employees reduced business travel by 500,000
miles over 2 years
- IBM – 13% reduction in travel time, 36% increase in time spent
with customers
- Royal Bank of Scotland - which has calculated that it saves more
than £70k per month by eliminating corporate travel through the use
of video and audio-conferencing.
(Cases cited in ICT and Travel Plans
report.)
One large national broadcaster used to bring regional mangers into
headquarters for a monthly meeting. It invested just under £200k
in top quality videoconferencing technology to reduce the meetings to
2 per year. Within the year the new system had been paid for out of
saved travel and accommodation costs.
Thinking about the alternatives to travel inevitably highlights
deficiencies in systems that will support remote working. If current
IT systems regularly fall over, or are incompatible with each other
etc, staff will be sceptical about using it more extensively.
Organisations need to prepare themselves, their systems and their
business processes for extensive remote work. And they need to
identify the costs.
It is also possible that comapnies do not have the in-house
experience to identify the necessary systems and develop roll-out
plans, so consultancy costs and outsourcing arrangements may need to
be explored. But having at Stage 1 identified the total costs of
travel, investments can be planned against future savings.
4. Piloting and quick wins
Nothing will sell the case quite like seeing it in action.
Potential quick wins should be identified in areas where there are
good opportunities to reduce travel.
This gives the opportunity to test any new technologies and working
practices, to monitor, evaluate feedback and to make appropriate
adjustments. Piloting can also provide a sound basis of evidence for
setting targets for travel reduction.
It is always the case, however, that the needs of different
departments will vary, so results are not necessarily simply
transferable to all other departments.
5. Roll-out plan, policies and targets
On the basis of the evidence gathered and the pilots, a plan for
rolling out the new working practices can be developed. It is
worth noting that there may be some synergies policies to reduce staff
commuting and with meeting the requirements of new employment law
which allow a right
to request flexible work.
The roll-out plan will also need good levels of cooperation between
operational, HR, IT and facilities managers, and so will need support
from the highest levels to overcome barriers and departmental agendas.
Having already identified the cultural factors that encourage
unnecessary travel, it is important to replace them with appropriate
policies that encourage and support new kinds of flexible working.
A checklist of these can be found in our
Complete Guide to Flexible Working. Needless to say, our
advice in the Guide to integrate new ways of working with clear
business objectives equally applies when one of the main objectives is
to reduce travel costs.
Targets are important too. By this stage of the process there
should be a clear understanding of current costs and potential
savings. Targets should take the form of reducing travel by n%
by such-and-such year, or reducing travel n% year-on-year over a
specified number of years. Targets can be set at company,
department and/or team level.
Other targets may be more financially focused, and may concentrate
on a particular aspect such as scaling down or ultimately eliminating
company cars.
6. Roll out the new working practices
After all the preparation, the easy part! Based on clear business
objectives and a "cultural clean-sweep", flexible working ought to
progress much more smoothly than it would have done otherwise.
But there are bound to be issues and gremlins that arise. So
flexible working should be seen as something which is continually
evolving. With new and better technologies and a changing
business environment, it is also likely that options rejected at an
early stage may become more viable over time. So a system of review is
advisable so as to maximise the benefits.
Hopefully the result won't be that your staff are climbing the
walls because they never get out of the office! Instead, they
should be happily working wherever is most effective to get particular
tasks done. And your company's travel costs will be well under
control.
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