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Listen to our podcast with Huron Consulting Group for tips on building a resilient travel and expense program

The disruptive environment of the pandemic has unified our workforce through empathy, humility, and resourcefulness, all of which have helped promote business continuity. Communication and work policies around business travel have become more focused on ensuring employee safety in addition to compliance. Managers assessing whether to approve a business trip must determine if it¡¯s worth both the financial and human capital risks. Building contingency plans around the outcomes for business continuity are also about being ready to flip the switch when the next disruption occurs.

Listen in to Marchelle Klippenstein, Vice President of the Value Experience Group at SAP ÂÜÀòÊÓƵ solutions, as she chats with Katheryn Nolfo, Consulting Director of Huron Consulting Group, on how organizations are shifting from measuring the ROI of travel to the Return on Travel (ROT). From car rentals to pre-approvals and home office environments, they discuss the new focal points of a resilient travel and expense program that¡¯s ready for the next disruption in business continuity.

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Transcript:

Marchelle Klippenstein:

Okay. Hi, everyone. This is Marchelle Klippenstein with SAP ÂÜÀòÊÓƵ again today. With us for this podcast event is Kathy Nolfo of Huron Group. Actually, Kathy, why don't you introduce yourself?

Kathy Nolfo:

Great. Well, thank you so much for having me. As you said, I am with Huron and the Director within our Spend Management practice, specifically focusing on T&E and AP automation. We have been doing this for a long time from a business process perspective, in partnership with ÂÜÀòÊÓƵ for a very long time. But really, my goals within the organization is to continue educating our groups on what are the trends happening within travel and expense? What has the pandemic done to the industry? How do those industry impacts then bubble up to organizations and impact their travel policies and initiatives, and so forth? I have a little bit of a hybrid role here. That's one of the areas that I focus on.

Marchelle Klippenstein:

Wow. How long has Huron been a partner? You said a long time. How long?

Kathy Nolfo:

Yeah, so our partnership actually goes back unofficially since about 2010.

Marchelle Klippenstein:

Okay.

Kathy Nolfo:

We did our official pen to ink partnership in 2012.

Marchelle Klippenstein:

Okay, great. Well, you guys have obviously some industry focuses, which I'm sure we'll get into throughout the conversation. Quickly, I'll just introduce myself. It's Marchelle Klippenstein. Again, I'm the VP of our Value Experience Group. I love hosting these podcasts. I love having just this open dialogue. I hope you the listeners enjoy these topics. We're going to walk through or kind of just discuss the state of the state. It's not shocking that the world is starting to open back up. We have a new state of business travel to look forward to. I don't know about you Kathy, but I was seeing the holiday travel for leisure was definitely ticked up. It's starting to really, I don't know if the term is get back to normal. It's kind of the new normal, the next version of our program we can start looking at.

With that, listeners, we're going to kind of talk about a couple of specific topics that I think we as SAP ÂÜÀòÊÓƵ and as Huron might be of interest to you. It's time to start having the dialogue with your cross functional team members to, to look at how it's going to impact your business. With that said, how about, I don't know Kathy, what would be your perspective right now of the state of the state in terms of business travel, employee suspend management? How are you seeing it right now?

Kathy Nolfo:

Yeah. I think what we're seeing is definitely the desire for resurgence as well. Not only a slight uptick in the actual corporate travel, but also just this overall desire that people do want to get back out there to conduct their business. It's human nature for us to want to interact with people socially and in person.

Marchelle Klippenstein:

Yes.

Kathy Nolfo:

There definitely has been an impact to organizations, less than what we've seen in the past, where if you couldn't go to a location for a trip, where sometimes that might have been considered negative against you as a partner or an informality that you thought wasn't important enough. In the past, people saw that as not a positive, so you traveled more, right? This scenario with the pandemic, everyone went home. Everyone started working from home. The lack of person to person interactions was very acceptable. But 13, 14 months later, it's just our human nature to want to get back and start talking to people. We are seeing that from a corporate travel perspective, leisure we've definitely seen already, but from a corporate travel perspective, people do want to start traveling again. As well as people want to start being able to collaborate in person.

Now, what does that mean for organizations? That's where we have to start working with particular organizations and understanding their culture and what's happening within their common travel, city pairs, things of that nature. It's this mindset that it is definitely acceptable to not travel. Clients and partners are not holding you to travel, but there is definitely this wanting to travel again. I think that is a big change where people are like, "I want to travel now." Not like, "Oh God. I have to do a business travel trip," right?

Marchelle Klippenstein:

Yeah. I mean, I'm looking forward to the opportunity. I want to get out there again. I need the collaboration too. You're right. Collaboration is such a huge part of how, both in a sales capacity or even in a strategic design thinking session, internal team meetings. You see so much that comes out of those just one day, two day workshops. Or you see so much that comes out of that client facing interaction in a sales cycle, or in an account management discussion or something like that. That's huge, I agree. 14 months into this and I am definitely ready to get out there.

I also noticed too, it's clear companies are actually starting to bring people back to the office too. Not only do we have an environment where travelers are going to hit the road. But we also have people returning to the office to be back in the company of other humans, right? I agree with you on how you're seeing this right now for sure. What that lends itself to though in terms of, what are the expectations of employees now? What are your thoughts around the idea of incorporating employee sentiment? What are your customers doing to engage and bring in that sentiment piece as they design, and as they work through the next version of their programs? Is there any discussion around that in your world right now?

Kathy Nolfo:

Absolutely. Because while there is a desire, there's still a fear associated to some of that travel or just concern I should say. I don't necessarily think there's fear anymore. There's more concern. There is definitely understanding how this new world is going to impact the employee. Ensuring that there is good and solid consistent communication to the employee base to have them understand, what are their travel requirements? What do they need? If they're doing international travel, what are the requirements from a vaccination perspective? There's definitely the desire piece, but then there's still definitely that, how do we now manage this world of travel?

Kathy Nolfo:

Leading up to this pandemic, really we saw kind of a shift from corporate travel going from a very managed program to somewhat of a structured unmanaged program. Where people might book directly with an airline or hotel provider, but it was linking back to the ÂÜÀòÊÓƵ booking solutions. There was still that visibility for the travel managers, right?

Marchelle Klippenstein:

Right.

Kathy Nolfo:

We are seeing more managed programs becoming tighter again, right? We want to have a little bit more of that visibility. They are good with the TripLink connection, bringing in that visibility. But they're looking at this more from a duty of care perspective now too, right?

Marchelle Klippenstein:

Yeah.

Kathy Nolfo:

Even domestic companies that used to think, well, we don't really need to worry too much about duty of care. We want to make sure everyone pretty much is safe. We have good policies in place where they're traveling to locations. They have adequate spend in order to stay in nicer hotels and safe environments, but they're not going internationally. Things like a terrorist attack or things like volcano eruptions, all those types of things that might impact travelers and concerns, was a part of their world, but this was different. This affected every country, every organization. It didn't matter what industry you were in, and it didn't matter whether you were domestic or global.

Kathy Nolfo:

They're looking at, how do we really better manage these programs? Not solely from a compliant, how much money you're spending. But really, how are we ensuring that our employees are safe? How are we ensuring that they have all of the information they need when they're traveling, even domestically? How do we continue the communication and feedback from our travelers to ensure our programs are successful for them? The one thing that is challenging is that we normally saw disruptors in the world of travel to be kind of like waves, right? You'd have a disruptor that was usually a technology disruptor. You had a time period where you got used to that disruption. Things leveled out, you had another disruption. What we're seeing now in disruption is more of, there's a disruption up here at the top of a mountain. Straight down, there's not a lot of time to level out before another disruption hits. You don't have that timing of being able to manage those disruptions like you did in the past. Organizations are looking to get tighter so that they can manage those disruptions at the pace that they're actually coming at them right now.

Marchelle Klippenstein:

We hear about business continuity planning. Obviously that affects every function in the organization, but I think you and I have had a couple conversations in the past around this idea of contingency. Human capital is a huge piece of this. This is our workforce. This is our mobile workforce that is being supported through these disruptions. In terms of contingency planning, I think you guys are in that mix right now with some of your customers talking about, what does that look like? Because the disruption is coming so fast, we're going to have something probably come up again in the near future. Let's not kid ourselves. How do we plan for that? What are you recommending to customers right now?

Kathy Nolfo:

Yeah, you're absolutely right. I think the conversation that we've had in the past is, how do you plan for today and for tomorrow at the same time, right?

Marchelle Klippenstein:

Yeah.

Kathy Nolfo:

You have to have that contingency plan in place. We are working with our clients around, here's what you're doing today. Here's a successful project, program. Everything is great. Clap for yourself. But what's going to happen if this changes tomorrow? How do we adapt quickly? That's where we started developing contingency plans around outcomes. If there is a disruption, what is the desired outcome? How do we put a plan in place to get to the desired outcome? We kind of were working at both ends in order to come up with the plan that works best for the client. We have to understand that desired outcome is the goal. How do we get to that goal?

One of the areas that we are, not necessarily on the travel side but on the expense side, working with contingency planning, is actually putting together a set of audit rules, workflows, messaging. Things that typically need to change in an environment like that, that's already in place. So that when something does occur, they simply have to activate. The workflows actually are already active. It's already built in. But the actual audit rules that trigger the workflow then just gets turned on. Now everything changes from that perspective. We're looking at it both from the travel side as well as the expense compliance side.

Marchelle Klippenstein:

Okay, so you basically are looking at setting it up functionally to basically move with the contingency plan like that. All of that is documented. The teams know. The program managers, any cross functional stakeholders that care are going to be in the know of what that plan is. I mean, that's business continuity planning at its finest to have it ready for the switch to be flipped, right?

Kathy Nolfo:

Exactly.

Marchelle Klippenstein:

Okay, that's great. One of the things too I think that goes into contingency planning, or just managing to the disruption, is this idea. I don't know about you, but I think I have seen it probably come to life within a couple, significant numbers of conversation lately, around this culture of preapproval. I don't think you and I, we go back a long time, I don't know if preapproval has always been this... not mandated, but it wasn't always part of the cultures of our customers' programs. It was almost met with resistance and almost bogging the process down because everybody was moving so fast. What are your thoughts about this idea of preapproval being part of the mix now, and it being more dominant in program expectations?

Kathy Nolfo:

Absolutely. We've seen a lot of shift in that space. Just to go back, we have known each other for a long time. I think it's been about a decade. We've been really, really successful for 14-year-olds.

Marchelle Klippenstein:

I'll take it. I think I'm going to stay 29.

Kathy Nolfo:

Exactly, that's why I said we met at 14.

Marchelle Klippenstein:

Yeah, that's what we did.

Kathy Nolfo:

We have, we've seen absolutely a shift in this. This is one of the spaces that we've actually been innovating since about 2015 to be quite honest with you, is actually putting more value into the "repair request" process. Obviously there has been certain industries and maybe certain elements of travel that always require pre-trip authorizations. We're not talking about the green, yellow, red light philosophy within the booking tool, which has some inherent approval processes. We're actually looking at some of the more complex requirements. We've seen that for certain industries. If you're doing international travel, for example, or if you're looking to have group travel and you're going to be booking travel for a group. We've seen that in the past.

We're seeing a shift though that more organizations are looking at that from a pre-trip perspective to help them with their goals around duty of care, as well as who is traveling and so forth. Now, one of the areas that we have been doing more and more with request is not just the pre-trip. But we've been working in areas of, okay, we're requesting credit card usage. We've put together a card program to help us capture the spend and better manage it. But typically, requesting a credit card set outside of the ÂÜÀòÊÓƵ system.

Marchelle Klippenstein:

Yeah, that's true. You're going straight to the card provider.

Kathy Nolfo:

You're going straight, right. There's usually an email request or a portal request.

Marchelle Klippenstein:

Or a spreadsheet somewhere.

Kathy Nolfo:

A spreadsheet somewhere. It's a manual process. We've developed programs around whether it's, depending on the card program, what you need. We don't take any personal information in that process. But it is the request of the credit card going through a different workflow process. We've even developed it all the way through to the card issuance. Developing the reports that need to come out of ÂÜÀòÊÓƵ to then work with the issuing bank and the client to actually get the data in the right format. The cards have been issued, and it's all done within one spot for the end user as well as all the approvers.

Marchelle Klippenstein:

Okay.

Kathy Nolfo:

It's been done like that for, like I said, several years now. But we've even expanded it into continuing education, certifications. Industries that require continual credentialing. We've built those into Request. You and I just talked I think a few weeks ago by how we're starting to see operational means. Requesting to come into the office. Requests on PPE equipment. Request on collaboration time and getting authorization for that, right?

Marchelle Klippenstein:

Yeah.

Kathy Nolfo:

We've seen such a shift of not only new industries wanting these pre-trip authorizations for travel, but also wanting to use ÂÜÀòÊÓƵ Request for a lot of other areas. It just makes sense. You don't have to go buy another system now to manage the workflow approval for education or for scheduling office space and things like that. It's all being done within one system.

Marchelle Klippenstein:

Yeah. What that does though is it also brings... I mean, when I was managing a program years ago, I think I was pretty siloed. I didn't have as many connections or I didn't know that there were other business process areas that could in fact be supported by the functional nature of this tool. It's not about just the request module of our solution. It's this idea that there are other use cases that can be served up, especially as we look at what the next version of these travel programs are or these spend programs are.

The same can go for a purchasing card. If the company has a dominant purchasing card program, pre-approval for that spend in advance is just as important from a budgetary control perspective, and FPNA gets involved in everything as it is to get pre-approval to go travel somewhere. From a finance perspective, it all matters. Also from a duty of care. I do like that you called that out because whereas before, I think people met this travel pre-approval with resistance because it was, "Hey, you don't need to know where I'm going." Or, "I don't want to tell you where I'm going." Or, "I don't need your approval because I do this all the time."

It's now about the safety of the employee. It goes back to the sentiment. I think employees want to know that their employers are watching out for them, especially now that they are going to be... I don't know if it's unchartered waters. It's like we're going out into a different environment than what we had before. Especially international travel. Don't get me wrong, I want to go. But I also want to know that I'm protected and that I'm taken care of if something was to happen to me, right?

Kathy Nolfo:

And I can get back home.

Marchelle Klippenstein:

And I can get back home. Yeah, let's not forget that part, yeah. That could change at any time. That goes into your contingency plan, right?

Kathy Nolfo:

Yeah, absolutely. Your duty of care program, organizations are looking at this differently, but you're exactly right, that the employees are looking at this differently. In the past, you're right. Employees were like, "It's big brother," right? It's oversight that's unnecessary. But I think that just became an understanding that oh, this is why my company does this. Is because in the event that something could happen, I need support when I'm traveling, right? Or I need information about where I'm traveling to. I need to understand if there is a risk associated to that. A lot of the duty of care partners have actually developed COVID related modules that are now being plugged into this world as well. I think there was just a lack of understanding from an employee perspective in the past because unless you had been outside, or somewhere in Boston when the Boston bomber happened. Unless you had been affected by an event and you understood what that meant or why your company was doing that. But let's face it, not all of us have been part of that.

There's a small population of the 350 million Americans that have actually probably experienced an event like that. There was a lack of understanding to why a company was doing those things. Now I think there is just a general understanding that there are things that can affect my travel. There are things that can affect my safety. I work for a great organization because they care enough about me to put these things in place so that they can help me throughout the process. I think the sentiment has changed more from the employee perspective even than from the actual corporations that have been trying to do a lot of these good things over the last several years.

Marchelle Klippenstein:

I agree. The sentiment gathering is tough. There are ways to get the right information, to get the pulse of the employee base to understand. I would encourage, I guess you and I both would probably very much encourage anybody listening here today, to consider that as you build out or you adjust, as you're preparing to return to the next version of this business travel. And employee spend. We can't forget that it's not just a new travel environment. It's also a new decentralized spend environment too because we're all at home. Unless you're in the office and you're right there with the procurement guy or gal, it's not the same. I'd like to call that part out too. Okay, let's switch gears a little bit. Let's get into some specific travel categories. I think you and I were crossing some wires. No, we were in line. We weren't actually crossing wires. We were in the same line of thought around what's next for travel suppliers, what's dominant, what's not.

Kathy Nolfo:

There were a lot of changes there.

Marchelle Klippenstein:

Yeah. Do we want to just go into the one that you and I both were already kind of locked and loaded on, which is the car rental world? Let's talk about that.

Kathy Nolfo:

Let's talk about that. I think that's something that's really relevant, especially as organizations are looking also to do sustainability programs. Alternatives to air travel. Though this definitely does impact those organizations that are looking to do that, which most are. So yeah, let's go ahead. Open it up.

Marchelle Klippenstein:

Okay, so here's the thought. I was under the assumption, this is my hypothesis. My hypothesis was that personal car mileage would actually be more dominant than any other mode of transportation, at least in this next 12 month period. What I see, or what we are seeing in our client dataset or in the transactional aggregate of mileage is that our mileage distance per transaction is pretty constant. It's not changing very much. But what I did see is that our car rental volumes are double digit growths in the last two quarters. I think you have said, or you saw something around the pricing had changed. There's something that happened with car rentals, inventory shakeups or something to that effect.

Kathy Nolfo:

Yeah.

Marchelle Klippenstein:

What do you know? What can we share with the listeners about this?

Kathy Nolfo:

Yeah, so there definitely has been a change in what we've seen around rental cars. Initially, I just thought to myself, oh my God. This is so crazy. Because I even tried to do a personal booking one time, and I think there's really two things I need to answer here for you. First of all, why are we not seeing more mileage on the personal car? I think it's also because I don't want anything to happen to my car right now because of COVID. My son had an accident back in October. One part that was back-ordered and could not be replaced because of COVID held up our entire car for three months.

Marchelle Klippenstein:

Oh my goodness.

Kathy Nolfo:

From a personal perspective, do I want to put that wear and tear on my car or the potential of something going on with my car in the current environment that we have? I think there's some of that personal, I don't want to do that to my car right now because it's my car and I don't want to buy a new one, and I don't want to have issues, right?

Marchelle Klippenstein:

Right.

Kathy Nolfo:

I think that's why we're seeing then more on the car rentals. But we're also seeing more on the car rentals because maybe I'll drive to Arizona for five hours versus catching a plane, because I don't want to be exposed to the activities that happen at an airport and in an airplane and so forth, right?

Marchelle Klippenstein:

Yeah.

Kathy Nolfo:

I think that's why you're seeing the increase, the double digit increase that you're seeing on the car rental fee. But then you think, okay, more demand usually costs goes down. There's more car booking. There's more demand.

Marchelle Klippenstein:

Cost goes up.

Kathy Nolfo:

Cost goes up, right?

Marchelle Klippenstein:

Yeah.

Kathy Nolfo:

Which is normal. But what we're seeing is an incremental cost that is more than just a little bit from demand. I did a little investigation on that. What we've found is that during COVID, the travel industry just got so hit. They had a lot of sunk costs into their fleets. They actually liquidated a lot of the fleets to reduce their actual costs so that they can stay afloat, and pay their employees, and do other things that they needed to do. Now the bookings are increasing. They haven't necessarily built back up that fleet. There's kind of a wait and see. Is it a fluke that this booking is happening? Is something going to happen again? Your number of cars actually available for rental has actually gone down. Now you have a double whammy. You have an increase in volume over the last two quarters of rental, but you actually had a decrease of actual inventory to be rented.

Marchelle Klippenstein:

Yeah.

Kathy Nolfo:

Using Chicago as a point of reference, because it tends to be a more expensive airport to rent a car from. But their airport rental costs and fees and COVID surcharges and all that stuff adds almost $100 per booking.

Marchelle Klippenstein:

Per booking.

Kathy Nolfo:

Regardless of the duration of the actual car rental.

Marchelle Klippenstein:

Yeah. Duration aside, I think I saw in some of the data I was looking at, we've got about a $72, $100 delta between the average booking or the average cost of car rental from '19 to what is happening in the last two quarters. That's right in line with what you were saying about the $100. Well, then at that point though, they're renting the cars longer. At that point do you start now... I think back in the day, we would look at it and say, "Okay, well is it cheaper to rent a car and drive?" Now we're going to be asking, "Is it cheaper to fly than it is to drive?" That's a crazy change.

Kathy Nolfo:

It is. It is a change, and that's where it starts impacting the sustainability models and things like that. In the past, we used to have a metric that we would say, "Okay, we're revamping someone's travel policy." You have some road warriors that are really using a lot of mileage. When does it make more sense for them to not use their car for personal mileage reimbursement and also rent a car? We still look at the metrics around, what is that sweet spot for any organization? When we've done this, sometimes you'll find someone got reimbursed $40,000 in a year for mileage reimbursement. You have to think to yourself, "Well, I could give them a new car every year. Is it better to have a company car or is it better for them to rent a car?"

There's all different conversations that you can have around that. But this current situation is going to impact us in the short term. How do you have a contingency plan to manage that in the short term? And then how do you shift back to what your normal policy may be around car rental when the inventory of car rentals go up again? It's a complex conversation now where it used to be a very simple conversation.

Marchelle Klippenstein:

Yeah. That actually brings up a good point. One of the things I think our customers are grappling with is, what do I need to change? What areas of my policy, what areas of my program, do I really need to look at? Do you have two or three major categories or major focus areas that you would advise the customers listening here what they should really start to look at as part of the contingency plan? Or what's kind of the normal adjustments you're seeing happen right now? Car rental obviously is one of them or that piece of the policy. What else, pre-approval? I don't know, what are the top three?

Kathy Nolfo:

We can talk about preapproval. We can talk about car rental. Another area that's not directly related to travel, but it's so important right now, is actually managing the home office environment.

Marchelle Klippenstein:

Oh, good point.

Kathy Nolfo:

And all of the expenditures that are going to home office. We never used to pay people's cellphone bills. But now we're looking at this and we're just letting people submit their cellphone bills. We know that that could be astronomical, because a lot of times cellphone bills can have their family pack on there.

Marchelle Klippenstein:

Yeah.

Kathy Nolfo:

How do you know that? Looking at managing the home office expenditures and policies and procedures is another area that we're working with organizations in really coming up with what works best for their culture and their workforce. Now, this is an expenditure that in the past, most organizations might have done for a percentage of their workforce.

Marchelle Klippenstein:

Right.

Kathy Nolfo:

They had a small percentage that would work out of their homes, and that would be a constant road warrior, right? Well, now you have almost your entire workforce working from home. That spend might go through a central procurement process. It might go through expense reports. It might go on a corporate card. It might go on a personal card. There's just a lot of variables there that we are working with organizations to help manage that piece of it as well.

Marchelle Klippenstein:

Well, then add to that the contingency plan where I think what we'll see is flex work environments. The work from the office if you want, the work from home if you want, the work from anywhere if you want. I work from anywhere and I love it. That's what I hope I can continue to do. Therefore, my spend behaviors and whatnot need to be considered as part of the policy going forward too.

Kathy Nolfo:

I've worked from home for 25 years.

Marchelle Klippenstein:

Right.

Kathy Nolfo:

I've always been in a position where I've traveled quite a bit. It didn't make sense for me to go into either downtown Chicago or now, in California, into LA where offices are because of the travel time, the commute, and so forth. That work always was very easy for me. I know how to be a good steward of the organization because I've been doing it for so long. But there is a large group of people who have never done that. It's a shift in, oh my God, I need paper. Just simple things that they never-

Marchelle Klippenstein:

Or I need a printer. I didn't even have a printer at home.

Kathy Nolfo:

Things like that. But what that has done though is it has driven more automation. The employees now are starting to drive for that automation. We need these processes. We don't want people driving around to drop off checks to be signed. The employees themselves now and this whole shift of where we're working from is automatically driving the need for automation.

Marchelle Klippenstein:

And any pocket of the business where it doesn't exist. Probably those listening here today could not say with 100% certainty that everything, every piece of their business process, has got an automation element to it. There's going to be improvement areas all over the board, absolutely. Then actually, that brings up a good point. Part of what we've been trying to work through and consult and understand too, just the same as Huron, right? We're together in this, is all the different pressure points of the customers right now and the environment. We've touched on a couple of them, but another one that I think is interesting is we talked about staffing changes that were experiencing. That goes to your automation, or at least that expectation that employees would drive it.

I would say that there has been, if not maybe a reduction in workforce, a reallocation of resources. Our programs slowed down, for lack of a better term. What are you seeing with your customers dealing with basically a resource shortage as they start to get back and going again? We don't have that practice. Those practitioners don't maybe sit those same chairs anymore. What are you seeing happen there?

Kathy Nolfo:

I don't know that I see a lot of, in our particular client base, a lot of reduction of staff or reallocation of staff around their T&E programs. Because typically, they were already optimized or we got them to a point of optimization where they didn't see that big of an impact from that perspective. But there's the flip of that. Many organizations had mass furloughs. It didn't matter what position you were in and so forth. But if you look at while travel definitely slowed, it did not mean that expense reports slowed.

Marchelle Klippenstein:

That's true.

Kathy Nolfo:

Because they made that shift to a home office. There was still that need and that requirement of supporting those efforts, but just in a different way. We, our own client base, we didn't see a huge loss of contacts for who we were working with. We actually saw the opposite. We actually saw the first few months, definitely a slow of we can't do anything. All our efforts have been switched to COVID and work from home efforts and so forth. But then in the last... how many months are we now into this? I would say the last eight months or so, it became more of, okay, we need to do more. We actually have to start getting ready for when things do go back to normal. It was a shift of using, again, the same resources of doing that contingency planning and getting ready for what's going to happen next. I don't know if we're unique with our client base from that perspective because of how we worked with them to begin with or we just got lucky. I'm not sure how that worked out, but we saw a shift in how we were working with them.

Marchelle Klippenstein:

Okay, so maybe it's safe to say though that maybe some industry remains status quo or there wasn't as much movement of people. But that if you did as a client listening today, if they did experience movement and they did experience resource shifting... because I think I've heard customers not say they lose half their staff, but they reallocated them to other parts of the business for the sake of continuity. It's probably a good time to start looking at if they're bringing them back or looking at ways to get more efficient automation, to your point. What other parts of the business process need to be paid attention to? Because you are going to have to do more with less. Maybe customers, if you're listening and you experienced some shift that way, it's time for you to start looking at, what's it going to look like? How are you going to support the volumes when it comes back up and the resources have shifted? I'm just going to call that out to the listeners.

Kathy Nolfo:

I think definitely as you bring those folks back into your fold or the need to, is communication is going to be huge. While typically we're considered back office, we're really not at this point. We really have to have constant communication plans, constant training plans. Reviewing of the data that comes out of ÂÜÀòÊÓƵ and identifying behavioral items. And determining, is that really a behavioral item or is that something we really need to look at our policy about, and identify if we've had such a shift in this area and our policy needs to be tweaked, or we need to put a contingency plan in place? I think that the usage of... or the way that I would see people needing to be really focused on right now is constant communication. What communication they're going to look at. In the past, communication might be about compliance. Don't do this, don't do that. I think now the communication shift is more of, here is what we need to do to work together. Here is the change. Here's why we're doing this.

Marchelle Klippenstein:

Yeah, a lot of the why. A lot of the business reasons for decisions need to be brought to the attention of the traveler too, because I remember. I don't know about you, but you'd get an audit flag or something would be blocked. You'd be like, "Why? I don't understand. I'm just trying to do my job." Yeah, communication there is going to be key. I agree.

Kathy Nolfo:

Yeah. The why's are really important. You've got the communication. I also think that while we start to add more AI to our audit processes and things like that, we are going to take those people and start focusing more on the front end travel programs. Okay, so if we're continuing getting a flag that's not just me or you, but 100 people out of 120 people keep taking that same flag. We need to look at the business practice and look at the company. Is it that yes, is it really a true issue? Or have we identified a shift in our world?

Marchelle Klippenstein:

In their behavior.

Kathy Nolfo:

In their behavior, as a result of a change in car rental. Lots of people are getting flagged probably right now because their daily allowable car rental average is probably more than what the company is set at.

Marchelle Klippenstein:

Oh yeah, I'm sure. That goes back to why the sentiment is so important. If you do see those flags, this is like if I could envision my next version too. If I could see the flags and I saw the trend operationally, I would want to know why it's happening. That's cool to also... it goes back to marrying that up, because then you can get the explanation of, why the 100 flags? Why are they deciding to do the car rental? Okay, is rail an option? I don't know. Different parts of the world, rail might be more conducive or maybe not. I don't know, but sentiment is super important there I think.

Kathy Nolfo:

Oh, absolutely. I think that's part of the effort of your employees, or of your bringing back those resources, is how do you get that information back? Survey your employees. Have some town hall meetings that say, "Now that we're back together and we looked at traveling..." Or bring together the top 10 travelers in the last two months and say, "How are we doing? What could we communicate better for those that are going to start traveling? What do you think we've missed?" This has definitely been a humbling experience for everyone. It's been a humbling experience for the traveler and it's been a humbling experience for the travel managers to just say, "What did we miss? How do we work together?" We don't to run in a silo and be this hierarchy where we're just telling you what to do. We really want to work together and make sure that you are happy.

Marchelle Klippenstein:

Right.

Kathy Nolfo:

We want to keep you happy because you're an asset to the organization. You're important to us.

Marchelle Klippenstein:

Yeah. That goes into, which would be the last point I had left to the very end, which was the return on travel. Not the return of travel, but the return on travel. Employee engagement, employee experience. Positive, all of that, is definitely I would consider a part of that equation in terms of the return. The more productive they are on the road, the more efficient it is for them, the more they get done for the business and so on. We can all see that cycle.

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Then also, when people do get out and about and they're going to make a decision to go, the business is going to look at this and say, "Is this a healthy return for us? Is this decision a go or no go?" It goes into the risk, the duty of care contingency plan. It goes into where they're going and all of that. And of course the cost of sale if it's a sales event or something like that. Is it worth traveling/ at the end of the day, is it worth it? I think a lot of our customers, correct me if I'm wrong or give me some more insight here Kathy, but I think return on travel, ROI or ROT, is going to actually be a thing. Whereas I think customers in the past have tried to correlate it to the success of a deal or overall business productivity. But now I think it's going to be even more important. What are your thoughts about that?

Kathy Nolfo:

I can give you a little history on this. There was a time period, I think it was around 2008 or '10, where business travel came to a halt. It wasn't because of a pandemic. It wasn't because of a terrorist action. It wasn't because of weather. It was because the economy was not doing so hot.

Marchelle Klippenstein:

Right.

Kathy Nolfo:

Organizations were like, "Okay, T&E spend is our number two, number three dollar amount of our bottom line. We've got to control that." They ended up doing a really good job controlling them, but they did see a net result against their actual business, their actual revenue. Their happiness of employees. We've done this once before. I think you're going to have those travel managers and people who have said, "We've done this 'we can't travel.' We know how it's going to impact our business. We need to make sure that we get back to it in a successful way." You're absolutely right. I think they're not going to just look at it from a, did me traveling to that location get me that one account?

Marchelle Klippenstein:

Right.

Kathy Nolfo:

They're not looking at it like that anymore. They're more looking, did we represent our brand correctly? Are we doing the right thing in the world? Are people looking at us as an organization that takes care of their employees? While yes, they traveled, were they taken care of? There's definitely a different sentiment. That's from the employees' side. But also from the people that are working external to our organizations, and then also from a corporate perspective. I think it's definitely going to be a factor.

Marchelle Klippenstein:

It's a good reminder for those when we experienced it in '08 or that economic downturn that we've done this once before. Maybe you look at the results of that time period, and this is a great opportunity to look at and shape a different outcome for what that return on travel benefit is to the organization. I agree.

Kathy Nolfo:

Right. I feel like we could probably talk for hours.

Marchelle Klippenstein:

We could. I have like 10 more topics.

Kathy Nolfo:

I know.

Marchelle Klippenstein:

I have 10 more topics for you, but we're going to probably leave it to the next Marchelle and Kathy session.

Kathy Nolfo:

We can do a series.

Marchelle Klippenstein:

Yes, we will. Actually listeners, there might be another one for me and Kathy coming up soon, but go ahead. What were you going to say?

Kathy Nolfo:

I was just going to say in general, this has been just such a humbling experience for everyone in the industry, in the travel and expense industry, consulting firms, our clients, different organizations, all the way down to our own children. There has just been such a massive impact that's come out of this experience, but it's also been a joining experience. We all understand it now. We all are in this together.

Marchelle Klippenstein:

Yeah.

Kathy Nolfo:

We've gone through it together. There's empathy for each other and we all know that we're going to have hiccoughs and it's okay. We're just figuring it out, and we're bringing the best possible information to you through our research, through ÂÜÀòÊÓƵ's research, our research. Through our experience with our clients during this time period. But there is just such a unity that we've actually gone through this together.

Marchelle Klippenstein:

Yeah, I agree. Sometimes we lose sight of that. That's a great reminder, Kathy. We are in it together. Probably as much as we've all heard that and the term pivot, but guess what? We are. We're moving forward and it's a new phase. Okay, so with all of that, thank you so much for your time. Listeners, feel free to reach out if you have questions. I think all of our contact information will be published, or talk to your client executive or anyone on your account team. I'm happy to connect you with Kathy as well if you have questions for her. All right, I'm just going to ask you Kathy. Any closing remarks? Anything?

Kathy Nolfo:

God, I wish I was a witty person. No, I just wish everyone the best through all of this. I think as we continue to work through disruptions, we're going to always come out I think better and stronger because of those disruptions. Just like we do in our own personal lives when we have things that we have to overcome. We always come out stronger and better, so I think that at the tail end of this, the corporations and companies that we all work for or with are going to come out stronger and better.

Marchelle Klippenstein:

I agree, and we're all going to be more prepared. Time to prepare for the return of travel. This is great. Well, again, thank you Kathy. I'm sure we'll be talking again soon on the next version of the Kathy and Marchelle podcast.

Kathy Nolfo:

I like the sound of that. Thank you so much for having me.

Marchelle Klippenstein:

Listen to more episodes of the and contact us for help building a resilient travel program today.

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Katheryn Nolfo oversees the spend management practice at Huron. Her passion is to observe processes, listen to customer¡¯s concerns, and then come up with a more efficient program for them. She brings 20+ years of experience in consulting, operations, and business systems improvements. She is a certified and award-winning SAP ÂÜÀòÊÓƵ Solutions Consultant and has consulted with over 500 clients to ensure an optimal solution is provided for them to achieve their goals.

Katheryn lives in Southern California with her husband and two sons, has served on the board for the San Clemente Rugby Club, and volunteers for various outreach programs in her local comunity.

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