Contrary to carrying out tasks in a way that has always been known, implementing changes is not easy. But what if the methods once adopted have become ineffective? A well-prepared business case is the motivation for the change, which will convince both management boards and employees. However, it is important to present what is most important for the company – savings or profits. To do it reliably and get rid of doubts, we present step by step how to convince others to automate Travel & Expense.
IVESTMENT IN AUTOMATION IS INVESTMENT IN THE BUSINESS
More and more companies notice the need to change the management of the T&E process. They look for the best solutions and weigh the pros and cons of the chosen provider. Unfortunately, those interested in purchasing the system are unable to predict its direct benefits, which can be seen almost immediately after implementing the changes. Doubts delay optimization or block it completely. The only question is where the greater risk is lurking: in investing in automation or in postponing the necessary changes.
To answer this question for yourself and management boards, you should prepare a business case. Unfortunately, CFOs face obstacles at the very first stage. Important elements to be included are often not obvious or very difficult to measure. The only solution is to take the time to delve into the T&E process, learn about strengths and weaknesses, and juxtapose them with the company’s goal and challenges along the way. Only collecting reliable data will allow you to properly estimate the cost elements, and above all to answer the question: Does the company find a justification to invest in the Travel & Expense management system?
HOW TO CREATE A GOOD BUSINESS CASE?
Now that you know that you need an exact business case, it’s time to find out how to prepare it so that it clearly presents the current state of business trips and expenses, specifies the company’s needs, and selects the right supplier and justifies the investment in business. We will take you through the preparation of a business case step by step, we will show you how to do it and what to pay attention to.
Step 1 – defining a goal
Before building a business case, check the alignment with the company’s goals. Look for the answer why you decide to implement automation in the T&E process. It is also worth considering what the main motivation is for this investment – is the company most interested in savings, or maybe in gaining valuable time for everyone? Regardless of the goal, create a project mission and determine the impact of its effects on the entire company, so that it is clear to employees and project sponsors. Apart from the goal, list all the pain points of the current process and the challenges that may arise during the implementation of the new system. Think what solutions will meet the potential challenges.
Step 2 – presenting and documenting the current process
The second step is to look at the process that is currently running. Identifying and writing down the procedures that are currently operating in the company will help to reveal hidden costs resulting from, for example, performing tasks manually. An interview with each type of stakeholder is a good method, and a checklist that will allow you to go through the entire process from start to finish will be very useful in this case. Next, all travel and other expenses and compliance issues that arise should be identified. In this step, it is easiest to check how long it takes to complete one task in the process. A sample checklist and potential answers are provided below:
What steps are required in your company to effectively manage business trips and expenses?
- applying for a travel or expense budget
- authorization of expenses
- collecting documents
- preparation of travel settlements and expense statements by employees
- submission of bills for approval
- approval of expense statements by managers
- approval of the statement of expenses by the finance department
- approval of settlements of statements of expenses and business trips for the needs of settlements of advances and reimbursement of costs to employees
- accounting
- other
What does an employee need to prepare a settlement of business trips or expenses?
- office supplies (paper, printer, stapler, etc.)
- office supplies (paper, printer, stapler, etc.)
- space for storing documents
- billing patterns, e.g. in Excel
- map with GPS
- maintenance and updating of the appropriate version of the designs
- company Intranet
- other
What are the obstacles to complying with the rules in force in the company?
- lack of awareness and knowledge of the principles of the adopted policy of business trips and expenses
- lack of easy accessibility to the expenditure / travel policy
- errors caused by manual data input,
- one invoice delivered twice or the same invoice delivered by two employees
- employees presenting for settlement of expenses inconsistent with the applicable rules after the fact of making the expenditure in “good faith”
- abuse
- other
What is the average waiting time for an employee to be reimbursed for expenses?
- 0-7 days
- 7-14 days
- 15-30 days
- 30-60 days
How are employees typically reimbursed for expenses?
- when preparing the payroll
- cash
- transfer
Step 3 – Recognizing challenges
The next step is to evaluate the internal pain points of the current process. Employees of companies which have switched to an automated system usually indicate 5 areas:
- process management (36% of respondents)
- transparency of cost statements, business trip settlements and process data (23%)
- system of booking hotels and tickets for connections by means of transport (10%)
- integration with other systems in the company, e.g. CRM (10%)
- time for reimbursement of employees for incurred expenses (9%)
Subsequently, pay attention to the key elements that pose the greatest challenge in your company. With the help of the checklist and the above areas, review the process again, paying attention to costs and compliance. This way you will select those issues that should be given special attention. During the assessment, consider the solutions that are used in similar organizations.
Step 4 – what does your company need?
Once you have identified your weakest points in the process, it is time to work out how to fill in the gaps. In this case, please answer the following questions: Is any task / stage taking too long? Aren’t the costs of preparing and filling in the delegation accounts too high? Aren’t the employees waiting too long for their own funds to be returned? Answers to these types of questions will help identify the needs of individual stakeholders.
In order to understand the company’s needs better, create a team consisting of representatives of individual groups of employees. Listening to and understanding the needs of each person involved in the process will allow you to effectively optimize it. Thanks to this, employees will feel that they co-create the company and have real influence on its development. After receiving feedback, make a list of requirements and key functions. The results of research by industry leaders, where the respondents indicated the necessary functions (we put them in parentheses), may be helpful):
- ease of use (65%)
- work automation (50%)
- integration with the HR and financial system (41%)
- mobile application (36%)
- generating statements of expenses and business trips (35%)
- functionalities that help to enforce the policy of business trips and expenses (33%)
- integrated system of hotel reservation and ticket purchase (23%)
Step 5 – evaluation of suppliers
Now it is time to take a look at suppliers. There is a wide range of possibilities and systems available on the market, but it is important to choose the one that best suits the needs of your company. Choosing a supplier is not easy, so we present ways of making this task easier below:
- after first narrowing down the pool of suppliers, check them in terms of the number of satisfied needs and select those who meet all or most of the criteria
- determine whether the higher price justifies additional functionalities or a higher level of support
- check the reviews on the internet
- eliminate those vendors whose solutions exceed your budget, and then those who provide less functionality that you require
Step 6 – justify the investment
Now that you have narrowed down your list of potential vendors, it is time to create a business case for investment (ROI). The most common argument is savings, so we will list a few areas in which, thanks to automation, you can reduce costs through:
- increasing compliance with the policy of business travel and expenses – no double costs, flagging expenses inconsistent with the rules, analytics and review of trends and the degree of compliance
- elimination of logistic costs, e.g. courier costs, especially in multi-branch companies – all documents are in one system, to which everyone involved has access
- savings on office supplies – paper, toner, and archiving costs
- eliminating tasks requiring the collection of documents and manual data entry, spending less time in accounting and cost analysis, no need to randomly check employee settlements
Step 7 – presenting return on investment
Return on investment (ROI) is a key argument that can convince you to take action. Each investment must face questions about potential costs and savings. Proving long-term benefits can be your trick up your sleeve. It is important to consider the benefits carefully, especially as some of them are difficult to measure or notice. These include employee satisfaction, less frustration, which probably will not drive the investment, but certainly its essential aspects. Demonstrating a comparison between the actual process costs and the financial benefits of the investment is the most important activity that will justify a system change. It is worth basing your presentation on statistics, e.g. from Certify’s Annual Expense Management Trends Survey for 2017. The most important functionalities in the context of ROI mentioned by the respondents:
- increase in the efficiency of each participant in the process (57%)
- reduction of process costs (48%)
- mobile access (22%)
- control of hotel and flight reservations thanks to the authorization of expenses before the trip (22%)
- reduction of abuses (22%)
Step 8 – risk management
Another important aspect is identifying the risks associated with the implementation of the system. Each project carries a risk, so you should take a closer look at them and compare current risks with those associated with the implementation of the change.
Problems which the company may encounter include:
- no budget for the project implementation
- the new solution may not meet the company’s needs
- employee resistance to changes
- disrupting day-to-day operations by changing a stable process
- a change requires training
Risks related to delayed changes or failure to implement them:
- maintaining an ineffective process
- wasting valuable employee’s time
- lack of transparency of expenditure
- greater possibility of abuse or double declaration of expenditure
- difficulties in controlling the course of the process
Step 9 – project implementation
After selecting a supplier and securing funds for investment in the project, it is time to implement the changes. Cooperation with the project manager will guarantee that all important elements will be taken into account during the implementation.
Step 10 – documentation of benefits
Once the system is up and running, it is time to observe the actual changes that have come along with the automation of the process. At this stage, it is important that you measure the benefits and provide the results to those involved in the project. This is the perfect time to monitor the process, identify savings, and even record the number of hours spent by employees on preparing settlements. The collected data will be necessary to show the actual ROI. The information obtained will also help you compare expectations with real benefit.
CONCLUSION
The transition to an automated system is not a complicated task, and the steps outlined above should go a long way in helping you prepare for it. To make it even easier, we have prepared a ready Excel model, in which you just need to enter your own data and see if the purchase of a TEM system is the right investment. To receive a model, fill in the contact form and register via our website.
