This document summarizes a presentation on travel procurement metrics that help meet CFO expectations. It discusses: 1. Lagging indicators that show most CFOs are dissatisfied with travel spend management and best-in-class companies have high levels of spend under management and compliance. 2. The importance of understanding a company's current travel spending through baseline analysis before setting metrics to track and strategies to reduce costs. 3. Examples of effective metrics like tracking top city pairs by spend, advance purchase rates, and changes to itineraries that can help reduce average trip costs and calculate cost avoidance.

1. TA2 – From Blocking and Tackling to
Strategic Managing: Meeting Your CFO’s
Expectations
August 25, 2009 – Session A
Travel Procurement Team
Janice Crawford, Kelly Henry Luedtke, CCTE,
Susan Long, CCTE, Yasuo Sonoda, CCTE, Karin
Thompson, CCTE & Karen VanBuskirk, CCTE

2. Lagging Indicators
Yasuo Sonoda, CCTE
Sonoda Travel Management Solutions
Principal Consultant
TravelGuru@SonodaTMS.com
Introductions
Today’s
World
Lagging
Indicators
Leading Edge
Indicators
Speaking Their
Language
Jeopardy!
Q & A

3. Lagging Indicators: Statistical Statements
 Fewer than 40% of CFO’s are satisfied with
how their company is managing their travel
spend.
 “While CFOs clearly view travel through a
cost-control lens, travel cost management
has so far made a minimal contribution to
companies’ overall cost control programs.”
 Best-in-class companies
have 87% of T&E spend
under management with
90% average compliance
to travel policy.
 62% of best-in-class
companies measure KPI’s
relating to T&E monthly
or more frequently.
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 Only 27% of the respondents
felt that their relationship with
the travel departments was
effective.

4. Lagging Indicators: Key Takeaways
 Know your geography (baseline)
 Track the “right” metric
 Collaborate with your key stakeholders (i.e.
procurement, finance, etc.)
 Use the right metrics to drive strategy
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5. Know Your Geography
 Complete the baseline analysis
 What do we spend?
 How are we spending it?
 How can we control it?
 How can we spend less?
 Where should we focus for better control?
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6. Report Distribution Example
• Benchmark
• Pareto
• Common Sizing
• Big Picture
• Region
• Organization
• Smaller
Chunks
• Department
• Analysts
• Category• Budget Groups
• Organization
• Department
• CC Mgrs
• Smallest Units
• Cost Centers
• Individual Mgrs
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7. Interactive Dashboard
(Informersion - Business Objects – SAP - Xcelsius)
 KPI gauge each unit’s target rates
 Trend by quarter
 Grouped by organization/department
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8. Pareto Chart to Show Category Spend
Cumulative total % by $
Air sub-category spend by region (stacked)
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9. GL Level Report Example
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10. Company Spend by Expense Category
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11. Creating the “Right” Metrics
 Complete the baseline analysis
 Focus on unit cost control
Controllable vs. non-controllable
Apply 80/20 rule
 Provide periodic management reports and integrate
findings into financial reports to C-suite execs
 Measure ROI and performance quarterly and
annually
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12. Track the “Right” Metrics
Issues:
 Managers are inundated with reports/data
Solutions:
 Keep your metrics simple and transparent.
Benefits:
 “The right metrics drive the right strategy.”*
*“Strategy Execution- Linking Values, Metrics, and Rewards ©2007 CFO Publishing Corp 10 of 13

13. Metrics Example: Pre-Program Baseline
Rank City Pair Total $ (All Airlines) # Trips Average $
% Spend
by $
%
Cumulative
1 SJC-AUS 637,998$ 1,180 541$ 24% 24%
2 SJC-CHICAGO 325,658$ 658 495$ 12% 36%
3 SF-New York 325,541$ 523 622$ 12% 48%
4 SF-Boston 215,365$ 452 476$ 8% 56%
5 Dallas-SJC 156,258$ 421 371$ 6% 62%
6 Seattle-Chicago 148,652$ 326 456$ 6% 68%
7 Denver-SFO/SJC 102,325$ 268 382$ 4% 71%
8 AUS-Chicago 99,658$ 163 611$ 4% 75%
9 LAX-SJC 96,542$ 325 297$ 4% 79%
10 SF/SJC-MIA 68,547$ 165 415$ 3% 81%
Top 10 Total 2,176,544$ 4481 486$
All Other 501,259$ 1171 428$
Grand Total 2,677,803$ 5652 474$
2004 Top Domestic City Pair by # of Trips (US POS)
AdvPurch PaidFare #Tickets
Average
$
% Total by # % Total by $
< 7days 445,628$ 621 718$ 53% 70%
7-13Days 113,625$ 324 351$ 27% 18%
>= 14Days 78,745$ 235 335$ 20% 12%
Grand Total 637,998$ 1,180 541$ 100% 100%
TransType PaidFare #Trans. #Trips
Original 637,998$ 1,180 1,180
Exchange* 12,685$ 321 0
SVC Fees** 21,470$ 113 0
Grand Total 672,153$ 1,614 1,180 570$
*Includes agency fees
**No add/collect, just the change fee, includes agency fees
2004 SJC-AUS Advance Purchase Analysis
2004 SJC-AUS Ticket Change Cost Analysis
True Average Cost Per
Trip
ABC Corporation Top City Pair Spend Analysis*1. Identify top city pairs to
apply 80-20 rule;
2. Establish KPI;
3. Reduce unit costs
Above example is roundtrips only (90% of company
trips). If this is not true, use the O&D segment
analysis instead.)
Reduce tickets w/less than
7 days advance
Reduce changes to
itinerary
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14. Metrics Example: Post-Program Results
Results (Top city pair example)
AdvPurch PaidFare #Tickets
Average
$
% Total by # % Total by $
< 7days 445,628$ 621 718$ 53% 70%
7-13Days 113,625$ 324 351$ 27% 18%
>= 14Days 78,745$ 235 335$ 20% 12%
Grand Total 637,998$ 1,180 541$ 100% 100%
TransType PaidFare #Trans. #Trips
Original 637,998$ 1,180 1,180
Exchange* 12,685$ 321 0
SVC Fees** 21,470$ 113 0
Grand Total 672,153$ 1,614 1,180 570$
2004 SJC-AUS Advance Purchase Analysis
2004 SJC-AUS Ticket Change Cost Analysis
True Average Cost Per
Trip
AdvPurch PaidFare #Tickets
Average
$
% Total by # % Total by $
< 7days 386,541$ 529 731$ 42% 61%
7-13Days 185,621$ 535 347$ 42% 29%
>= 14Days 79,258$ 198 400$ 16% 12%
Grand Total 651,420$ 1,262 516$ 100% 102%
TransType PaidFare #Trans. #Trips
Original 651,420$ 1,262 1,262
Exchange* 9,864$ 254 0
SVC Fees** 18,050$ 95 0
Grand Total 679,334$ 1,611 1,262 538$
2005 SJC-AUS Advance Purchase Analysis
2005 SJC-AUS Ticket Change Cost Analysis
1. # of tickets issued w/less
than 7day notice reduced
by 21% (from 53% to 42%)
2. Average ticket price reduced
from $541 to $516 (5% or
$32K reduction)
3. Airfare per trip reduced from
$570 to $538 (6% or $40K)
Issues: What if the average
cost increased even after
shifting?
Answer: Calculate cost
avoidance
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15. Cost Avoidance Example
• Calculate spend if the same % of tickets from the previous period were
purchased with less than 7 days advance
# TKTs % Total by# Fare$
669 53% 533,081$
341 27% 125,052$
252 20% 125,695$
1262 100% 783,828$
2004 Numbers
AdvPurch PaidFare #Tickets Average $ % Total by # % Total by $
< 7days 445,628$ 621 718$ 53% 70%
7-13Days 113,625$ 324 351$ 27% 18%
>= 14Days 78,745$ 235 335$ 20% 12%
Grand Total 637,998$ 1,180 541$ 100% 100%
2004 SJC-AUS Advance Purchase Analysis
AdvPurch PaidFare #Tickets Average $ % Total by # % Total by $
< 7days 421,548$ 529 797$ 42% 59%
7-13Days 196,256$ 535 367$ 42% 27%
>= 14Days 98,512$ 198 498$ 16% 14%
Grand Total 716,316$ 1,262 568$ 100% 100%
2005 SJC-AUS Advance Purchase Analysis
•If the % of tickets issued less
than 7days advance did not
change, company would have
paid additional $67,512 (=cost
avoidance)
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