Reconsidering Your Investment
The Fallacy of Subscription-Based Travel Risk Management
BLUF: It’s imperative to question and rigorously test your travel risk management solutions beyond the sales pitch, ensuring they provide tangible, real-world benefits.
By adopting a more critical and comprehensive approach, your organization can develop more effective and responsive travel risk management strategies that truly protect your employees and your business interests. Are you still committed to annual subscriptions or memberships for travel risk management that are priced based on your staff count or annual trip numbers?
While subscription models have undeniably enriched many companies, including my own, I assert that this framework is ill-suited for TRM in 2024 and should be abandoned.
How did we transition to a subscription model for
Travel Risk Management (TRM)?
Examples include a medical services company struggling to integrate Passenger Name Record (PNR) data, an intelligence firm unable to arrange aircraft charters for an evacuation in Africa, and a security firm improperly handling personal data, thus violating GDPR.
The core issue was the TRM’s attempt to adapt on the fly and innovate unnecessarily, while Travel Management Companies (TMCs) and insurers were advancing effectively. Consequently, clients ended up incurring higher costs. In retrospect, the problem stemmed from posing incorrect queries to inappropriate vendors; a more collaborative and pragmatic approach between vendors may have been more beneficial to all, notably the client.
It’s important to examine the reasons behind the existence of subscription models and the proliferation of ineffective tools.
Subscription models are generally effective for small to medium enterprises (SMEs), but there’s a tipping point where they become impractical, necessitating a shift to a flat fee arrangement or internal solutions.
The Tools of the TRM Trade
The expectation that a significant percentage of employees and travelers will proactively download and engage with a TRM app within large organizations is both unrealistic and inefficient.
The common sales pitch promises an advanced, user-friendly application that will refine your TRM for a nominal monthly fee. Yet, the harsh reality often reveals that less than 10% of employees board or engage with the app, leaving your organization vulnerable and the real per head license cost being up to ten times more than was initially pitched.
Furthermore, stakeholders are increasingly reluctant to transition to more effective and economical solutions due to the daunting administrative burden of switching services.
The effectiveness of their work—and their standing within the company—is now at stake, tied to their ability to ensure compliance with the new system.
It’s critical to acknowledge that true organization-wide TRM involves more than just an app, and notably, the bigger the corporation, the lower the adoption rate. Often, it’s tied to a vanilla information subscription which acts merely as insurance, benefiting the vendor. The product suite is deliberately designed so that you’ll contact them, affording them the opportunity to charge you more for additional products and services.
The Issue of Redundancy and Oversight in TRM
Moreover, there is an undeniable duplication of services.
If your organization already benefits from medical insurance complete with emergency hotlines and direct billing capabilities, travel management services which integrate with all methods of transport and accommodation, process visas, and automatically update HR systems – why double these services through your TRM provider?
This not only escalates costs but also introduces unnecessary delays, increases information security risks—and is, by and large, executed poorly. Effective TRM demands a holistic approach, yet it is often undermined by siloed operations and a lack of proactive collaboration. It’s not uncommon for the security managers who oversee the day-to-day of travel risk, and perhaps more importantly, incident response, to be excluded from initial planning stages, resulting in stale, recycled strategies that ignore recent innovations, and the lessons learned from recent events.
A Call for Informed Decision-Making and Real-World Relevance
The selection of TRM services is frequently influenced by proximity to the decision-makers rather than proximity to expertise, particularly in regions with volatile conditions and inconsistent standards like the Middle East, Africa, and Central Asia.
It’s essential to challenge the status quo by prioritizing thorough assessments and real-world effectiveness over convenience and cost.
TRM should be a strategic, organization-wide commitment to safeguarding employees during travel, not just a technological afterthought or a checkbox for compliance.
Considerations, Suggestions, and Solutions for Effective Travel Risk Management
1. Get Rid of the Duplication
The anticipated benefits from synergizing Travel Management Companies (TMCs), Travel & Health Insurers, and Travel Assistance Companies have fallen way short. It is imperative to redefine success metrics for TRM and consider de-integrating these services to enhance accountability, performance, and reduce costs.
2. Refining the Role of IT in Vendor Selection
IT should focus on assessing the technical feasibility and risks associated with integration at the backend rather than influencing the choice of vendors. Standalone systems, while continually perceived as less ideal, must not be dismissed if integration presents significant risks or complexities.
3. Evaluating Vendor Lock-in
In cases where organizational inertia favors the traditional TRM vendors, it is crucial to remember that TRM services are tools, not mandates. The efficacy of a vendor should be judged by their ability to mobilize resources effectively, especially in crisis situations, not by their software or ancillary services. Front-end tech does not equal security for the traveler.
4. Building Direct Relationships with Regional Vendors
Cultivating partnerships with local service providers can reduce dependencies on global vendors, who may lack the nimbleness required in urgent scenarios. These direct relationships can lead to more efficient and timely responses.
5. Discarding Ineffective Communication Tools
Replace expensive, underutilized or unpopular apps with more widely adopted communication platforms. In times of crisis, familiarity and ease of use are paramount, and traditional messaging services like enterprise versions of WhatsApp, WeChat, or enterprise SMS may provide more reliable connectivity, despite going against existing company policy.
6. Asking the Right Questions
Interrogate vendors on specific competencies and ensure that they offer distinct and measurable value beyond what is already available through existing partnerships or public resources—specifically regarding travel risk information.
7. Engagement & Testing
Regularly engage with and test the capabilities of your vendors and their local and regional subcontractors to ensure they meet the organization’s needs. This hands-on approach can uncover potential gaps in service that might not be apparent until an actual crisis occurs.
8. Continuous Vendor Assessment
Avoid complacency by consistently evaluating the performance and relevance of all service providers. This proactive stance helps identify areas for improvement and ensures that the TRM strategy remains robust and adaptable.
Conclusion
Engage with Us
While we can all agree that one size fits nobody, I’d love to hear your thoughts and experiences, and if open—explain how we are helping improve TRM programs, one step at a time. Please reach out to me at sw@sicurogroup.com and let’s fix a time to discuss your specific concerns with my team. We will share our experiences and, where appropriate, what we see is working, without any obligation from you.
Contact Us
About the Author
