Consider for a moment the following scenario in your business.
Utilising a process, you establish that your business requires chairs.
The results of your internal process and specific evaluation identifies that you require 10 chairs.
You assign responsibility for the purchase and delivery of the chairs to a specific manager.
Either through internal compliance and audits or just looking at your expenditure for the year you find out that in fact a total of 100 chairs were actually purchased.
Sounds ridiculous right?
That is an incredible over purchasing result.
Someone failed to adequately implement the plan and wasted the company’s resources.
What if someone then just went ahead and purchased another 100 chairs the following year?
What if then, the chair provider just started increasing the cost of their chairs at will, even if you didn’t use the chairs you purchased in the first place?
It sounds highly unrealistic because we all think that this type of activity wouldn’t go unnoticed or be corrected before money was wasted.
Others might argue that someone would notice all the unused, excess chairs just sitting around and correct the error.
Unfortunately, not all business costs and expenditure is immediately visible or leaves physical signs for managers and employees to act upon.
“Travel security” is just such a purchase and this incredible waste of resources is happening every day within businesses of all shapes and sizes.
Moreover, it is routinely done in the name of very vague, unspecified and inconsistent references to “risk”.
Compliance departments and internal control professionals joke about such scenarios.
There is a 300ml glass that contains 150ml of water.
The optimistic manager says that the glass is half full.
The pessimistic manager says that the glass is half empty.
The internal auditor says that the glass is twice as big as it needs to be and a smaller, less expensive glass should have been purchased.
“Internal audit, therefore, adds value by testing the controls that authorise the purchase of glasses and ensuring that expenditure is optimised. “ as described by Paul Hopkin, from the Institute of Risk Management, in his book, Fundamentals of Risk Management, published in 2012, on page 354.
Organisations need to unsubscribe from this institutionalised wastage taking place in the travel sector, in the name of “travel security” and vague claims of managing risk.
The majority of business trips are less than 5 days, so abstract political commentary and analysis is wasted on short duration exposure.
Stop wasting money on such expenditure.
If your business only travels to 10 or 20 locations, stop buying products and services that claim to provide information and support to 300 locations.
You don’t need it; you don’t use it, so stop buying it.
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Evidence-based decision making in support of the management of mobile and travelling businesses talent.