the best-in-class pillars of next-generation expense management

T&E Expense Management
The Best-in-Class Pillars of Next-Generation Expense Management





March 2012
Christopher J. Dwyer

T&E Expense Management
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Executive Summary
Modern management of expenses related to Travel and Entertainment
(T&E) has undergone an evolution from traditional back-office function to
strategic internal set of processes. The next-generation T&E expense
management program is built on the Best-in-Class pillars of modern expense
management, including analytical, mobile, cloud and integrated capabilities
and processes, and has proven to drive tremendous value from a complex
spend category that is necessary for driving corporate business value. The
T&E Expense Management research study, conducted in January and
February 2012 of 140 enterprises, unearths the Best-in-Class framework for
effective expense management and seeks to educate organizations on the
strategic value of next-generation approaches.
Best-in-Class Performance
Aberdeen used three key performance criteria to distinguish Best-in-Class
companies: the cost to process a single expense report, rate of compliance
to corporate travel policies, and the percentage of business travel spend
under management. Top-performing organizations are known for their
superior performance, including:
• 60% lower expense-processing costs than all other organizations

• A 43% higher rate of business travel spend under management
• A 31% higher rate of corporate policy compliance
Competitive Maturity Assessment
Survey results show that the firms enjoying Best-in-Class performance
shared several common characteristics, including:
• 57% higher likelihood than all other companies to leverage end-to-
end travel and expense management solutions
• 54% higher likelihood to regularly-report on policy compliance
• 50% higher likelihood to have real-time visibility into T&E spending
against budget
Required Actions
In addition to the specific recommendations in Chapter Three of this
report, to achieve Best-in-Class performance, companies must:
• Leverage next-generation expense management attributes, such as
analytical, mobile, and integrated capabilities, to enhance programs
• Develop visibility into T&E spending against corporate budgets
• Formalize and standardize key processes related to T&E expense
management
Research Benchmark
Aberdeen’s Research
Benchmarks provide an
in-depth and comprehensive
look into process, procedure,
methodologies, and
technologies with best practice
identification and actionable
recommendations
This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and
represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc.
and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

T&E Expense Management
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Table of Contents
Executive Summary 2
Best-in-Class Performance 2
Competitive Maturity Assessment 2
Required Actions 2
Chapter One: Benchmarking the Best-in-Class 4
T&E Expense Management in 2012 4
The Maturity Class Framework 5
The Best-in-Class PACE Model 6
The Pillars of Best-in-Class Expense Management 7
Chapter Two: Benchmarking Requirements for Success 9
Competitive Assessment 9
Expense Management Capabilities 11
Best-in-Class Technology Utilization 12
Chapter Three: Required Actions 15
Laggard Steps to Success 15
Industry Average Steps to Success 15
Best-in-Class Steps to Success 16
Appendix A: Research Methodology 17
Appendix B: Related Aberdeen Research 19
Figures
Figure 1: Expense Management Priorities for 2012 4
Figure 2: Top Expense Management Challenges / Pressures 5

Figure 3: The Pillars of Best-in-Class Expense Management 7
Figure 4: Best-in-Class Technology Utilization 12
Figure 5: Expense Management Technology Roadmap 14
Tables
Table 1: Top Performers Earn Best-in-Class Status 6
Table 2: The Best-in-Class PACE Framework 6
Table 3: The Competitive Framework 10
Table 4: The PACE Framework Key 18
Table 5: The Competitive Framework Key 18
Table 6: The Relationship Between PACE and the Competitive Framework
18

T&E Expense Management
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Chapter One:
Benchmarking the Best-in-Class
Corporate travel has long been considered an accepted cost of conducting
business; in fact, expenses related to Travel and Entertainment (T&E)
encompass 8% to 12% of the average organization's total budget. With this
significant level of corporate resources attributed to this complex spend
arena, it has become critical for organizations in 2012 to approach expense
management with next-generation strategies and solutions and ensure that
they are driving value from the T&E category.
T&E Expense Management in 2012
Nearly 70% of organizations across the globe view T&E expense
management as a strategic internal function. Aligned with this notion is the

fact that companies are prioritizing the improvement of key expense
management processes (58%, Figure 1) as their major catalyst for expense
management in 2012. Modern expense management includes processes such
as expense creation, submission, approval workflow, reimbursement and
data analytics, factors that when enhanced via next-generation strategies and
technologies can drive tremendous corporate value.
Figure 1: Expense Management Priorities for 2012

Source: Aberdeen Group, February 2012
The T&E Expense Management study also finds that organizations are honed
into driving more value out of their business travel (57%), a factor which is
linked directly to the level of enterprise financial resources associated with
the T&E category. Visibility (55%) and intelligence (42%) are also high on the
priority list, as companies are looking more and more to improve analytical
capabilities and improve their understanding of the spending and suppliers
associated with corporate business travel.
Fast Facts
√ T&E expenses account for
8% to 12% of the average
organization's total budget
√ Best-in-Class organizations
have driven 60% lower
expense-processing costs
than all other companies
n=140
T&E Expense Management
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The challenges and pressures highlighted in Figure 2 reflect a level of
corporate travel that has not been seen since the economic downturn; with
more and more organizations reinstating travel budgets (and increasing
those budgets), a major challenge that arises is employee behavior and
implications regarding a lack of compliance to corporate travel policies and
guidelines (59%).
Figure 2: Top Expense Management Challenges / Pressures

Source: Aberdeen Group, February 2012
In addition to the overarching pressure of enforcing proper business
traveler behavior, organizations are also focused on two other core areas:
cost and visibility. Analytics (47%), an arena we see Best-in-Class
organizations heavily relying upon, play a major role in the modern
organization's expense management program. Coupled with inadequate
global supplier visibility (25%), the typical enterprise seeks to not only
improve the processes relevant to the management of T&E expenses, but
also to enhance analytical capabilities and visibility to effectively forecast,
plan and budget for a category that comprises a significant chunk of
corporate finances.
The Maturity Class Framework
Aberdeen used the following three key performance metrics to distinguish
the Best-in-Class from Industry Average and Laggard organizations:
compliance to corporate policies concerning T&E, business travel spend
under management, and the cost to process a single expense report
(including costs for processes regarding accounting, auditing, report / review
/ approval time, etc.).
n=140
“T&E expense management is a
high priority function,

particularly since when we
manage it efficiently it allows us
to bill expenses out to our
clients. There is a very high
focus on audit and compliance.”
~ Corporate Manager, Large
North American Enterprise
T&E Expense Management
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Table 1: Top Performers Earn Best-in-Class Status
Definition of
Maturity Class
Mean Class Performance
Best-in-Class:
Top 20%
of aggregate
performance scorers
 90% compliance to corporate policies concerning T&E
 85% business travel spend under management
 $7.91 cost to process a single expense report
Industry Average:
Middle 50%
of aggregate
performance scorers
 77% compliance to corporate policies concerning T&E
 64% business travel spend under management

 $17.87 cost to process a single expense report
Laggard:
Bottom 30%
of aggregate
performance scorers
 40% compliance to corporate policies concerning T&E
 19% business travel spend under management
 $25.72 cost to process a single expense report
Source: Aberdeen Group, February 2012
Best-in-Class organizations in the T&E Expense Management research study
are noted for their superior performance across three major metrics and
their advantages over all other companies. These top-performing
organizations have driven 60% lower expense-processing costs, experienced
a 43% higher rate of business travel spend under management, and achieved
a 31% higher rate of corporate policy compliance.
The Best-in-Class PACE Model
Effective management of expenses related to T&E requires a combination of
strategic actions, organizational capabilities, and enabling technologies that
can be summarized as shown in Table 2.
Table 2: The Best-in-Class PACE Framework
Pressures Actions Capabilities Enablers
 Improve processes
related to the
management of
T&E expense
 Automate key
components of T&E
expense
management
 Leverage analytics

and reporting to
improve expense
spend intelligence
 Real-time visibility into
expense spending against
corporate budgets
 Alignment between
expense management and
overall corporate goals /
objectives
 Regular reporting on
travel policy compliance
 End-to-end expense management solution
 Corporate card / expense management
integration
 Automated analytics / reporting / BI
 Mobile travel and expense management
application / portal
 Automated expense reimbursement
 Expense management module as part of a
larger financial suite
Source: Aberdeen Group, February 2012
Definition: Business Travel
Spend Under Management
√ Business travel spend under
management is defined as
the percentage of planned
travel spend that is actively
managed and accounted for
in corporate budgeting /

planning / forecasting
T&E Expense Management
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The Pillars of Best-in-Class Expense Management
Modern expense management has evolved from its back-office roots into a
multi-faceted program that involves a strategic blend of next-generation
solutions and approaches. Best-in-Class enterprises have driven a top-tier
level of performance across a series of key metrics related to T&E expense
management; it is within this maturity class of organizations that we look to
the "pillars" of expense management in 2012 (Figure 3).
Figure 3: The Pillars of Best-in-Class Expense Management

Source: Aberdeen Group, February 2012
When looking at the advantages achieved by Best-in-Class organizations, it is
clear that their achievements are driven by three major attributes within
their T&E expense management program: integration (78%), analytics (57%)
and mobile (42%). Top-performing organizations have relied upon these
pillars to support, enhance and streamline major expense management
processes and drive tremendous value:
• Through integration between corporate card programs and expense
management systems, Best-in-Class organizations have created a
holistic process for the cycle of an expense report, from expense
creation to reimbursement.
• Analytics present top-performing organizations with the necessary
intelligence for linkage to corporate forecasting and planning, a
factor which contributes to enhanced visibility into all travel

spending and the utilization of that intelligence in corporate-wide
budgeting.
• Mobile travel and expense management applications (and mobile-
optimized web portals) offer business travelers the power of
n=140
“[T&E expense management] is
a significant activity. It is very
difficult to plan so prompt
visibility of actual spending is
crucial.”
~ Director, Small Asia / Pacific
Organization
T&E Expense Management
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expense management technology while on the road or away from
the office, allowing both employees and executives to submit /
approve expenses on business trips.
The three pillars addressed above will be discussed at-length in the next
chapter. We will also learn the specific components of the Best-in-Class
expense management program and highlight the necessary capabilities for
driving value out of business travel and improving overall performance of
T&E expense management.
Aberdeen Insights — Strategy: Travel and Procurement
Collaboration
Although the focus of a next-generation T&E expense management
program centers on 21st-century technology functionalities and

capabilities, one area that can be overlooked is internal collaboration.
Within a complex spend category such as business travel, it becomes
critical for organizations, considering the sizable chunk of corporate
revenue associated with the area, that the procurement and sourcing
teams have a hand in managing major suppliers.
Best-in-Class organizations are over 30% more likely than all other
enterprises to utilize a formal travel sourcing component as part of their
larger T&E expense management program. This factor can help drive
visibility into spending on business travel, as well as assist in negotiations
with major travel suppliers (airlines, hotels / resorts, etc.). Best-in-Class
companies have relied on this collaborative capability to drive their
superior rate of business travel spend under management (43% higher
rate than all other organizations).

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Chapter Two:
Benchmarking Requirements for Success
The next-generation T&E expense management program is comprised of a
multi-faceted framework of nuanced approaches, strategies and solutions, all
designed to streamline major processes, improve key visibility, increase T&E
spend intelligence, and assist executives with achieving overall corporate and
organizational goals and objectives. In this chapter, we will detail the
advancements blazed by Best-in-Class corporations and highlight their
reliance on core capabilities and technology solutions.
Case Study — Leveraging Next-Generation Solutions

As detailed in the T&E Expense Management research study, Best-in-Class
organizations are leveraging a slew of next-generation strategies,
approaches and solutions to streamline major processes and drive
tremendous value. For the director of finance for a small, North
American hospitality organization, these next-generation attributes have
helped improve performance and enhanced their management of
expenses related to T&E.
“We have a two-tier approval process for audit purposes and attempt to
audit approximate 80% of all submission,” said the director of finance,
providing light on the processes behind their 75% rate of corporate
policy compliance. The organization has also looked to mobility as a
prime differentiator. “The mobile application is an excellent feature for
real-time record-keeping of expenses for future review and final
submission,” he said, adding that over 23% of the company’s total
expenses are managed by mobile in some fashion.
The organization has also relied on other next-generation enablers, such
as end-to-end travel and expense management automation (cloud-based)
and automated data analytics / business intelligence, to develop real-time
visibility into all of their T&E-related spending against their corporate
budgets.
Competitive Assessment
Aberdeen Group analyzed the aggregated metrics of surveyed companies to
determine whether their performance ranked as Best-in-Class, Industry
Average, or Laggard. In addition to having common performance levels, each
class also shared characteristics in five key categories: (1) process (the
approaches they take to execute daily expense management operations); (2)
organization (corporate focus and collaboration among stakeholders); (3)
knowledge management (contextualizing expense data and exposing it
to key stakeholders); (4) technology (the selection of the appropriate
tools and the effective deployment of those tools); and (5) performance

management (the ability of the organization to measure its expense
management results to improve its business). These characteristics
Fast Facts
√ Best-in-Class companies are
64% more likely than all
others to align expense
management processes and
programs and the
achievement of greater
corporate objectives
√ The average business
traveler saves three hours
per month of productivity by
leveraging a mobile travel
and expense management
application / portal
T&E Expense Management
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(identified in Table 3) serve as a guideline for best practices, and correlate
directly with Best-in-Class performance across the key metrics.
Table 3: The Competitive Framework
Best-in-Class Average Laggards
Process
Formal business travel group (standardized processes for
management of business travel)
75% 62% 45%

Documented processes for submission of expense reports
96% 83% 72%
Organization
Alignment between expense management and overall
corporate goals / objectives
69% 34% 15%
Knowledge
Real-time visibility into travel spending against budget
63% 36% 27%
Real-time reviews of pre-trip travel against budget
60% 31% 21%
Technology
Expense management technology solutions / tools in place:
 82% end-to-end
expense
management
solution
 80% automated
data analytics /
reporting / BI
 78% commercial
card / expense
management
integration
 67% automated
billable time-
and-travel
management
 41% mobile
travel / expense

management
application
 36% end-to-end
expense
management
solution
 44% automated
data analytics /
reporting / BI
 51% commercial
card / expense
management
integration
 28% automated
billable time-
and-travel
management
 30% mobile
travel / expense
management
application
 32% end-to-end
expense
management
solution
 31% automated
data analytics /
reporting / BI
 44% commercial
card / expense

management
integration
 21% automated
billable time-
and-travel
management
 25% mobile
travel / expense
management
application
Performance
Expense management performance-tracking capabilities:
 81% regular
reporting on
policy
compliance
 75% regular
audits of
expense reports
 40% regular
reporting on
policy
compliance
 66% regular
audits of
expense reports
 34% regular
reporting on
policy
compliance

 41% regular
audits of
expense reports
Source: Aberdeen Group, February 2012
T&E Expense Management
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Expense Management Capabilities
The Competitive Framework detailed in Table 3 serves as a comprehensive
guide to the Best-in-Class T&E expense management program. The
capabilities of these top-performing organizations span a scope of
competencies related to processes, organization / collaboration, knowledge
and spend management, and performance-tracking attributes.
Process: Standardized / Documented Processes
Standardization
and formalization are not new capabilities in the expense
management world, however, these simplified proficiencies should be
considered basic cornerstones for any organization's expense management
program. Having a formal internal travel group, or standardized processes
for management of all business travel, ensures that business travelers follow
a set of guidelines for planning corporate travel and adhere to those same
policies while on the road. Best-in-Class organizations are 29% more likely
than all others to have this capability as part of their program, which is a
likely contributor to their high level of corporate travel policy compliance.
On a similar note, documented processes for submission of expense
reports, a capability in place in 19% more top-performing companies than all
others, reinforces approval workflow trees and points travelers in the

proper direction in regards to which executive is responsible for approving
their expenses.
Organization: Alignment between Expense Management
and the Greater Enterprise
One often overlooked yet critical component of next-generation expense
management is the alignment between expense management processes and
programs and the achievement of greater corporate objectives. This
capability, in place in 64% more Best-in-Class organizations than all others,
supports the notion of expense management as a truly strategic internal
function and links the efficiencies of effective expense management with
corporate financial goals, as helping to curb non-compliant travel and drive
down expense-processing costs can significantly improve the bottom-line.
Knowledge Management: The Real-Time Factor
The next-generation expense management program built by Best-in-Class
organizations relies upon the knowledge, visibility and intelligence into
several key aspects of business travel, such as spending, suppliers, and the
ramifications of travel on the overall company. Best-in-Class companies are
50% and 57% more likely, respectively, to have real-time visibility into travel
spending against corporate budgets and real-time visibility into pre-trip
travel against corporate budgets. These real-time factors help top-
performing organizations enact executive decisions in regards to travel
when forecasting, planning and budgeting. When experiencing a revenue
shortfall or other negative financial situations, Best-in-Class organizations
can easily view, in real-time, current and planned business travel and alter
itineraries or outright cancel trips.
“Our expense management
solution has provided better
controls and is easy to use for
travelers. The electronic
approval workflow is less time-

consuming and has driven cost
savings.”
~ Finance Manager, Large
Health Services Company
T&E Expense Management
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Performance Management: Compliance and Auditing
A significant component of the Best-in-Class expense management program
is regular monitoring of compliance to corporate travel policies and
guidelines. This capability, in place in 54% more Best-in-Class organizations
than all others, involves regular reporting on policy compliance to ensure
that business travelers are planning and executing trips that adhere to pre-
negotiated agreements with suppliers and conform to organizational rules
regarding airfare, ground travel and meals.
Similarly, regular auditing (a capability in place in 29% more Best-in-Class
organizations than all others) of expenses can help pinpoint instances of
employee expense fraud or, like the capability in the previous paragraph,
identify those expenses that have exceed the limits set forth by enterprise
guidelines and policies.
Best-in-Class Technology Utilization
Any next-generation T&E expense management program is contingent on the
reliance on core technology solutions and automation of key expense
management process. As detailed in Figure 4, Best-in-Class organizations are
making use of technology to support their programs and drive ultimate value.
Figure 4: Best-in-Class Technology Utilization

Source: Aberdeen Group, February 2012
The technology solutions listed in Figure 4 are critical components of the
next-generation expense management program. Best-in-Class companies
consider these solutions to be cornerstones in the improvement of key
expense management processes. In fact, utilization of these core, automated
enhancers has driven a superior level of performance in all organizations
currently leveraging these solutions:
• End-to-end T&E expense management solutions, in place in 57%
more Best-in-Class organizations than all others, streamline and
n=140
“Expense management
technology has lowered the
costs of processing expenses
and standardized the business
value of T&E.”
~ Procurement Director, Public
Sector
T&E Expense Management
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automate all facets of modern expense management, including
travel-booking, expense submission, creation and approval
workflow, reimbursement and support back-end analytics. End-to-
end solutions are hosted via the cloud, secured on-premise, or
leveraged as a hybrid mix. (Please read the Aberdeen Insight at the
end of this chapter for additional information on how the cloud fits
into the future of expense management). Aberdeen research has

found that users of end-to-end solutions have experienced 55%
lower expense-processing costs and 37% higher rate of corporate
travel policy compliance than organizations not currently utilizing
this technology.
• The benefits of mobile solutions have been detailed in previous
Aberdeen research, however, it can be said that putting the power
of greater expense management technology directly into the hands
of both executives (approve expenses, view current trips for
employees, gain access to spend information, etc.) and business
travelers (change itineraries, book reservations and ground travel,
digitally attach receipts to expenses, create and submit expenses,
etc.). Best-in-Class organizations are 33% more likely than all others
to have this "pillar" of expense management as a core component of
their programs. Aberdeen research has found that the average user
of mobile technology saves over three hours per month of
productivity by directly leveraging a mobile expense management
application / portal.
Analytics: A Next-Generation Enabler
Business travel, along with other complex spend arenas (such as contingent
workforce management, strategic meetings management, printed materials /
services management, etc.), has evolved in recent years to become a crucial
component of overall strategic corporate planning. With nearly 70% of
organizations viewing T&E expense management as a moderately-to-highly
strategic function, it becomes necessary to gain the necessary information
and intelligence to accurately link the spending and ramifications of
corporate travel with the goals and objectives of the greater organization.
Best-in-Class companies are 53% more likely than all others to include
automated analytics, reporting and Business Intelligence (BI) capabilities as
part of their expense management program. The following analytical
attributes have enhanced the modern T&E expense management program

and helped Best-in-Class organizations drive an unheralded level of visibility
into expense spending and overall T&E intelligence:
• Top-performing organizations are 76% more likely than all other
companies to link the information / intelligence generated via
analytics to executive-office planning and budgeting. With revenue
plans scrutinized and every spent dollar playing a major role within
organizational programs, it is critical for organizations to feed the
executive office with intelligence regarding the value of business
travel and how executives can forecast on an enterprise-wide basis
utilizing knowledge from analytics, reporting and BI.
“The cloud has enabled us to
easily implement one solution
globally across all locations.”
~ Finance Manager, Large
Pharmaceutical Manufacturer
T&E Expense Management
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• Best-in-Class companies are 60% more likely than all others to track
and monitor the ROI of business travel via analytics. This factor
helps these top-performing organizations measure the true value of
any business trip and can assist in determining whether future travel
is necessary for business development.
• Best-in-Class organizations are nearly 30% more likely to utilize
analytics to identify savings opportunities within T&E spend
information. By understanding the volume of spending with key
suppliers, this information can be leveraged by the procurement and

sourcing units to negotiate discounts with airlines, hotels and other
travel providers.
Aberdeen Insights — Technology: Expense Management
Roadmap
As evidenced throughout this research study, technology plays a pivotal
role in the modern T&E expense management program. However, when
looking at how next-generation capabilities will affect the landscape of
solutions within the expense management space, Aberdeen research has
discovered that "the cloud" is targeted as a long-term solution within the
average organization's expense management technology roadmap (Figure
5).
Figure 5: Expense Management Technology Roadmap

Source: Aberdeen Group, February 2012
In looking at the future of expense management technology, the vast
majority (73%) of organizations are expected to leverage either a cloud-
based / SaaS or hybrid mix (cloud and on-premise) solution. This directly
reflects the "next-generation" aspect of T&E expense management over the
next decade. Organizations will look to the cloud for simple accessibility
for all executives and business travelers, as well as the real-time
components of analytics and reporting.
n=140
T&E Expense Management
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Chapter Three:
Required Actions

The next-generation T&E expense management program is built on a
framework of attributes that address process, collaborative, visibility and
intelligence initiatives. The following recommendations for actions can help
organizations on the lower spectrum of the Maturity Class Framework
reach a Best-in-Class level of expense management efficiency.
Laggard Steps to Success
• Develop visibility into aggregate T&E spending across the
entire organization. Visibility is a core competency in the greater
scope of expense management; in fact, Industry Average
organizations are 40% more likely than Laggards to have this type of
visibility into enterprise-wide spending on business travel. In order
for Laggard organizations to implement programmatic strategies,
they must first ensure that they know the level of spending on travel
across all business units.
• Formalize and standardize major processes related to T&E
expense management. Similar to the previous recommendation,
it is crucial for Laggard enterprises to first master basic
competencies before embarking into complex programs. Industry
Average organizations are 31% more likely than Laggards to have
formalized travel management processes (including a formal travel
management group), which contributes to an understanding on
spending on this area and how it effects the entire organization.
Industry Average Steps to Success
• Develop real-time visibility into significant aspects of T&E
expense management, such as spending against budget and
pre-trip travel information. Best-in-Class organizations are
nearly 60% more likely than Industry Average organizations to hold
real-time visibility into travel spending against corporate budgets;
this is a critical factor in truly understanding the ramifications of the
T&E category and ensuring that planned travel can be altered or

canceled if the organization faces unforeseen financial shortfalls.
• Leverage reliable and next-generation technology solutions
to enhance management of T&E expenses. Best-in-Class
companies are 56% and 27% more likely than Industry Average
organizations, respectively, to utilize end-to-end expense
management solutions and mobile travel and expense applications /
mobile-optimized web portals. These two specific technological
attributes automate and streamline key expense management
processes, and in the case of mobile solutions, help both business
travelers and corporate executives tap into the power of end-to-
end technology while on the road or away from the office.
Fast Facts
√ Industry Average companies
are 40% more likely than
Laggards to have visibility
into aggregate T&E spending
√ Best-in-Class companies are
56% and 27% more likely
than Industry Average
organizations, respectively,
to utilize end-to-end
expense management
solutions and mobile travel
and expense applications /
mobile-optimized web
portals
T&E Expense Management
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Best-in-Class Steps to Success
• Continue to reap the benefits of corporate card and
expense management integration. Although 72% of Best-in-
Class organizations are currently leveraging this union to drive a
truly holistic expense management process, it is critical for Best-in-
Class companies to fully-maximize the value of integration. An
already-superior level of spend intelligence can be improved, and
procurement and sourcing teams will benefit from increased
visibility into the global supplier base.
• Utilize enhanced capabilities of mobile applications /
portals to improve collaboration between regional units
and corporate locations. Only 41% of Best-in-Class organizations
are currently leveraging this nuanced mobile capability, which can
inform business travelers where and when their peers are on the
road. This information can spark collaborative development
between units / divisions that do not often have the opportunity to
strategize in a formal, in-person setting.
Aberdeen Insights — Summary
Last year's Expense Management for a New Decade research study
heralded specific components of expense management that will play
significant roles as the new decade progresses. As detailed in Chapter
One, the pillars of Best-in-Class T&E expense management (integration,
analytics and mobile) are perfect cornerstones for any organization
looking to drive their expense management program into a truly strategic
stratosphere.
For organizations on the lower spectrum of Aberdeen's Maturity Class
Framework, it is critical to understand and master core competencies,
such as formalized processes and the development of initiatives that can

spur higher visibility into both T&E spending and usage.
To build the next-generation T&E expense management program, as
Best-in-Class organizations have done, companies across the globe must
educate themselves on the benefits of end-to-end technology and
corporate card integration, and utilize more modern attributes, such as
analytics and mobile applications / portals, to round out an efficient set of
processes that can improve the strategic value of expense management.

“[Our cloud-based expense
management solution] has
drastically changed our
processes for the better. It is
less costly and control and
reporting aspects are superior.”
~ Corporate Executive, Small
Wholesale / Distribution
Organization
T&E Expense Management
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© 2012 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
Appendix A:
Research Methodology
Between January and February 2012, Aberdeen examined the use, the
experiences, and the intentions of 140 enterprises.
Aberdeen supplemented this online survey effort with telephone interviews
with select survey respondents, gathering additional information on T&E
expense management strategies, experiences, and results.

Responding enterprises included the following:
• Job title: The research sample included respondents with the
following job titles: manager / general manager (37%); director
(22%); C-level (16%); SVP / VP (11%); and others.
• Department / function: The research sample included respondents
from the following departments or functions: procurement, supply
chain, or logistics (23%); finance (15%); business development / sales
(13%); corporate management (12%); human resources (5%);
operations (5%); marketing (3%); and others.
• Industry: The research sample included respondents from the
following industries: manufacturing (21%); software (11%); financial
services (10%); public sector (8%); transportation / logistics (5%);
retail (5%); and 25 others.
• Geography: The majority of respondents (66%) were from North
America. Remaining respondents were from the EMEA (19%), Asia-
Pacific (10%) and South / Central America (5%) regions.
• Company size: Forty-seven percent (47%) of respondents were from
large enterprises (annual revenues above US $1 billion); 27% were
from midsize enterprises (annual revenues between $50 million and
$1 billion); and 26% of respondents were from small businesses
(annual revenues of $50 million or less).
• Headcount: Sixty-two percent (62%) of respondents were from large
enterprises (headcount greater than 1,000 employees); 19% were
from midsize enterprises (headcount between 100 and 999
employees); and 19% of respondents were from small businesses
(headcount between 1 and 99 employees).

Study Focus
Responding executives
completed an online survey
that included questions
designed to determine the
following:
√ The degree to which T&E
expense management is
deployed in their retail
operations and the financial
implications of the
technology
√ The structure and
effectiveness of existing T&E
expense management
implementations
√ Current and planned use of
T&E expense management
to aid operational and
promotional activities
√ The benefits, if any, that have
been derived from T&E
expense management
initiatives
The study aimed to identify
emerging best practices for
expense management, and to
provide a framework by which
readers could assess their own

management capabilities.

T&E Expense Management
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© 2012 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
Table 4: The PACE Framework Key
Overview
Aberdeen applies a methodology to benchmark research that evaluates the business pressures, actions, capabilities,
and enablers (PACE) that indicate corporate behavior in specific business processes. These terms are defined as
follows:
Pressures — external forces that impact an organization’s market position, competitiveness, or business
operations (e.g., economic, political and regulatory, technology, changing customer preferences, competitive)
Actions — the strategic approaches that an organization takes in response to industry pressures (e.g., align the
corporate business model to leverage industry opportunities, such as product / service strategy, target markets,
financial strategy, go-to-market, and sales strategy)
Capabilities — the business process competencies required to execute corporate strategy (e.g., skilled people,
brand, market positioning, viable products / services, ecosystem partners, financing)
Enablers — the key functionality of technology solutions required to support the organization’s enabling business
practices (e.g., development platform, applications, network connectivity, user interface, training and support,
partner interfaces, data cleansing, and management)
Source: Aberdeen Group, March 2012
Table 5: The Competitive Framework Key
Overview


The Aberdeen Competitive Framework defines enterprises
as falling into one of the following three levels of practices

and performance:
Best-in-Class (20%) — Practices that are the best
currently being employed and are significantly superior to
the Industry Average, and result in the top industry
performance.
Industry Average (50%) — Practices that represent the
average or norm, and result in average industry
performance.
Laggards (30%) — Practices that are significantly behind
the average of the industry, and result in below average
performance.

In the following categories:
Process — What is the scope of process
standardization? What is the efficiency and
effectiveness of this process?
Organization — How is your company currently
organized to manage and optimize this particular
process?
Knowledge — What visibility do you have into key
data and intelligence required to manage this process?
Technology — What level of automation have you
used to support this process? How is this automation
integrated and aligned?
Performance — What do you measure? How
frequently? What’s your actual performance?
Source: Aberdeen Group, March 2012
Table 6: The Relationship Between PACE and the Competitive Framework
PACE and the Competitive Framework – How They Interact
Aberdeen research indicates that companies that identify the most influential pressures and take the most

transformational and effective actions are most likely to achieve superior performance. The level of competitive
performance that a company achieves is strongly determined by the PACE choices that they make and how well they
execute those decisions.
Source: Aberdeen Group, March 2012
T&E Expense Management
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© 2012 Aberdeen Group. Telephone: 617 854 5200
www.aberdeen.com Fax: 617 723 7897
Appendix B:
Related Aberdeen Research
Related Aberdeen research that forms a companion or reference to this
report includes:
• Expense Management for Professional Services
; January 2012
• The Mid-Market Expense Management Program; September 2011
• Mobile Technology: Filling the Gap in Modern Expense Management;
May 2011
• Expense Management for a New Decade; February 2011
• The State of T&E Expense Management; February 2010
• T&E Expense Management Automation: Reduce Costs, Improve Control;
June 2009
Information on these and any other Aberdeen publications can be found
at
www.aberdeen.com
.

Author: Christopher J. Dwyer, Senior Research Analyst, Global Supply
Management ()
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