Running a mid-sized startup and finding it difficult to manage corporate travel expenses for your staff across levels?
Conceptualised as a travel booking platform in 2015, Bengaluru-based Insteract is a cloud-based intelligent travel agent that manages travel policies and finds the most cost effective option.
“The biggest problem in business travel management is the legacy system that still exists, while all other functions have modernised. Finding the lowest possible fares in line with company policies needs an intelligent discovery tool. Most cost overheads in business travel is because they end up paying more for a travel itinerary,” says Balaji Ramakrishnan, co-founder & CEO of Insteract Technologies.
The platform allows corporates to procure content from global travel management companies, regional online travel aggregators and global travel suppliers.
The internal algorithm of the tool connects to systems of various suppliers and content providers to throw up comprehensive set of travel deals and corporate fares in a single system.
It also pulls up trade deals that would not be visible to you and me. It provides relevant and cheapest available fare to employee as per the company policy and approval workflow from various Travel Management Companies (TMCs) and Online Travel Aggregators (OTAs).
The company has layered the platform with data analytics and machine learning which helps the system curate the search process and show you only a few but relevant trip options.
It learns from your preferences and behaviour and finds you deals that are beyond what is available on the market.
It also rewards travellers if they forego their preferred flight and instead book the system recommended lowest fare flight with discount coupons or other benefits.
Insteract’s clients also get a share of the cost benefit when the platform manages to find a cheaper flight than the ones available on OTAs.
Of the 10 largest business travel markets across the world, Indian corporate travel space is the fastest growing. India’s business travel market is over Rs 31 billion, growing at 12% annually.
Insteract’s focus group - SME - alone spends over Rs 1.5 crore on travel annually.
But all functions such as finding the lowest fares, booking flights, confirming bookings, and managing risks, are arranged using an internal travel desk or by an ad-hoc admin personnel.
“Most companies have a loosely defined, or no travel, policy. Email is still the preferred tool – 90% of corporate - to plan and approve travels. While the internet has changed how we plan and personalise our travel experience, corporate booking tools still operate in the old way,” Ramakrishnan says.
Inefficient system of travel booking makes it difficult for companies to audit the transaction for any gaps in the policy.
He estimates that an inefficient process such as e-mail requests, multiple approval cycles, and lack of tools increase the cost of managing travel by 30-40 percent.
According to him, for every one rupee spent on travel, Rs 1.25 to Rs 1.50 is the cost of managing that travel.
Suppose a company has 1,000 employees, and about 70-100 are frequent fliers, the company is bearing cost of managing travel for all 100, which translates into the cost of travel management.
This happens primarily because of manual benchmarking of fares, which is faulty, leaving a majority of savings on the table.
This notional loss, in fact, was the hardest to explain to the companies, Ramakrishnan says.
“Most companies don’t even know they are over paying and losing money in the process due to inefficient processes.”
Insteract, therefore, channelled their efforts towards a few tech savvy sectors such as IT, pharma, and automobile industries, to get a headway.
“There are studies that say the companies that automate travel, save about 60-70 perc on travel management cost. Those who choose data analytics save 25-30 percent in costs,” Ramakrishnan says.
Using Insteract, companies can find options that are on an average 20 percent lower and save as much as 40 percent on the cost of managing travel, claims Ramakrishnan.
The solution to this, he says, is to drive policies and guidelines around the employees or the traveller.
Travel policies should be geared towards keeping costs down, which requires focus on minute details such as the type of trip that is acceptable, how to book, how to expense it and so on.
“The problem is these rules are not updated or benchmarked often to capture the supplier changes and the behaviour pattern of the travellers,” he explains.
Insteract collects user data through the platform and helps companies revisit their benchmarks on a regular basis. The data can also influence travel policies than policies trying to determine user behaviour.
“For instance, almost all companies have a 14-day pre-booking policy. But most of the times it doesn’t happen. It is important to know why and change policies accordingly,” Ramakrishnan says.
Insteract, which currently deals only with flights, is aiming to be a door-to-door service aggregator for business travellers.
The company plans to enter trains and buses segment too, but is taking its time.
Eventually, the company wants to move to a full-stack model where it will also have presence in arranging local travel and hotels at the destination an employee is travelling to.
The startup also wants to license its platform for larger corporate to use it, “but the platform is not yet ready for it,” Ramakrishnan says.