Centralized vs. decentralized travel booking

Managing travel for work can feel like a constant trade-off between a process that controls costs and frustrates travelers, or having expenses delivered in a disorganized way that overwhelms your finance team.

Most companies fall into one of two travel booking approaches: decentralized or centralized, but both approaches result in time-consuming ‘shadow work‘, like chasing approvals and hunting down receipts. In fact, Perk’s ‘The cost of shadow work’ report found that employees spend, on average, 7 hours a week on these tasks.

In this article, we will break down both the differences between centralized and decentralized travel booking approaches, before explaining how you can get the best of both worlds by corporate travel planning with Perk’s intelligent solutions.

What is a centralized travel booking system?

A centralized travel booking system is the traditional approach, where a finance team or a specific individual handles all travel management and bookings using a single system.

Rather than booking their own flights, travelers submit a request, and the finance manager completes the process of finding options, ensuring policy compliance, approval, and booking on their behalf.

Who is it for? Companies that are looking to manage and streamline the entire process of booking work travel.

The pros and cons of traditional centralized travel management

Pros

• Spend control: With all the travel spend recorded in one place, finance teams can carefully manage budgets.

• High policy compliance: A dedicated manager ensures that every trip complies with company policy, from preferred vendors to class of service.

• Insights: All your travel data flows through one system, giving you powerful insights for budgeting and negotiating better rates with airlines and hotels.

• Stronger duty of care: You have an overview of where all your travelers are, which is critical for safety and emergency response, as well as fulfilling duty of care responsibilities.

Cons

• Approval wait times: This approach forces travelers to wait for approvals, which can be a frustrating problem for last-minute trips or when plans change suddenly.

• Low flexibility: Travelers often feel micromanaged and have little to no say in their travel options.

What is a decentralized travel booking system?

A decentralized travel booking system allows teams and individuals to manage and book their own travel. Travelers typically pay on a company card or get reimbursed for expenses after the trip.

This approach provides speed and autonomy for the traveler, but can make travel management a challenge, especially when it comes to ensuring policy adherence and reporting.

Who is it for? Startups and small businesses with informal policies and a focus on speed and employee autonomy.

The pros and cons of decentralized travel management

Pros

• Maximum traveler flexibility: Travelers can book flights, hotels, and times that work best for them.

• High employee satisfaction: Travelers feel trusted and empowered, which can be great for company culture.

• Fast approval: There's no waiting for a manager to approve a request.

Cons

• No cost control: Travel managers have limited visibility into travel spending until the final expense report is filed. This is especially challenging for group travel.

• Policy non-compliance: Without guardrails, travelers are more likely to book what's convenient, not what's cost-effective or in line with policies.

• Fragmented data: Travel expenses are spread across multiple websites, making it difficult to see the total travel spend or identify saving opportunities.

• 'Shadow work' for the finance team: The finance team has to manually reconcile all the receipts and expenses.

• Impact on duty of care: It's difficult to track traveler locations when bookings are scattered, which is a major risk in an emergency.

Centralized vs. decentralized: A side-by-side comparison

Which model suits your needs?

• If you are a small startup: A decentralized model might work for a while, but it will become an issue as the company scales.

• If you are a scaling business: A centralized platform becomes essential as you will need closer control of your costs and to free up your team's time.

• If you are a large enterprise: A centralized model is non-negotiable for compliance, cost control, and duty of care.

When to choose a centralized model

If your primary goals are cost control and policy compliance, a centralized model is the best of these two options, though this approach can impact traveler flexibility.

When to choose a decentralized model

If you are part of a startup or small business where speed and employee autonomy are crucial to your company culture, a decentralized model will allow for agility. However, this will be at the cost of having fragmented data for expense reporting and planning future trips.

The issue is that both models, while they have their own benefits, result in a compromise between controlling costs and limiting travelers, or allowing more freedom for travelers and creating avoidable challenges for the finance team. Luckily, you no longer have to choose, as there is a third option.

A third option: All-in-one travel management solutions

Intelligent travel tracking and management platforms, like Perk, combine the benefits of traditional centralized and decentralized travel booking systems into a simple, streamlined process

• Perk enforces policies automatically, so managers only need to review the exceptions, not every single trip.

• Your team books and pays for travel in one place, eliminating the chase for receipts and manual expense reports.

• The platform captures and consolidates data automatically, giving finance real-time insights without having to hunt down fragmented data.

• Instant updates allow for quick changes of plan e.g., to avoid travel disruption.

Older models of travel management don’t solve ‘shadow work’, they just shift the burden between travelers and their travel managers. The key to a hybrid model is automation of the business travel approval process and transparency for everyone involved

• Employees traveling for work get a simple, fast way to book the transportation and accommodation they need from a massive travel inventory.

• Travel management teams get a comprehensive overview of integrated itineraries and built-in budget and policy management automation.

• Both enjoy complete care and full flexibility to manage unexpected travel issues and cancellations.

Simplify travel for work with Perk

The choice is no longer between strict control and confusion. An all-in-one travel management platform automates, simplifies, and organizes, reducing shadow work and stress across the whole trip.

Perk is the intelligent platform for managing work travel. Our platform lets you book travel for work using the world's largest travel inventory and integrate your travel policies, itineraries, and expenses directly into a central hub, giving you total control and visibility.

Book a demo to see how Perk can simplify travel management for your business.