Centralised vs. decentralised travel booking

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

Most companies fall into one of two travel booking approaches, decentralised or centralised, but both result in time-consuming ‘shadow work' like chasing receipts, manual approvals, and cross-checking policies. 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 centralised and decentralised 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 centralised travel booking system?

A centralised travel booking system is the traditional approach, where a finance team, or a specific individual, manages all travel and bookings through a single system.

Rather than booking their own flights, travellers submit a request, and a dedicated 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 centralised travel management

Pros

• Spend control: With all the travel spend recorded in one place, budgets can be carefully managed.

• 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 travellers are, which is critical for safety and emergency response, and to fulfil duty of care responsibilities.

Cons

• Approval wait times: Travellers are forced to wait for approvals, which can be a frustrating problem for last-minute trips.

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

What is a decentralised travel booking system?

A decentralised travel booking system allows teams and individuals to manage and book their own travel. Travellers typically make payments on a company card or are reimbursed for other expenses after the trip.

This approach provides speed and autonomy for the traveller, but can make travel management, ensuring travellers adhere to policies, and reporting, a challenge.

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

The pros and cons of decentralised travel management

Pros

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

• High employee satisfaction: Travellers 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 traveller files their expenses. This is especially challenging when managing group travel.

• Policy non-compliance: Without guardrails, travellers 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 traveller locations when bookings are made across multiple platforms, which could be a major risk in an emergency.

Centralised vs. decentralised: A side-by-side comparison

Which model suits your needs?

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

• If you are a scaling business: A centralised 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 centralised model is non-negotiable for compliance, cost control, and duty of care.

When to choose a centralised model

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

When to choose a decentralised model

If you are part of a startup or small business where speed and employee autonomy are crucial to your company culture, a decentralised 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 forced compromise between controlling costs and limiting travellers, or allowing more freedom for travellers and creating avoidable challenges for the finance team. Luckily, you no longer have to choose, as there is now a third option.

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

Modern travel tracking and management platforms, like Perk, combine the benefits of traditional centralised and decentralised travel booking systems into a simple, streamlined process

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

• Travel is booked and paid for in one place, eliminating the chase for receipts and manual expense reports.

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

• 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 travellers 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 transport 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 organises, 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.