Digital Transformation in Aerospace, Defense, and Government Contracting: How T&E Modernization Improves Compliance and Efficiency

In the highly regulated and complex world of aerospace, defense, and government contracting, outdated travel and expense (T&E) processes are more than just an inconvenience—they’re a liability. Research suggests that inefficiencies in T&E management can lead to as many as 20% of expense reports being delayed or lost. This heightens the risk of triggering Defense Contract Audit Agency (DCAA) audit issues and poses significant compliance challenges.

As organizations adapt to shifting regulations, growing complexities, and heightened scrutiny, modernizing T&E systems moves from a nice-to-have to a strategic imperative. Paired with effective change management strategies, digital transformation can create efficiencies, improve compliance, and help organizations stay ahead in an increasingly competitive landscape.

Digital Transformation in Aerospace, Defense, and Government Contracting

The aerospace, defense, and government contracting industry is experiencing a significant shift in travel patterns, particularly with the rise of immediate group travel for project collaboration. These changes demand sophisticated T&E management solutions that can handle the complexities of a dispersed workforce.

Digital transformation in this sector isn't just about adopting new technology—it's about revolutionizing how organizations track, manage, and optimize travel expenses while maintaining strict compliance standards.

Modern aerospace and defense companies increasingly rely on digital solutions to streamline their operations. With project teams spread across multiple locations and time zones, the need for efficient T&E management has never been more critical. Leaders in aerospace, defense, and government contracting must balance the demands of rapid deployment with careful expense tracking and reporting.

If you work in this industry, you know that there’s simply no room for inefficiency. When you are serving government customers and safeguarding the public, you cannot afford to let systems slow you down. Eliminating paper and automating invoice payments streamlines the process for employees, provides a more rigorous audit trail, and makes compliance reporting simpler.

With near real-time visibility into spending, organizations can seize opportunities, acting decisively and strategically during key moments of decision. This is crucial. Yet 90% of decision-makers in a recent IDC report said there’s room to improve spend controls, especially when it comes to areas like:

• Enhancing data accuracy and completeness
• Managing complex regulations and compliance policies
• Improving their ability to prevent poor spending decisions

4 Trends Shaping the Finance Function for Government Contractors in 2024 and Beyond

Download our report, 4 Trends Shaping the Finance Function for Government Contractors in 2024 and Beyond, to learn more about the latest trends and solutions driving transformation in your industry.

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In the aerospace, defense, and government contracting industry, security is more than a feature––it’s a fundamental requirement.

Robust security protocols must be integrated into every aspect of T&E management, from initial travel booking to final expense reconciliation for the smallest and biggest defense companies. This includes:

• Encrypted data transmission and storage
• Multi-factor authentication for system access
• Controlled itinerary visibility based on security clearance
• Secure document handling and storage
• Real-time monitoring of travel patterns and expenses

These security measures help protect sensitive information while ensuring compliance with government regulations. Maintaining this level of security is non-negotiable, espeically for aerospace, defense, and government contracting organizations.

Defense Contract Audit Agency (DCAA) compliance represents one of the most challenging aspects of T&E management for government contract travel expenses. The requirements include:

• Detailed documentation of all travel expenses
• Clear separation of allowable and unallowable costs
• Real-time tracking of expense allocation
• Automated compliance workflows

You also need a system that empowers you to meet DCAA audit standards with an emphasis on transparency in spending and the ability to automatically flag potential fraud or non-compliant spend.

Organizations must implement systems that automatically enforce these requirements while maintaining user-friendly interfaces to encourage adoption and compliance.

A modern T&E solution can improve your bottom line for aerospace, defense, and government contracting industries. But successful change management requires a proactive approach. Here are some best practices for implementing change within the aerospace, defense, and government contracting industry:

Successful implementation of new T&E solutions in the aerospace, defense, and government contracting industry requires a comprehensive change management strategy that addresses the unique needs of this highly regulated and specialized sector.

This strategy should:

• Involve stakeholders from all levels of the organization
• Create clear communication channels
• Establish measurable success metrics
• Develop contingency plans for potential challenges

Training programs must be tailored to the specific needs of aerospace, defense, and government contracting professionals, taking into account their technical background and security requirements. This includes:

• Role-specific training modules
• Hands-on practice sessions
• Regular feedback loops to refine processes and promote continuous improvement

Security concerns often represent the biggest hurdle in implementing new T&E systems. Organizations must address:

• Data protection requirements
• Integration with existing security protocols
• Compliance with international regulations
• Audit trail maintenance
• System access controls

Employee engagement is crucial for successful change management in the aersoapce, defense, and government contracting industry.

 Organizations should focus on:

• Simplifying expense report submission
• Streamlining travel booking processes
• Providing mobile access to T&E systems
• Offering real-time support and guidance
• Recognizing and rewarding compliance

Happy employees are more likely to embrace new systems and maintain compliance with established procedures. If employees understand how the change will direcly benefit them and make their lives easier, they are much more likely to buy in and even become champions for that change.

Organizations need support at every level to drive progress. When switching to a modern T&E system, you need buy-in from the top down. At the same time, you need to work with a T&E partner that provides a high level of service and support to provide the resources your employees need.

The best T&E solution will strike a balance between ease of use and robust security for operational efficiency—with the assurance that sensitive information will be safeguarded. Beyond the immediate technical specifications, support from a reliable T&E partner plays a pivotal role in building trust within your organization. When employees find a T&E system intuitive and secure, it reinforces their confidence in the processes and technologies they rely on daily.

So, selecting a T&E partner who prioritizes usability and provides strong support mechanisms is critical to fostering a culture of reliability and professionalism across all levels of your organization.

Download our 2024 Wakefield report, As Aerospace, Defense, & Government Contractors Seek Spend Transparency, Technology Upgrades Will Be Key, to learn more about why you need to modernize your travel and expense solutions.

Modern T&E solutions empower aerospace, defense, and government contracting organizations to address their most pressing challenges. By integrating advanced security features, ensuring DCAA compliance, and leveraging effective change management practices, organizations can:

• Streamline T&E processes
• Enhance decision-making with real-time insights
• Maintain the highest levels of security and compliance

When evaluating T&E platforms, aerospace, defense, and government contracting organizations should consider:

• FedRAMP moderate status certification
• Scalability for growing operations
• Advanced security protocols
• Efficiency-driving automation
• User-friendly interfaces

By implementing a comprehensive change management strategy and choosing the right T&E solution, aerospace, defense, and government contracting professionals can transform their operations while maintaining the highest levels of security and compliance.

Learn how SAP Concur solutions can help you modernize T&E management and give you the tools you need to comply with industry regulations, streamline your administrative processes, and stay ahead in an evolving industry.