Base Tendriling Travel Expenses
As business travel expenses nose upward, companies are realizing that better cost-management techniques can make any difference
US. corporate travel expenses rocketed to 16 seater minibus manchester more than $143 thousand in 1994, according to American Express’ most recent survey on business travel management. Private-sector employers spend around $2, 484 per employee on travel and entertainment, a teen percent increase over the past four years.
Corporate T&E costs, now the third-largest manageable expense behind sales and data-processing costs, are under new scrutiny. Firms are realizing that a good savings of 1 percent or 2 percent can lead to sums of money added to their bottom line.
Savings of these order will automatically get management’s attention, which is a dependence on this type of project. Involvement begins with understanding and evaluating the components of T&E management in order to control and monitor it more effectively.
Hands-on management includes working out responsibility for travel management, implementing a quality-measurement system for travel services used, and writing and distributing a formal travel policy. Only sixty four percent of You. S. firms have travel policies.
Even with senior management’s support, the street to savings is rocky-only one in three companies has successfully instituted an internal program that will help cut travel expenses, and the myriad facets of travel are so overwhelming, most companies don’t know where to begin. “The industry of travel is based on information, inch says Steven Ur. Schoen, founder and CEO of the Global Group Inc. “Until such time as a voyager actually sets foot on the aircraft, they’ve [only] been purchasing information. inch
If you do, information technology seems a viable destination for a hammer out those elusive, but highly sought-after, savings. “Technological innovations in the business travel industry are allowing firms to realize the potential of automation to regulate and reduce roundabout [travel] costs, inch says Roger They would. Ballou, us president of the Travel Services Group USA of American Express. “In addition, many companies are beginning quality programs that is included in sophisticated process improvement and reengineering efforts designed to significantly improve T&E management processes and reduce roundabout costs. inch
As companies look to technology to make potential savings a reality, they can get very creative about the methods they employ.
The great Leveler
Centralized reservation systems were long the exclusive domain of travel agents and other industry professionals. But all that changed in December 1992 when a Department of Transportation lording it over allowed the general public access to systems such as Apollo and SABRE. Travel-management software, such as TripPower and TravelNet, immediately sprang up, providing firms insight into where their T&E dollars are increasingly being spent.
The software tracks spending trends by interfacing with the firm’s database and providing access to centralized reservation systems offering immediate reservation information to flight companies, hotels and car rental agencies. These programs also allow users to generate computerized travel reports on cost benefits with information on where discounts were obtained, hotel and car usage and patterns of travel between cities. Actual data gives firms added leverage when talking discounts with travel suppliers.
“When you keep the information, you don’t have to go back to sq one every time you may change agencies, inch says Betty Savovie Stephens, travel manager for biotech giant Chiron Corp.
Sybase Inc., a client/server software leader with an annual T&E budget greater than $15 million, believes. “Software gives us freakish visibility into how employees are spending their travel dollars and better leverage to negotiate with travel service suppliers, inch says Robert Lerner, director of credit and corporate travel services for Sybase Inc. “We have better access to data, faster, in a real-time environment, which is expected to bring us big savings in T&E. Today we have control over our travel information and no longer have to depend exclusively on the agencies and flight companies. inch
The cost for this benefit depends on the actual of business. One-time purchases of travel-management software can run from under $100 to more than $125, 000. Some software providers will accommodate smaller users by selling software piecemeal for $5 to $12 per reserved trip, still a significant savings from the $50 industry convention per transaction.
No more Tickets
Paperless travel is catching on faster than the paperless office ever did as both carrier’s networks and consumers work together to reduce ticket prices for business travelers. Maybe the most cutting-edge of the advances is “ticketless” travel, which almost all major flight companies are testing.
At the same time, travel providers and agencies are refining new technologies permit travelers to book travel services via the internet, e-mail and unattended ticketing kiosks. Best Western International, Hyatt Hotels and several other major hotel chains market on the internet. These services reduce the need for paper and offer better service and such peripheral benefits as increased efficiency, improved tracking of travel expenses and trends, and cost reduction.
Dennis Egolf, CFO of the Veterans Affairs Hospital in Louisville, Ky., realized that the medical center’s decentralized location, a quarter-mile from the hospital, made efficiency difficult. “We were losing production time and things got lost, inch he says. “Every memo must be hand-carried for approval, and we required seven different copies of each travel order. inch As a result, Egolf tried an off-the-shelf, paper-reduction software package designed for the government.