Because business travel expenses nose area upward, companies are noticing that better cost-management techniques can make a big difference
US. corporate travel expenses rocketed to more than $143 billion in 1994, according to North american Express’ most recent study on business travel management. Private-sector employers spend an estimated $2, 484 every employee on travel and entertainment, a 17 percent increase over the previous four years. portugal city tours
Corporate T&E costs, now the third-largest controllable expense behind sales and data-processing costs, are under new scrutiny. Companies are realizing that even a savings of just one percent or 2 percent can translate into millions of dollars included with their bottom line.
Personal savings of this order are sure to get management’s attention, which is a necessity for this manner of job. Involvement commences with understanding and evaluating the components of T&E management in order to control and monitor it more effectively.
Hands-on management includes determining responsibility for travel management, implementing a quality-measurement system for travel services used, and writing and circulating a formal travel insurance plan. Only 64 percent of U. S. corporations have travel policies.
In spite of elderly management’s support, the street to savings is rocky-only one in three companies has successfully instituted an inside program that will help cut travel expenses, and the myriad areas of travel are so overwhelming, normally don’t know where to start. “The industry of travel is based on information, ” says Steven R. Schoen, founder and CEO of The Global Group Inc. “Until such time as a traveling actually sets foot on the plane, they’ve [only] been purchasing information. ”
Well, information technology seems a feasible destination to hammer out those elusive, but highly desired, savings. “Technological innovations in the business travel industry are allowing businesses to realize the potential of automation to regulate and reduce indirect [travel] costs, ” says Roger H. Ballou, president of the Travel Services Group USA of American Exhibit. “In addition, many companies are embarking on quality programs which include superior process improvement and reengineering initiatives designed to substantially improve T&E management processes and reduce indirect costs. inch
As companies look to technology to make potential savings a reality, they can get very creative about the techniques they make use of.
The Great Leveler
Central reservation systems were long the exclusive domain of travel agents and other industry professionals. But all of that changed in November 1992 when a Department of Transportation ruling allowed the general public usage of systems such as Apollo and SABRE. Travel-management software, such as TripPower and TravelNet, immediately sprang up, providing corporations insight into where their T&E dollars are being spent.
The software tracks spending trends by interfacing with the businesses database and providing get to centralized reservation systems that provide immediate booking information to airlines, hotels and car rental firms. These programs also allow users to generate advanced travel reports on cost savings with details on where discounts were obtained, hotel and car use and patterns of travel between cities. Actual data gives corporations added leveraging when negotiating discounts with travel suppliers.
“When you own the information, you don’t have to get back to square one each and every time you determine to change agencies, ” says Mary Savovie Stephens, travel manager for biotech large Chiron Corp.
Sybase Incorporation., a client/server software head with an gross annual T&E budget of more than $15 million, agrees. “Software gives us unprecedented presence into how employees are spending their travel us dollars and better leverage to negotiate with travel service suppliers, ” says Robert Lerner, director of credit and corporate travel services for Sybase Inc. “We have better use of data, faster, in a current environment, which is expected to bring us big savings in T&E. Today we have control of our travel information without longer have to rely exclusively on the organizations and airlines. “