Because business travel expenses nose area upward, companies are knowing that better cost-management techniques can make a big difference tongarra whitsundays
US. corporate travel expenses rocketed to more than $143 billion in 1994, according to North american Express’ most recent review 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.
Corporate T&E costs, now the third-largest controllable expense behind sales and data-processing costs, are under new scrutiny. Businesses are realizing that even a savings of just one percent or 2 percent can translate into millions of dollars included in their bottom line.
Cost savings of these order are sure to get management’s attention, which is a need for this kind of task. 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 setting responsibility for travel management, implementing a quality-measurement system for travel services used, and writing and releasing a formal travel insurance plan. Only 64 percent of U. S. corporations have travel policies.
Despite older 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 facets of travel are so overwhelming, additional 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 practical 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 manage 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 including complex process improvement and reengineering attempts designed to substantially improve T&E management processes and reduce indirect costs. inches
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 everything changed in November 1992 when a Department of Transportation ruling allowed the general public entry to 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 gain access to to centralized reservation systems that provide immediate booking information to airlines, hotels and car rental organizations. These programs also allow users to generate electronic travel reports on cost savings with details on where discounts were obtained, hotel and car consumption and patterns of travel between cities. Actual data gives corporations added influence when negotiating discounts with travel suppliers.
“When you own the information, you don’t have to return to square one each and every time you choose to change agencies, ” says Mary Savovie Stephens, travel manager for biotech large Chiron Corp.