Foundation Tendriling Travel Expenses
As organization journey charges nose upward, organizations are noticing that far better cost-management approaches might make chinatown staycation variation
US. company journey bills rocketed to a lot more than $143 billion in 1994, in accordance to American Express' most up-to-date survey on organization vacation administration. Private-sector companies expend an approximated $2,484 per personnel on vacation and leisure, a seventeen per cent maximize over the past 4 a long time.
Corporate T&E costs, now the third-largest controllable expense behind sales and data-processing costs, are under new scrutiny. Corporations are realizing that even a savings of 1 per cent or 2 % can translate into millions of dollars added to their bottom line.
Savings of that order are sure to get management's attention, which is a requirement for this type of project. Involvement begins with understanding and evaluating the components of T&E management in order to control and monitor it far more effectively.
Hands-on administration includes assigning responsibility for journey management, implementing a quality-measurement system for journey services used, and writing and distributing a formal travel policy. Only 64 p.c of U.S. corporations have travel policies.
Even with senior management's support, the road to savings is rocky-only one in three organizations has successfully instituted an internal program that will help cut travel bills, and the myriad aspects of travel are so overwhelming, most businesses don't know where to start. "The industry of vacation is based on information," says Steven R. Schoen, founder and CEO of The Global Group Inc. "Until such time as a passenger actually sets foot on the plane, they've [only] been purchasing information."
If that's the case, information technology seems a viable place to 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 control and reduce indirect [travel] costs," says Roger H. Ballou, president of the Vacation Services Group USA of American Express. "In addition, many companies are embarking on quality programs that include sophisticated process improvement and reengineering efforts designed to substantially improve T&E administration processes and reduce indirect costs."
As providers 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 vacation agents and other industry professionals. But all that changed in November 1992 when a Department of Transportation ruling allowed the general public access 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 corporation's database and providing access to centralized reservation systems that provide immediate reservation information to airlines, hotels and car rental agencies. These programs also allow users to generate computerized journey reports on cost savings with details on where discounts were obtained, hotel and car usage and patterns of vacation between cities. Actual data gives corporations added leverage when negotiating discounts with journey suppliers.