Foundation Tendriling Travel Expenses

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As organization vacation expenses nose upward, providers are noticing that much better cost-management procedures will make a variance

US. company vacation costs rocketed to far more recommended site $143 billion in 1994, in accordance to American Express' newest survey on business travel management. Private-sector employers shell out an estimated $2,484 for every employee on travel and entertainment, a seventeen per cent enhance in the last 4 yrs.

Company 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 % or two p.c 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 extra effectively.

Hands-on administration includes assigning responsibility for journey management, implementing a quality-measurement system for travel services used, and writing and distributing a formal vacation policy. Only 64 p.c of U.S. corporations have journey policies.

Even with senior management's support, the road to savings is rocky-only one in three firms has successfully instituted an internal program that will help cut journey expenses, and the myriad aspects of travel are so overwhelming, most corporations don't know where to start. "The industry of journey 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 small 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 Travel Services Group USA of American Express. "In addition, many providers are embarking on quality programs that include sophisticated process improvement and reengineering efforts designed to substantially improve T&E management processes and reduce indirect costs."

As corporations look to technology to make potential savings a reality, they can get very creative about the methods they employ.