Foundation Tendriling Travel Expenses

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As business journey bills nose upward, firms are knowing that much better cost-management techniques will make a big difference

US. company journey fees rocketed to extra than $143 billion in 1994, in accordance to American Express' newest survey on enterprise journey administration. Private-sector companies spend an believed $2,484 for each personnel on journey and leisure, a 17 percent increase in the last four years.

Company T&E costs, now the third-largest controllable expense behind sales and data-processing costs, are under new scrutiny. Corporations are noticing that even a savings of 1 p.c or 2 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 administration in order to control and monitor it additional effectively.

Hands-on management includes assigning responsibility for vacation management, implementing a quality-measurement system for travel services used, and writing and distributing a formal journey 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 vacation expenses, and the myriad aspects of journey are so overwhelming, most companies 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 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 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 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 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.