Since business travel expenses nostril upward, companies are recognizing that better cost-management techniques can make a big difference seville travel guide
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 earlier four years.
Corporate T&E costs, now the third-largest controllable expense behind sales and data-processing costs, are under new scrutiny. Organizations are realizing that even a savings of just one percent or 2 percent can translate into millions of dollars included with their bottom line.
Cost savings of the order are sure to get management’s attention, which is a necessity for this kind 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 plan. Only 64 percent of U. S. corporations have travel policies.
Despite mature management’s support, the trail 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, typically 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 voyager 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 organizations 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 which include complex process improvement and reengineering work 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 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 organizations. These programs also allow users to generate advanced 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 whenever you may 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 timely environment, which is expected to bring us big savings in T&E. At this point we have control of our travel information with out longer have to count exclusively on the organizations and airlines. ”
The fee for this privilege will depend on the amount of business. One time purchases of travel-management software can run from under $100 to more than $125, 000. Some software providers will accommodate smaller users selling off software piecemeal for $5 to $12 per booked trip, still a significant personal savings from the $50 industry norm per transaction.