Base Tendriling Travel Expenses

As small business journey charges nose upward, corporations are recognizing that superior cost-management strategies might make a variation

US. company our site  travel expenditures rocketed to much more than $143 billion in 1994, in accordance to American Express' newest survey on organization vacation management. Private-sector employers shell out an estimated $2,484 for each personnel on journey and entertainment, a seventeen per cent increase 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 noticing that even a savings of 1 % or two % 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 management includes assigning responsibility for vacation administration, implementing a quality-measurement system for vacation services used, and writing and distributing a formal journey 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 businesses has successfully instituted an internal program that will help cut travel expenditures, and the myriad aspects of journey are so overwhelming, most corporations 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 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 enterprise journey 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 firms 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.

The Great Leveler

Centralized reservation systems were long the exclusive domain of journey 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 travel reports on expense 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.