As business travel bills nose upwards, companies are recognizing that better cost-management techniques can change lives
US. corporate and business travel expenditures rocketed to more than $143 billion in 1994, regarding to American Exhibit’ latest study on business travel management. Private-sector companies spend around $2,484 per worker on travel and entertainment, a 17 percent increase within the last four years.
Corporate and business T&E costs, now the third-largest controllable price behind sales and data-processing costs, are under new scrutiny. Firms are recognizing that a good savings of just one 1 percent or 2 percent can result in huge amount of money put into their important thing.
Savings of this order will definitely get management’s attention, which really is a requirement for this kind of project. Engagement commences with understanding and assessing the the different parts of T&E management to be able to regulate and keep an eye on it better.
Hands-on management includes assigning responsibility for travel management, utilizing a quality-measurement system for travel services used, and writing and distributing a formal travel insurance policy. Only 64 percent of U.S. businesses have travel guidelines.
Even with older management’s support, the street to cost savings is rocky-only one in three companies has efficiently instituted an interior program that will assist cut travel expenditures, and the myriad areas of travel are so frustrating, most companies have no idea the place to start. “The industry of travel is dependant on information,” says Steven R. Schoen, creator and CEO with the Global Group Inc. “Until such time as a traveler actually sets feet on the plane, they’ve [only] been purchasing information.”
If that’s so, it seems a feasible location to hammer out those elusive, but highly sought-after, personal savings. “Technologies available travel industry are allowing businesses to understand the probable of automation to regulate and reduce indirect [travel] costs,” says Roger H. Ballou, chief executive of the Travel Services Group USA of North american Express. “Furthermore, many companies are getting into quality programs including complex process improvement and reengineering attempts designed to greatly improve T&E management functions and reduce indirect costs.”
As companies turn to technology to make potential cost savings possible, they can get very creative about the techniques they employ.
THE FANTASTIC Leveler
Centralized booking systems were long the exclusive site of travel companies and other industry specialists. But everything that modified in November 1992 whenever a Department of Travel ruling allowed everyone usage of systems such as Apollo and SABRE. Travel-management software, such as TripPower and TravelNet, immediately sprang up, providing companies perception into where their T&E us dollars are being put in.
The software monitors spending movements by interfacing with the corporation’s repository and providing usage of centralized booking systems offering immediate booking information to airlines, hotels and car rentals organizations. These programs also allow users to create computerized travel information on cost benefits with information on where special discounts were obtained, hotel and car use and habits of travel between places. Actual data offers companies added leverage when negotiating special discounts with travel suppliers.
“When you possess the information, you don’t need to get back to square one each and every time you choose to change firms,” says Mary Savovie Stephens, travel administrator for biotech large Chiron Corp.
Sybase Inc., a customer/server software innovator with an twelve-monthly T&E budget greater than $15 million, agrees. “Software offers us unprecedented awareness into how employees are spending their travel us dollars and better leverage to make a deal with travel service suppliers,” says Robert Lerner, director of credit and commercial travel services for Sybase Inc. “We’ve better usage of data, faster, in a real-time environment, which is likely to bring us big cost savings in T&E. We now have control over our travel information no much longer have to be dependent solely on the organizations and airlines.”
The cost because of this privilege is determined by the quantity of business. One-time buys of travel-management software can run from under $100 to more than $125,000. Some software providers will provide smaller users by advertising software piecemeal for $5 to $12 per booked trip, still a substantial personal savings from the $50 industry norm per purchase.
FORGET ABOUT Tickets
Paperless travel is getting on faster than the paperless office ever before have as both companies and consumers interact to reduce solution charges for business travelers. Possibly the most cutting-edge of the developments is “ticketless” travel, which virtually all major airlines are examining.
For the time being, travel providers and businesses are tinkering with new systems to permit travelers to reserve travel services via the web, e-mail and unattended ticketing kiosks. Best Traditional western International, Hyatt Hotels and many other major hotel stores market on the web. These services decrease the need for newspaper and provide better service and such peripheral benefits as increased efficiency, better monitoring of travel bills and styles, and cost decrease.
Dennis Egolf, CFO of the Veterans Affairs INFIRMARY in Louisville, Ky., recognized that the medical center’s decentralized location, a quarter-mile from a healthcare facility, made efficiency difficult. “We were burning off development time and things acquired lost,” he says. “Every memo needed to be hand-carried for agreement, and we required seven different copies of every travel order.” Because of this, Egolf attempted an off-the-shelf, paper-reduction program created for the government.
The program allows a healthcare facility to control travel on-line, from traffic monitoring per-diem allowances and calculating expenditures to producing advance loan varieties and authorizing reimbursement vouchers. The program also lets a healthcare facility keep a working consideration of its travel expenditures and its left over travel budget.
“Today, for any practical purposes, the machine is paperless,” says Egolf. The program has helped a healthcare facility reduce document control time by 93 percent. “The initial goal centered on managing staff travel without newspaper,” he says. “We’ve achieved that goal, partly because of the attempts of the personnel and partly because of the accuracy of the program.”
With only a $6,000 investment, a healthcare facility kept $70 each worker trip and preserved almost 50 % of its $200,000 T&E budget through the paper-reduction program.