Notes

Foundation Tendriling Travel Expenses
As business travel expenditures nose upward, businesses are realizing that much better cost-management techniques can make a big difference

US. corporate travel charges rocketed to more than $143 million in 1994, based on American Express' most recent survey on enterprise travel management. Private-sector employers spend approximately $2, 484 for each employee on traveling and entertainment, some sort of 17 percent boost over the earlier four years.

Corporate T&E costs, at this point the third-largest adjustable expense behind sales and data-processing fees, are under new scrutiny. Corporations usually are realizing that even a savings of one particular percent or a couple of percent can translate into huge amount of money added to their bottom line.

Savings of of which order are sure to get management's attention, which is usually a requirement for this sort of project. Involvement begins with being familiar with and evaluating the constituents of T&E management in order to be able to control and screen it better.

Hands-on management includes setting responsibility for vacation management, implementing the quality-measurement system intended for travel services utilized, and writing plus distributing a formal traveling policy. Only sixty four percent of U. S. corporations possess travel policies.


Even with senior management's support, the highway to savings will be rocky-only one in three companies has successfully instituted an internal program that can help cut travel expenses, and the variety aspects of travel usually are so overwhelming, most companies don't know how to start. "The sector of travel is usually based on data, " says Steven R. Schoen, originator and CEO with the Global Group Incorporation. "Until such period as a traveling actually sets ft . within the plane, they have already [only] been purchasing info. inch

If that's the case, information technology seems some sort of viable place to be able to hammer out those elusive, but very sought-after, savings. "Technological innovations in the particular business travel market are allowing companies to realize typically the potential of robotisation to control plus reduce indirect [travel] costs, " says Roger H. Ballou, chief executive of the Vacation Services Group US of American Show. "In addition, numerous companies are starting on quality applications that include sophisticated process improvement and even reengineering efforts developed to substantially boost T&E management processes and reduce roundabout costs. "

Since companies look to technology to create potential savings some sort of reality, they can get very creative in regards to the methods that they employ.

The Good Leveler

Centralized booking systems were lengthy the exclusive site of travel agents and other industry specialists. But all that will changed in Late 1992 when a new Department of Vehicles ruling allowed the general public accessibility to systems these kinds of as Apollo plus SABRE. Travel-management computer software, such as TripPower and TravelNet, immediately sprang up, providing corporations insight directly into where their T&E dollars are expended.

The software tracks spending trends by interfacing with typically the corporation's database plus providing access in order to centralized reservation techniques that provide instant reservation information to airlines, hotels in addition to car rental companies. These programs likewise allow users to generate computerized journey reports on cost savings with particulars on where discounts have been obtained, hotel in addition to car usage and patterns of traveling between cities. Genuine data gives organizations added leverage when negotiating discounts using travel suppliers.

"When you own the information, it's not necessary to go back to square one every time you decide in order to change agencies, very well says Mary Savovie Stephens, travel manager for biotech icon Chiron Corp.

Sybase Inc., a client/server software leader along with an annual T&E budget of more than $15 million, agrees. "Software gives us unprecedented visibility into precisely how employees are investing their travel dollars and better influence to negotiate with travel service suppliers, " says Robert Lerner, director involving credit and corporate and business travel services intended for Sybase Inc. "We have better access to data, faster, in a timely environment, which is anticipated to bring us all big savings inside T&E. Now we have handle over our travel information and no longer have to depend exclusively in the agencies and even airlines. "

The price for this freedom depends on the volume associated with business. One-time buys of travel-management software program can run from under $100 to more than $125, 000. Some software providers will support smaller users simply by selling software piecemeal for $5 in order to $12 per booked trip, still a significant savings in the $50 industry norm per transaction.

No longer Tickets

Paperless vacation is catching on faster than the particular paperless office at any time did as each service providers and consumers work together to reduce ticket prices for business travelers. Possibly the most cutting edge of the advances is "ticketless" traveling, which almost almost all major airlines will be testing.

In typically the meantime, travel suppliers and agencies usually are experimenting with new technologies to enable travelers to book travel services via the Internet, e mail and unattended ticketing kiosks. Best Western International, Hyatt Hotels and several other key hotel chains market on the Internet. These solutions slow up the need regarding paper and provide better service and such peripheral benefits as improved efficiency, improved traffic monitoring of travel expenditures and trends, and even cost reduction.

Dennis Egolf, CFO of the Veterans Extramarital affairs Medical Center throughout Louisville, Ky., noticed that the health care center's decentralized spot, a quarter-mile coming from the hospital, built efficiency difficult. "We were losing production time and issues got lost, very well he says. "Every mentecato needed to be hand-carried regarding approval, and we required seven various copies of every vacation order. " While a result, Egolf tried an off-the-shelf, paper-reduction software bundle designed for the us government.

The software permits the hospital to manage travel on-line, by tracking per-diem allowances and calculating charges to generating funds advance forms plus authorizing reimbursement discount vouchers. The software likewise lets the clinic keep a running account from the travel expenses as well as leftover travel budget.

"Today, for all useful purposes, the system is paperless, inches says Egolf. The software has helped the hospital decrease document processing time by 93 percent. "The original aim focused on managing employee travel without having paper, " he or she says. "We include achieved that goal, in part because of for the efforts involving the staff and in part as a result of accuracy of the particular software. "

Along with just a $6, 500 investment, the clinic saved $70 each and every employee trip plus saved almost half of its two-hundred dollar, 000 T&E budget through the paper-reduction program.

Out Generally there

Consolidation of company travel arrangements by simply fewer agencies is a huge growing trend since 1982. Nearly 3 out of 4 companies now make travel plans with regard to their business locations through an one agency as in contrast to 51% inside 1988. Two major benefits of firm consolidation are the particular facilitation of data processing and T&E cost management, as well as leverage in discussing future travel special discounts.

A significant technological improve that allows this loan consolidation trend to flourish will be the introduction associated with satellite ticket computer printers (STPs). Using STPs enables a journey agency to combine all operations to one home office, whilst still being send just about all necessary tickets to be able to various locations quickly via various line services. Since the name implies, the devices prints out flight tickets on-site quickly, eliminating delivery costs.

For London Mist, STPs are a blessing. London Fog's annual T&E finances greater than $15 mil is split every bit as between its a couple of locations in Eldersburg, Md., and New York City. Click here to find out more and every location purchases exactly the same number of tickets, so equal access to ticketing by their agency is important. With an STP FOREX within their two spots, the business services both offices with one particular agency in Baltimore. Each office has access to immediate seat tickets whilst still being manages in order to save by not having to pay out courier and show mail charges of which can range upward to $15 for every single of the more than 500 seat tickets each purchases annually.

Conde Nast Publications' annual T&E price range of more compared to $20 million is allocated among the locations in Los Angeles, S . fransisco, Chicago, New York and even Detroit. Since year 1994, travel arrangements experience been handled by a centralized firm, Advanced Travel Managing in New York City, by setting up an STP inside each of these kinds of five locations. Inside addition to elevated efficiency due in order to consolidation, Conde Nast has the capability to change travel plans at some sort of moment's notice in addition to have new seats in hand instantly.

The real benefit would be that the machines are usually owned and maintained by travel organization., so there is not any price to the organization. Due to the major expense engaged, however, STPs stay an option just for major ticket customers. "STPs are a new viable option in this process intended for any location that purchases more compared to $500, 000 each year in seats, " says Shoen.

As airfare takes up 43 percent associated with any company's T&E expenses, savings offered through the various uses of technological innovation have become spectacular. For example , the capacity of corporations to be able to collect and assess their own travel trends has led to the development of net-fare purchasing-negotiating a price in between a company and a great airline to order tickets it does not consist of the added costs of commissions, changes, transaction fees, company transaction fees and also other discounts.

Although most major U. S i9000. carriers publicly say that they may negotiate corporate discounts below published industry fares, the American Express survey in business travel managing found that 38 percent of Oughout. S. companies experienced usage of, or already had implemented, negotiated airline discounts. The particular availability and aspects of these arrangements vary widely by simply carrier.

What's the purchase price?

Fred Swaffer, transportation manager for Hewlett-Packard and a robust advocate of the particular net-pricing system, offers pioneered the idea of fee-based pricing with travel-management companies under deal with H-P. He states that H-P, which spends even more than $528 million per year on T&E, plans in order to have all atmosphere travel based about net-fare pricing. "At this current time, many of us have several internet fares at various stages of arrangement, " he admits that. "These fares are agreed with the air carriers at the company level, then drip down to each associated with our seven geographical regions. "

Open Kent, Western local manager for Unified Airlines, concurs: "United Airlines participates inside corporate volume discounting, such as mass ticket purchases, but not with net pricing. I possess but to see one net-fare agreement that produces sense to us all. We're not against it, but all of us just don't know it right at this point. "

Kent tensions, "Airlines should method corporations with long-term strategic relationships quite than just discount rates. You want to observe ourselves dedicated to some sort of corporation rather than just involved. inches

As business traveling expenses nose up, companies are seeing that better cost-management methods can make the difference.

US. corporate travel expenses rocketed to over $143 billion in year 1994, according to United states Express' most recent survey on company travel management. Private-sector employers spend a good estimated $2, 484 per employee on travel and enjoyment, a 17 % increase within the last 4 years.

Corporate T&E costs, now the third-largest controllable charge behind sales in addition to data-processing costs, will be under new overview. Corporations are knowing that even the savings of one percent or a couple of percent can change into millions of dollars included in their bottom line.

Cost savings of that order are sure to get management's attention, which is usually a requirement for this kind of project. Participation begins with understanding and evaluating typically the components of T&E management to be able to handle and monitor it more effectively.

Hands-on management includes assigning responsibility for travel management, implementing some sort of quality-measurement system with regard to travel services used, and writing and even distributing a conventional travel policy. Only 64 percent of U. S. companies have travel procedures.

In spite of senior management's support, the street to savings is definitely rocky-only one out of three companies has efficiently instituted an internal software that will help cut travel expenses, as well as the myriad factors of travel usually are so overwhelming, most companies don't know wherever to start. "The industry of journey is based about information, " states Steven R. Schoen, founder and BOSS of The Global Group Inc. "Until such time like a passenger actually sets foot on the particular plane, they've [only] been purchasing information. inches

In that case, information technologies seems an affordable spot to hammer out and about those elusive, yet highly sought-after, personal savings. "Technological innovations available travel industry are allowing firms to realize the potential associated with automation to control and even reduce indirect [travel] costs, " says Roger H. Ballou, us president of the Journey Services Group UNITED STATES of American Express. "In addition, many organizations are getting into high quality programs including advanced process improvement plus reengineering efforts intended to substantially increase T&E management techniques and reduce roundabout costs. "

While companies look to be able to technology to create possible savings a reality, they will can get extremely creative about the methods they make use of.

The Great Leveler

Central reservation systems have been long the exclusive domain of vacation agents and also other industry professionals. But just about all that changed in November 1992 if a Department of Transportation ruling allowed the public access to methods such as Apollo and SABRE. Travel-management software, such as TripPower in addition to TravelNet, immediately sprang up, providing companies regarding where their own T&E dollars are usually being spent.

The software tracks investing trends by interfacing with the businesses database and supplying use of centralized booking systems that supply immediate reservation information to airlines, hotels and car rental firms. These programs likewise allow users in order to generate computerized vacation reports on financial savings with details on where discounts had been obtained, hotel and even car usage plus patterns of traveling between cities. Genuine data gives corporations added leverage when negotiating discounts along with travel suppliers.

"When you possess the information, you don't have to get back to pillow one every time you determine to change agencies, " says Mary Savovie Stephens, vacation manager for biotech giant Chiron Corp.

Sybase Inc., a new client/server software innovator with an yearly T&E budget regarding more than $15 million, agrees. "Software gives us unprecedented visibility into how employees are wasting their travel money and better power to negotiate together with travel service providers, " says Robert Lerner, director involving credit and company travel services intended for Sybase Inc. "We have better entry to data, faster, in a current environment, which is definitely expected to bring us big savings within T&E. Now all of us have control of our own travel information plus no longer must depend exclusively around the agencies and air carriers. "

The cost with this privilege depends on the volume of business. One-time buys of travel-management software can run through under $100 in order to more than $125, 000. Some application providers will cater to smaller users by simply selling software piecemeal for $5 in order to $12 per reserved trip, still a significant savings from the $50 industry convention per transaction.

Zero More Seats

Paperless travel is catching on faster than the paperless office at any time did as equally service providers and even consumers work collectively to reduce plane ticket prices for company travelers. Perhaps typically the most cutting-edge regarding the advances is "ticketless" travel, which often almost all main airlines are testing.

At the same time, travel providers and agencies usually are tinkering with new systems make it possible for travelers to book travel providers on the net, e-mail in addition to unattended ticketing kiosks. Best Western World, Hyatt Hotels and several other major hotel chains promote on the Internet. These services decrease the dependence on papers and offer far better service and such peripheral benefits while increased efficiency, increased tracking of vacation expenses and tendencies, and cost reduction.

Dennis Egolf, CFO from the Veterans Matters The hospital in Louisville, Ky., realized of which the medical center's decentralized location, some sort of quarter-mile from the hospital, made efficiency difficult. "We were burning off production some things got lost, inch he says. "Every memo had to be hand-carried regarding approval, and that we needed seven different reports of each traveling order. " Because of this, Egolf tried an off-the-shelf, paper-reduction software program designed for the federal government.

The software allows the medical center to handle travel online, from tracking per-diem allowances and calculating expenses to generating advance loan forms and authorizing reimbursement discount vouchers. The software also let us the hospital keep the running account involving its travel costs and its staying travel budget.

"Today, for all sensible purposes, the program is paperless, inch says Egolf. The particular software has helped the hospital lessen document processing time by 93 per cent. "The original aim focused on managing employee travel without paper, " he says. "We have achieved that goal, throughout part due in order to the efforts regarding the staff and part due to be able to the accuracy associated with the software. inch

With only some sort of $6, 000 purchase, a healthcare facility saved seventy dollars each employee trip and saved nearly 1 / 2 of its $200, 000 T&E price range with the paper-reduction software.

Out There

Consolidation regarding corporate travel arrangements by fewer firms has been the growing trend since 1982. Nearly three away from four firms now make journey plans for their own business locations by means of a single organization as opposed to 51 percent in 1988. Two major great things about agency consolidation would be the facilitation of accounting and T&E cost management, as well like leverage in fighting future travel special discounts.

A major scientific advance that permits this consolidation tendency to flourish is usually the introduction involving satellite ticket machines (STPs). Using STPs enables a traveling agency to merge all operations to just one home office, in addition to still send most necessary tickets in order to various locations quickly via various line services. As the term implies, the particular machinery prints out flight tickets on-site right away, eliminating delivery charges.

For London Haze, STPs are the blessing. London Fog's annual T&E spending budget of more as compared to $15 million is definitely split equally between its two areas in Eldersburg, Md., and New You are able to City. Each area purchases the exact same quantity of tickets, therefore equal access to be able to ticketing using their organization is a must. By having an STP found in their two spots, the company services both offices using one agency inside Baltimore. Each office has access in order to immediate tickets in addition to still manages to be able to save by devoid of to pay courier and express mailbox charges that can range as much as $15 for each of the more than five-hundred tickets each purchases annually.

Conde Nast Publications' annual T&E budget of more than $20 thousand is allocated among its locations inside Los Angeles, San Francisco, Chicago, New York and Detroit. Since 1994, travel arrangements have been taken care of by way of a centralized firm, Advanced Travel Supervision in New York City, by installing an STP in each of these types of five locations. In addition to increased efficiency due in order to consolidation, Conde Nast now has the ability to change travel ideas at a moment's notice and possess new tickets within hand instantly.

The real benefit is of which the machines are owned and managed by the travel company., so there is no cost to be able to the company. Because of the major expense engaged, however, STPs stay an option simply for major ticket purchasers. "STPs are usually a viable option in this practice for any location that purchases more as compared to $500, 000 for each year in tickets, " says Shoen.

As airfare takes up 43 percent of any company's T&E expenses, savings readily available through the numerous uses of technologies have become dramatic. With regard to example, the power of corporations to gather in addition to analyze their unique traveling trends has resulted in the creation of net-fare purchasing-negotiating a cost among a corporation plus an airline to buy tickets that does not add the added expenses of commissions, overrides, transaction fees, agency transaction costs and other savings.

Although most main U. S. providers publicly proclaim they don't negotiate business discounts below released market fares, the American Express review on business journey management found that 38 percent associated with U. S. companies had access to, or already got implemented, negotiated airline discounts. The availableness and mechanics involving these arrangements differ widely by carrier.

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