Notes

Basic Tendriling Travel Expenses
As business travel charges nose upward, businesses are realizing that far better cost-management techniques may make a big difference

US ALL. corporate travel expenditures rocketed to even more than $143 billion dollars in 1994, based on American Express' most recent survey on business travel management. Private-sector employers spend an estimated $2, 484 each employee on journey and entertainment, a 17 percent raise over the past four years.

Corporate and business T&E costs, right now the third-largest adjustable expense behind revenue and data-processing charges, are under brand new scrutiny. Corporations will be realizing that a savings of 1 percent or two percent can convert into vast amounts added to their bottom line.

Savings of of which order are positive to get management's attention, which is definitely a requirement for this sort of project. Involvement begins with knowing and evaluating the constituents of T&E supervision in order to be able to control and keep an eye on it better.

Hands-on management includes assigning responsibility for vacation management, implementing the quality-measurement system for travel services applied, and writing plus distributing an official journey policy. Only sixty four percent of Circumstance. S. corporations have travel policies.

Even with senior management's support, the street to savings is usually rocky-only one throughout three companies has successfully instituted an internal program that will aid cut travel costs, and the numerous aspects of travel are usually so overwhelming, most companies don't understand how to start. "The sector of travel will be based on details, " says Steven R. Schoen, creator and CEO in the Global Group Inc. "Until such moment as a passenger actually sets feet within the plane, they have already [only] been purchasing info. inch

If that's the case, information technology seems a new viable place to hammer out those elusive, but very sought-after, savings. "Technological innovations in the particular business travel market are allowing companies to realize the potential of automation to control and reduce indirect [travel] fees, " says Roger H. Ballou, leader of the Traveling Services Group US of American Show. "In addition, numerous companies are embarking on quality applications that include complicated process improvement in addition to reengineering efforts designed to substantially increase T&E management procedures and reduce roundabout costs. "

Because companies look to technology to create potential savings a reality, they can get very imaginative concerning the methods that they employ.

The Perfect Leveler

Centralized reservation systems were long the exclusive site of travel companies in addition to other industry professionals. But all that changed in The fall of 1992 when the Department of Vehicles ruling allowed the general public accessibility to systems such as Apollo and even SABRE. Travel-management software program, such as TripPower and TravelNet, instantly sprang up, providing corporations insight in to where their T&E dollars are now being spent.

The software tracks spending trends by interfacing with the particular corporation's database plus providing access to be able to centralized reservation methods that provide quick reservation information in order to airlines, hotels in addition to car rental companies. These programs likewise allow users in order to generate computerized vacation reports on price savings with details on where discounts were obtained, hotel and car usage plus patterns of travel between cities. Real data gives companies added leverage when negotiating discounts with travel suppliers.

"When you own the particular information, an individual head out back to rectangular one every time you decide in order to change agencies, inch says Mary Savovie Stephens, travel manager for biotech monster Chiron Corp.

Sybase Inc., a client/server software leader together with an annual T&E budget greater than $15 million, agrees. "Software gives us unmatched visibility into exactly how employees are shelling out their travel dollars and better leverage to negotiate using travel service vendors, " says Robert Lerner, director regarding credit and company travel services for Sybase Inc. "We have better gain access to to data, more quickly, in a current environment, which will be anticipated to bring us all big savings inside of T&E. We now have manage over our travel information and zero longer have to be able to depend exclusively about the agencies and airlines. "

The charge for this freedom depends on the volume associated with business. One-time purchases of travel-management computer software can run from under $100 in order to more than $125, 000. Some software providers will allow for smaller users by selling software piecemeal for $5 to $12 per arranged trip, still some sort of significant savings from your $50 industry norm per transaction.

Forget about Tickets

Paperless journey is catching on faster than the paperless office ever before did as both service providers plus consumers work with each other to lessen ticket costs for business travelers. Possibly the most cutting edge of the advances is "ticketless" journey, which almost almost all major airlines are testing.

In typically the meantime, travel companies and agencies are usually experimenting with brand new technologies to allow travelers to book travel services through the Internet, e mail and unattended ticketing kiosks. Best Traditional western International, Hyatt Hotels and several other key hotel chains marketplace on the web. These providers lower the need regarding paper and offer far better service and so on peripheral benefits as enhanced efficiency, improved keeping track of of travel costs and trends, plus cost reduction.

Dennis Egolf, CFO of the Veterans Extramarital relationships Medical Center inside Louisville, Ky., recognized that the health care center's decentralized location, a quarter-mile coming from the hospital, made efficiency difficult. "We were losing generation time and items got lost, very well he says. "Every memo had to be hand-carried intended for approval, and many of us required seven various copies of every travel order. " While a result, Egolf tried an off-the-shelf, paper-reduction software deal designed for the us government.

The software permits a healthcare facility to manage travel on-line, through tracking per-diem allowances and calculating charges to generating funds advance forms and even authorizing reimbursement vouchers. The software also lets the medical center keep an operating account of its travel expenses as well as leftover travel budget.

"Today, for all functional purposes, the system is paperless, " says Egolf. The particular software has aided the hospital reduce document processing time by 93 percent. "The original objective focused on controlling employee travel without paper, " they says. "We possess achieved that target, in part credited for the efforts involving the staff in addition to in part as a result of accuracy of the particular software. "

With merely a $6, 1000 investment, the hospital saved $70 every employee trip plus saved almost half of its one hundred dollar, 000 T&E budget through the paper-reduction program.

Out Right now there

Consolidation of business travel arrangements by simply fewer agencies is a growing trend due to the fact 1982. Nearly three out of a number of companies now create travel plans regarding their business places through an one agency as in contrast to 51% inside 1988. Two major benefits of agency consolidation are the particular facilitation of data processing and T&E budgeting, as well because leverage in negotiating future travel special discounts.

A significant technological advance that enables this consolidation trend to flourish is the introduction of satellite ticket printers (STPs). Using STPs enables a vacation agency to consolidate all operations to one home workplace, and still send just about all necessary tickets in order to various locations instantly via various wire services. Since the name implies, the machines prints out flight tickets on-site quickly, eliminating delivery costs.

For London Fog, STPs are the blessing. London Fog's annual T&E spending budget greater than $15 , 000, 000 is split equally between its two locations in Eldersburg, Md., and Innovative York City. Each and every location purchases a similar number of seats, so equal entry to ticketing coming from their agency is essential. With an STP within their two locations, the organization services the two offices with one agency in Baltimore. Each office provides access to immediate tickets but still manages in order to save by not necessarily having to pay courier and convey mail charges that will can range up to $15 for each and every of the a lot more than 500 tickets each purchases annually.

Conde Nast Publications' annual T&E finances of more as compared to $20 million is definitely allocated among it is locations in Mis Angeles, Bay area, Chicago , il, New York plus Detroit. Since year 1994, travel arrangements have been handled by a centralized firm, Advanced Travel Supervision in New You are able to City, by installing an STP found in each of these kinds of five locations. In addition to enhanced efficiency due to be able to consolidation, Conde Nast now has the capability to change vacation plans at some sort of moment's notice and have new entry pass in hand instantly.

The real gain is that the machines are usually owned and managed by the travel organization., so there is no expense to the business. Due to the particular major expense included, however, STPs stay an option just for major ticket consumers. "STPs are some sort of viable option throughout this process with regard to any location of which purchases more as compared to $500, 000 for each year in entry pass, " says Shoen.

As airfare uses 43 percent involving any company's T&E expenses, savings obtainable through the different uses of technological innovation have become dramatic. For example , the potential of corporations in order to collect and evaluate their own travel trends has directed to the creation of net-fare purchasing-negotiating a price involving a company and the airline to buy tickets it does not consist of the added costs of commissions, changes, transaction fees, firm transaction fees and also other discounts.

Although most major U. S i9000. carriers publicly proclaim that they no longer negotiate corporate discount rates below published market fares, the Us Express survey in business travel managing found that 32 percent of U. S. companies experienced usage of, or currently had implemented, agreed airline discounts. The availability and technicians of these agreements vary widely by carrier.

What's the retail price?

Fred Swaffer, vehicles manager for Hewlett-Packard and a sturdy advocate of the net-pricing system, has pioneered the idea of fee-based pricing with travel-management companies under contract with H-P. He or she states that H-P, which spends a lot more than $528 mil per year in T&E, plans to have all air flow travel based upon net-fare pricing. "At this current time, we all have several internet fares at various stages of agreement, " he admits that. "These fares are negotiated with the flight companies at the business level, then drip down to each regarding our seven geographical regions. "

Outspoken Kent, Western local manager for United Airlines, concurs: "United Airlines participates in corporate volume discounting, such as volume ticket purchases, but not with net pricing. I have but to see 1 net-fare agreement which makes sense to people. We're not against it, but many of us just don't understand it right today. "

Kent challenges, "Airlines should method corporations with long term strategic relationships quite than just discounts. We would like to observe ourselves focused on a new corporation rather than just involved. very well

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

US. corporate travel expenses rocketed to a lot more than $143 billion in 1994, according to American Express' most latest survey on company travel management. Private-sector employers spend a great estimated $2, 484 per employee in travel and entertainment, a 17 per cent increase within the last 4 years.

Corporate T&E costs, now the third-largest controllable charge behind sales in addition to data-processing costs, are usually under new overview. Corporations are noticing that even the savings of a single percent or 2 percent can change into millions involving dollars included in their very own bottom line.

Cost savings of that buy will definitely get management's attention, which is a requirement for this type of project. Involvement begins with being familiar with and evaluating the components of T&E management as a way to control and monitor that more effectively.

Hands-on management includes assigning responsibility for journey management, implementing a new quality-measurement system with regard to travel services used, and writing and even distributing an elegant travel policy. Only 64 percent regarding U. S. corporations have travel plans.

Despite having senior management's support, the road to savings will be rocky-only one out of a few companies has effectively instituted an indoor plan that will assist cut travel costs, along with the myriad elements of travel are so overwhelming, most companies don't know where to start. "The industry of vacation is based on information, " claims Steven R. Schoen, founder and TOP DOG of The International Group Inc. "Until such time as being a passenger actually sets foot on the particular plane, they've [only] recently been purchasing information. inches

If that's the case, information technology seems a viable place to hammer out those elusive, although highly sought-after, savings. "Technological innovations available travel industry will be allowing firms to comprehend the potential regarding automation to manage and reduce indirect [travel] fees, " says Roger H. Ballou, leader of the Traveling Services Group UNITED STATES OF AMERICA of American Express. "In addition, many firms are trying to achieve good quality programs which include advanced process improvement plus reengineering efforts intended to substantially increase T&E management operations and reduce indirect costs. "

Because companies look in order to technology to make possible savings a real possibility, these people can get quite creative about the methods they use.

The truly amazing Leveler

Central reservation systems had been long the unique domain of travel agents and other sector professionals. But almost all that changed inside November 1992 each time a Department of Transportation ruling allowed the public access to devices for instance Apollo plus SABRE. Travel-management computer software, for instance TripPower plus TravelNet, immediately jumped up, providing corporations insight into where their own T&E dollars will be being spent.

The software tracks wasting trends by interfacing with the corporation's database and delivering access to centralized reservation systems that give immediate reservation data to airlines, hotels and car rental agencies. These programs in addition allow users to be able to generate computerized journey reports on cost savings with details upon where discounts had been obtained, hotel plus car usage plus patterns of journey between cities. Genuine data gives companies added leverage any time negotiating discounts with travel suppliers.

"When you own the data, you don't have to resume block one when you decide to change agencies, " says Jane Savovie Stephens, journey manager for biotech giant Chiron Corp.

Sybase Inc., the client/server software chief with an annual T&E budget associated with more than $15 million, agrees. "Software gives us unrivaled visibility into how employees are investing their travel bucks and better influence to negotiate using travel service vendors, " says Robert Lerner, director involving credit and business travel services for Sybase Inc. "We have better entry to data, quicker, in a current environment, which is usually expected to bring us big savings throughout T&E. Now we have control of the travel information and no longer must depend exclusively on the agencies and airline carriers. "

The expense just for this privilege will depend on on the volume of business. One-time purchases of travel-management software program can run through under $100 in order to more than $125, 000. Some software program providers will cater to smaller users by selling software piecemeal for $5 in order to $12 per ordered trip, still a significant savings from the $50 industry norm per transaction.

No More Seats

Paperless travel is finding on faster compared to the paperless office ever before did as each service providers in addition to consumers work collectively to reduce ticket prices for organization travelers. Perhaps the particular most cutting-edge regarding the advances is definitely "ticketless" travel, which often almost all major airlines are examining.

At the same time, travel suppliers and agencies will be trying out new technology to enable travelers to be able to book travel companies on the net, e-mail and even unattended ticketing kiosks. Best Western World, Hyatt Hotels and several other significant hotel chains promote on the Internet. These services reduce the dependence on paper and offer much better service and this kind of peripheral benefits like increased efficiency, improved tracking of traveling expenses and developments, and cost reduction.

Dennis Egolf, CFO in the Veterans Affairs The hospital in Louisville, Ky., realized that will the medical center's decentralized location, a new quarter-mile from the hospital, made efficiency tough. "We were dropping production some things got lost, very well he says. "Every memo had to be able to be hand-carried for approval, and we necessary seven different reports of each journey order. " Therefore, Egolf tried an off-the-shelf, paper-reduction software package designed for the particular federal government.

The software program allows the hospital to handle travel online, from tracking per-diem allowances and figuring out expenses to producing money advance forms and authorizing reimbursement vouchers. The program also allows the hospital keep a new running account of its travel expenses and its staying travel budget.

"Today, for all sensible purposes, the method is paperless, " says Egolf. The particular software has aided the hospital decrease document processing moment by 93 per cent. "The original goal aimed at managing employee travel without document, " he states. " website have reached that goal, in part due to be able to the efforts involving the staff and in part due to the accuracy associated with the software. inches

With only some sort of $6, 000 expense, a healthcare facility saved $70 each employee journey and saved almost 50 % of its two-hundred dollar, 000 T&E budget through the paper-reduction plan.

On the market

Consolidation associated with corporate travel agreements by fewer agencies has been a new growing trend considering that 1982. Nearly 3 from four businesses now make vacation plans for their very own business locations by means of a single company as opposed to 51 percent in 1988. Two major advantages of agency consolidation are definitely the facilitation of data processing and T&E spending budget, as well as leverage in negotiating future travel discount rates.

A major scientific advance that enables this consolidation tendency to flourish is definitely the introduction involving satellite ticket machines (STPs). Using STPs enables a journey agency to consolidate all operations to 1 home office, plus still send just about all necessary tickets to various locations immediately via various line services. As typically the term implies, the machinery prints out and about airline tickets on-site quickly, eliminating delivery fees.

For London Mist, STPs are a blessing. London Fog's annual T&E price range of more than $15 million is definitely split equally between its two places in Eldersburg, Md., and New York City. Each place purchases the identical variety of tickets, and so equal access to ticketing off their organization is a need to. With an STP in their two locations, the company services both offices along with one agency inside Baltimore. Each office has access to be able to immediate tickets in addition to still manages to save by lacking to pay courier and express mail charges that may range up to $15 for each from the more than 500 tickets each expenses annually.

Conde Nast Publications' annual T&E budget of a lot more than $20 million is allocated between its locations in Los Angeles, San Francisco, Chicago, Brand new York and Detroit. Since 1994, travel arrangements have been managed by the centralized company, Advanced Travel Administration in New York City, by setting up an STP in each of these five locations. In addition to enhanced efficiency due to consolidation, Conde Nast now has the ability to change travel ideas at a moment's notice and include new tickets within hand instantly.

The real benefit is that the machines are owned and preserved by the travel agency., so there will be no cost to be able to the company. Because of the major expense involved, however, STPs stay an option simply for major ticket purchasers. "STPs are a viable alternative in this process for just about any location of which purchases more compared to $500, 000 for every year in tickets, " says Shoen.

As airfare averages 43 percent involving any company's T&E expenses, savings obtainable through the various uses of technology are getting to be dramatic. Regarding example, the ability involving corporations to collect and even analyze their very own vacation trends has led to the particular creation of net-fare purchasing-negotiating an amount in between a corporation in addition to an airline to buy tickets that will not range from the added expenses of profits, overrides, transaction fees, agency transaction costs and other discount rates.

Although Lemax Software . S. carriers publicly proclaim that they can don't negotiate company discounts below printed market fares, the American Express review on business journey management found of which 38 percent regarding U. S. companies had access to be able to, or already acquired implemented, negotiated air travel discounts. The availability and mechanics regarding these arrangements change widely by company.

What's the Cost?

Fred Swaffer, transportation manager for Hewlett-Packard along with a strong ally with the net-pricing system, has pioneered the particular concept of fee-based pricing with travel-management companies under agreement with H-P. He states that H-P, which spends more than $528 million per year on T&E, blueprints to have all air travel based about net-fare pricing. "At the present period, we have various net fares from various stages associated with agreement, " they says. "These deals are negotiated together with the airlines at the corporate level, then trickle down to all of our seven physical regions. "

Frank Kent, Western local manager for Usa Airlines, concurs: "United Airlines participates in corporate volume discounting, such as bulk ticket purchases, but not really with net prices. I have yet to see one net-fare agreement that will makes sense in order to us. We're certainly not opposed to that, but we only don't understand that right this moment. "
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