Notes

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

US. corporate travel expenses rocketed to more than $143 billion dollars in 1994, based on American Express' latest survey on enterprise travel management. Private-sector employers spend nearly $2, 484 each employee on traveling and entertainment, the 17 percent boost over the earlier four years.

Company T&E costs, right now the third-largest manageable expense behind revenue and data-processing fees, are under brand new scrutiny. Corporations are usually realizing that even a savings of one percent or 2 percent can change into huge amount of money included to their final conclusion.

Savings of of which order are confident to get management's attention, which is definitely a requirement for this variety of project. Engagement begins with being familiar with and evaluating the constituents of T&E managing in order in order to control and screen it better.

Hands-on management includes setting responsibility for journey management, implementing some sort of quality-measurement system with regard to travel services applied, and writing and distributing a formal vacation policy. Only 64 percent of Circumstance. S. corporations have travel policies.

In fact with senior management's support, the highway to savings is definitely rocky-only one inside three companies provides successfully instituted a good internal program that will aid cut travel expenditures, and the numerous areas of travel usually are so overwhelming, the majority of companies don't know where to begin. "The business of travel is usually based on info, " says Steven R. Schoen, owner and CEO from the Global Group Inc. "Until such period as a passenger actually sets ft . around the plane, they are yet to [only] been purchasing info. inch

If that's the case, data technology seems some sort of viable place in order to hammer out individuals elusive, but very sought-after, savings. "Technological innovations in typically the business travel market are allowing organizations to realize typically the potential of motorisation to control and reduce indirect [travel] fees, " says Roger H. Ballou, president of the Journey Services Group UNITED STATES of American Exhibit. "In addition, numerous companies are travelling on quality programs that include sophisticated process improvement in addition to reengineering efforts made to substantially improve T&E management procedures and reduce indirect costs. "

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

The Great Leveler

Centralized reservation systems were extended the exclusive website of travel agents plus other industry experts. But all that will changed in Nov 1992 when some sort of Department of Vehicles ruling allowed the particular general public gain access to to systems such as Apollo and even SABRE. Travel-management software program, such as TripPower and TravelNet, immediately sprang up, supplying corporations insight straight into where their T&E dollars are increasingly being spent.

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

"When you own typically the information, it's not necessary to move back to sq one every moment you decide to be able to change agencies, inches says Mary Savovie Stephens, travel office manager for biotech monster Chiron Corp.

Sybase Inc., a client/server software leader using an annual T&E budget greater than $15 million, agrees. "Software gives us unparalleled visibility into exactly how employees are spending their travel money and better leveraging to negotiate together with travel service providers, " says Robert Lerner, director involving credit and business travel services intended for Sybase Inc. "We have better access to data, quicker, in a timely environment, which is supposed to bring us big savings inside T&E. We now have manage over our journey information and simply no longer have to depend exclusively upon the agencies and airlines. "

The fee for this privilege depends upon what volume regarding business. One-time buys of travel-management software can run by under $100 to be able to more than $125, 000. Some application providers will accommodate smaller users simply by selling software piecemeal for $5 to be able to $12 per reserved trip, still a significant savings through the $50 industry norm per transaction.

You can forget Tickets

Paperless journey is catching on faster than typically the paperless office ever before did as equally service providers and even consumers work collectively to lower ticket prices for people who do buiness travelers. Maybe the most advanced of the technological innovations is "ticketless" vacation, which almost most major airlines are testing.

In the meantime, travel providers and agencies will be experimenting with new technologies to allow travelers to book travel services through the Internet, e-mail and unattended ticketing kiosks. Best European International, Hyatt Accommodations and several other main hotel chains market on the web. These providers lower the need regarding paper and gives far better service and so on peripheral benefits as improved efficiency, improved traffic monitoring of travel charges and trends, and even cost reduction.

Dennis Egolf, CFO involving the Veterans Extramarital affairs Medical Center within Louisville, Ky., understood that the healthcare center's decentralized area, a quarter-mile from the hospital, built efficiency difficult. "We were losing production time and points got lost, very well he says. "Every tonto had to be hand-carried intended for approval, and all of us required seven distinct copies of each and every traveling order. " While a result, Egolf tried an off-the-shelf, paper-reduction software package deal designed for the federal government.

The software allows the hospital to handle travel on-line, from tracking per-diem allowances and calculating charges to generating cash advance forms and authorizing reimbursement vouchers. The software furthermore lets the medical center keep an operating account of its travel expenses and its particular leftover travel budget.

"Today, for all practical purposes, the system is paperless, inch says Egolf. The software has assisted the hospital lessen document processing time period by 93 %. "The original aim focused on managing employee travel without having paper, " this individual says. "We have achieved that objective, in part credited towards the efforts associated with the staff and even in part because of the accuracy of the particular software. "

With only a $6, 1000 investment, the clinic saved $70 each employee trip and saved almost fifty percent of its one-hundred dollar, 000 T&E finances through the paper-reduction program.

Out Right now there

Consolidation of corporate and business travel arrangements by simply fewer agencies has become a growing trend considering that 1982. Nearly three out of four companies now help to make travel plans with regard to their business areas through an one agency as opposed to 51% inside of 1988. Two significant benefits of organization consolidation are typically the facilitation of data processing and T&E budgeting, as well since leverage in negotiating future travel discount rates.

A major technological enhance that permits this consolidation trend to blossom will be the introduction regarding satellite ticket printers (STPs). Using STPs enables a journey agency to combine all operations in order to one home office, whilst still being send all of necessary tickets in order to various locations immediately via various wire services. Because the expression implies, the machines prints out airline tickets on-site right away, eliminating delivery fees.

For London Haze, STPs are a new blessing. London Fog's annual T&E price range greater than $15 thousand is split equally between its a couple of locations in Eldersburg, Md., and Innovative York City. Each and every location purchases a similar number of entry pass, so equal gain access to to ticketing coming from their agency is essential. With an STP within their two places, the company services equally offices with a single agency in Baltimore. Each office features usage of immediate seats but still manages in order to save by not having to pay out courier and convey mail charges that will can range upwards to $15 for every of the more than 500 tickets each purchases every year.

Conde Nast Publications' annual T&E spending budget of more compared to $20 million is definitely allocated among their locations in Los Angeles, San Francisco, Chicago, il, New York in addition to Detroit. Since year 1994, travel arrangements have got been handled by simply a centralized company, Advanced Travel Managing in New You are able to City, by installing an STP inside each of these five locations. Throughout addition to elevated efficiency due to consolidation, Conde Nast has the capability to change vacation plans at a moment's notice in addition to have new seats in hand instantly.

The real gain would be that the machines will be owned and taken care of by the travel firm., so there is no cost to the firm. Due to typically the major expense engaged, however, STPs continue to be an option only for major ticket consumers. "STPs are a viable option throughout this process for any location of which purchases more as compared to $500, 000 each year in seat tickets, " says Shoen.

As airfare takes up 43 percent regarding any company's T&E expenses, savings obtainable through the several uses of technology have become spectacular. For instance , the capability of corporations to collect and examine their own travel trends has guided to the design of net-fare purchasing-negotiating a price among a corporation and the airline to purchase tickets it does not consist of the added expenses of commissions, overrides, transaction fees, organization transaction fees along with other discounts.

Although almost all major U. H. carriers publicly say that they no longer negotiate corporate discount rates below published industry fares, the United states Express survey upon business travel management found that 32 percent of You. S. companies experienced entry to, or previously had implemented, agreed airline discounts. The availability and technicians of these preparations vary widely by simply carrier.

What's the Price?

Fred Swaffer, transportation manager for Hewlett-Packard and a solid advocate of the particular net-pricing system, has got pioneered the idea of fee-based pricing with travel-management companies under contract with H-P. They states that H-P, which spends more than $528 million per year about T&E, plans in order to have all air travel based about net-fare pricing. "At the present time, we all have several net fares at several stages of arrangement, " he says. "These fares are negotiated with the airline carriers at the corporate level, then trickle into each associated with our seven physical regions. "

Open Kent, Western local manager for United Airlines, concurs: "United Airlines participates inside of corporate volume discounting, such as volume ticket purchases, yet not with online pricing. There are yet to see one particular net-fare agreement that makes sense to all of us. We're not opposed to it, but we just don't realize it right now. "

Kent challenges, "Airlines should technique corporations with long lasting strategic relationships quite than just discounts. We would like to see ourselves focused on the corporation rather than just involved. "

As business journey expenses nose way up, companies are realizing that better cost-management methods can make the difference.

US. business travel expenses rocketed to over $143 billion in 1994, according to Us Express' most latest survey on enterprise travel management. Private-sector employers spend a great estimated $2, 484 per employee on travel and entertainment, a 17 percent increase within the last four years.

Corporate T&E costs, now the particular third-largest controllable charge behind sales in addition to data-processing costs, usually are under new scrutiny. Corporations are realizing that even a savings of 1 percent or 2 percent can change into millions involving dollars put into their particular bottom line.

Savings of that buy will definitely get management's attention, which will be a requirement for this type of project. Engagement begins with understanding and evaluating typically the components of T&E management as a way to control and monitor this more effectively.

Hands-on management includes setting responsibility for travel management, implementing a quality-measurement system regarding travel services used, and writing in addition to distributing an elegant travel policy. Simply 64 percent of U. S. businesses have travel procedures.

Even with senior management's support, the road to savings will be rocky-only one in about three companies has efficiently instituted an internal system that will assist cut travel costs, and the myriad elements of travel will be so overwhelming, typically don't know in which to start. "The industry of journey is based upon information, " says Steven R. Schoen, founder and CEO of The Worldwide Group Inc. "Until such time as a passenger actually units foot on typically the plane, they've [only] already been purchasing information. inches

Well, information technology seems an affordable location to hammer out and about those elusive, but highly sought-after, cost savings. "Technological innovations available travel industry are allowing firms to appreciate the potential involving automation to regulate and even reduce indirect [travel] expenses, " says Roger H. Ballou, us president of the Vacation Services Group US of yankee Express. "In addition, many firms are trying to achieve high quality programs that include refined process improvement and even reengineering efforts intended to substantially enhance T&E management processes and reduce roundabout costs. "

As companies look to technology for making potential savings an actuality, they will can get really creative about the methods they employ.

The truly great Leveler

Central reservation systems were long the special domain of vacation agents as well as other business professionals. But almost all that changed on November 1992 when a Department of Transportation ruling allowed lots of people access to systems like Apollo plus SABRE. Travel-management software program, such as TripPower and TravelNet, immediately jumped up, providing businesses insight into where their T&E dollars usually are being spent.

The particular software tracks shelling out trends by interfacing with the businesses database and supplying access to centralized reservation systems that give immediate reservation details to airlines, resorts and car hire firms. These programs also allow users in order to generate computerized traveling reports on cost benefits with details in where discounts have been obtained, hotel and car usage and even patterns of vacation between cities. Genuine data gives organizations added leverage whenever negotiating discounts together with travel suppliers.

"When you possess the details, you don't include to resume square one when you decide to change firms, " says Mary Savovie Stephens, travel manager for biotech giant Chiron Corp.

Sybase Inc., the client/server software chief with an total annual T&E budget regarding more than $15 million, agrees. "Software gives us unrivaled visibility into precisely how employees are investing their travel money and better power to negotiate using travel service suppliers, " says Robert Lerner, director of credit and corporate travel services regarding Sybase Inc. "We have better entry to data, faster, in a real-time environment, which is usually expected to lead us big savings in T&E. Now many of us have control of each of our travel information and no longer must depend exclusively on the agencies and flight companies. "

The cost with this privilege depends on the volume of business. One-time acquisitions of travel-management computer software can run through under $100 to more than $125, 000. Some software providers will support smaller users by simply selling software piecemeal for $5 to be able to $12 per reserved trip, still an important savings from typically the $50 industry usual per transaction.

Simply no More Tickets

Paperless travel is capturing on faster compared to paperless office at any time did as both service providers plus consumers work jointly to reduce ticket prices for business travelers. Perhaps the most cutting-edge of the advances is usually "ticketless" travel, which often almost all significant airlines are examining.

At the same time, travel suppliers and agencies usually are trying out new solutions to allow travelers in order to book travel companies using the web, e-mail and even unattended ticketing kiosks. Best Western International, Hyatt Hotels plus several other significant hotel chains market on the Net. These services lessen the requirement for report and offer better service and this sort of peripheral benefits seeing that increased efficiency, improved tracking of travel expenses and styles, and cost decrease.

Dennis Egolf, CFO from the Veterans Extramarital relationships Clinic in Louisville, Ky., realized that the medical center's decentralized location, a quarter-mile through the medical center, made efficiency difficult. "We were losing production as well as things got lost, inch he says. "Every memo had in order to be hand-carried with regard to approval, and needed seven different replicates of each traveling order. " Because of this, Egolf tried the off-the-shelf, paper-reduction software package designed for typically the federal government.

get more info allows the clinic to handle travel across the internet, from tracking per-diem allowances and calculating expenses to making cash loan forms plus authorizing reimbursement vouchers. The program also lets the hospital keep the running account involving its travel costs and its remaining travel budget.

"Today, for all useful purposes, the program is paperless, " says Egolf. The particular software has helped the hospital lessen document processing period by 93 percent. "The original goal aimed at managing staff travel without document, " he tells. "We have attained that goal, within part due to be able to the efforts associated with the staff as well as in part due to be able to the accuracy associated with the software. inches

With only some sort of $6, 000 investment, the hospital saved seventy dollars each employee journey and saved practically half of its one hundred dollar, 000 T&E budget with the paper-reduction software.

On the market

Consolidation of corporate travel plans by fewer organizations has been the growing trend due to the fact 1982. Nearly a few outside of four firms now make vacation plans for their very own business locations through a single firm as opposed in order to 51 percent in 1988. Two major benefits of agency consolidation will be the facilitation of accounting and T&E cost management, as well seeing that leverage in discussing future travel special discounts.

A major technological advance that enables this consolidation trend to flourish will be the introduction associated with satellite ticket computer printers (STPs). Using STPs enables a travel agency to consolidate all operations to a single home office, in addition to still send most necessary tickets to be able to various locations instantly via various line services. As typically the term implies, typically the machinery prints out and about flight tickets on-site right away, eliminating delivery expenses.

For London Fog, STPs are a new blessing. London Fog's annual T&E budget of more as compared to $15 million is definitely split equally in between its two places in Eldersburg, Md., and New York City. Each area purchases the similar quantity of tickets, thus equal access in order to ticketing from other company is a have to. With an STP inside of their two locations, the company services both offices with one agency within Baltimore. Each office has access to immediate tickets and even still manages in order to save by lacking to pay courier and express mail charges that can easily range approximately $15 for each with the more than 500 tickets each buying annually.

Conde Nast Publications' annual T&E budget of more than $20 mil is allocated amongst its locations in Los Angeles, San Francisco, Chicago, Brand new York and Of detroit. Since 1994, travel arrangements have been managed by a centralized company, Advanced Travel Supervision in New York City, by putting in an STP inside each of these five locations. Inside of addition to increased efficiency due to be able to consolidation, Conde Nast now has the opportunity to change travel strategies at a moment's notice and have got new tickets throughout hand instantly.

The real benefit is that the machines are usually owned and taken care of by the travel agency., so there is no cost to the company. As a result of major expense engaged, however, STPs stay an option just for major solution purchasers. "STPs usually are a viable choice in this approach for virtually any location that will purchases more as compared to $500, 000 for each year in entry pass, " says Shoen.

As airfare takes up 43 percent associated with any company's T&E expenses, savings readily available through the various uses of technology have grown to be dramatic. Intended for example, the capability associated with corporations to collect in addition to analyze their own travel trends has resulted in typically the creation of net-fare purchasing-negotiating a price in between a corporation and even an airline to get tickets that really does not range from the included expenses of profits, overrides, transaction fees, agency transaction costs and other special discounts.

Although most key U. S. companies publicly proclaim which they don't negotiate business discounts below printed market fares, the American Express review on business traveling management found that 38 percent regarding U. S. firms had access in order to, or already acquired implemented, negotiated air travel discounts. The accessibility and mechanics associated with these arrangements differ widely by company.

What's the Selling price?

Fred Swaffer, travel manager for Hewlett-Packard and a strong ally with the net-pricing system, has pioneered typically the concept of fee-based pricing with travel-management companies under agreement with H-P. They states that H-P, which spends greater than $528 million annually on T&E, programs to have most flights based in net-fare pricing. "At the present moment, we have a number of net fares at various stages of agreement, " they says. "These fares are negotiated together with the airlines on the corporate level, next trickle down in order to each of our seven geographical regions. "

Frank Kent, Western territorial manager for Unified Airlines, concurs: "United Airlines participates throughout corporate volume discounting, for instance bulk ticket purchases, but not with net costs. I have however to see one net-fare agreement that will makes sense in order to us. We're not really opposed to this, but we merely don't understand it right this moment. "
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