Foundation Tendriling Journey Expenses

As business enterprise travel charges nose upward, corporations are recognizing that superior cost-management methods can make a variation

US. corporate journey fees rocketed to additional than $143 billion in 1994, in accordance to American Express' most up-to-date survey on organization journey administration. Private-sector companies shell out an approximated $2,484 per worker on journey and amusement, a 17 p.c improve over the past four years.

Corporate T&E costs, now the third-largest controllable expense behind sales and data-processing costs, are under new scrutiny. Corporations are realizing that even a savings of 1 per cent or two percent 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 staycation boutique of project. Involvement begins with understanding and evaluating the components of T&E administration in order to control and monitor it extra effectively.

Hands-on management includes assigning responsibility for travel management, implementing a quality-measurement system for vacation services used, and writing and distributing a formal vacation policy. Only 64 per cent of U.S. corporations have journey policies.

Even with senior management's support, the road to savings is rocky-only one in three companies has successfully instituted an internal program that will help cut vacation charges, and the myriad aspects of vacation are so overwhelming, most corporations don't know where to start. "The industry of journey 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 organization vacation industry are allowing firms to realize the potential of automation to control and reduce indirect [travel] costs," says Roger H. Ballou, president of the Journey Services Group USA of American Express. "In addition, many companies 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 businesses 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.