Base Tendriling Travel Expenses

As organization vacation expenses nose upward, corporations are realizing that much better cost-management procedures will make a variation

US. company travel costs rocketed to far more useful content $143 billion in 1994, in accordance to American Express' most up-to-date study on business enterprise travel administration. Private-sector employers devote an believed $2,484 per staff on vacation and leisure, a seventeen percent enhance in the last four decades.

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 p.c or two p.c 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 of project. Involvement begins with understanding and evaluating the components of T&E administration in order to control and monitor it additional effectively.

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

Even with senior management's support, the road to savings is rocky-only one in three firms has successfully instituted an internal program that will help cut vacation fees, and the myriad aspects of vacation are so overwhelming, most companies don't know where to start. "The industry of travel 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 travel 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 providers look to technology to make potential savings a reality, they can get very creative about the methods they employ.