Foundation Tendriling Journey Expenses

As organization journey charges nose upward, organizations are recognizing that superior cost-management tactics may make a big difference

US. company travel charges rocketed to much more read more $143 billion in 1994, according to American Express' most recent survey on business vacation management. Private-sector employers commit an believed $2,484 per staff on vacation and entertainment, a 17 percent raise over the past 4 decades.

Corporate T&E costs, now the third-largest controllable expense behind sales and data-processing costs, are under new scrutiny. Corporations are noticing that even a savings of 1 % 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 of project. Involvement begins with understanding and evaluating the components of T&E management in order to control and monitor it much more effectively.

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

Even with senior management's support, the road to savings is rocky-only one in three organizations has successfully instituted an internal program that will help cut travel expenditures, and the myriad aspects of vacation are so overwhelming, most businesses 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 company 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 Travel Services Group USA of American Express. "In addition, many businesses 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.