Base tendriling travel expenses

As business travel costs rise, companies realize that better cost management techniques can make a difference

US. According to the latest American Express survey on business travel management, spending on business travel rose to more than $ 143 billion in 1994. Private employers are estimated to spend $ 2,484 per employee on travel and entertainment, an increase of 17 percent over the past four years.

The T&E costs of companies, now the third largest controllable effort after sales and data processing costs, are being re-examined. Organizations are aware that even 1 or 2 percent savings can mean millions of dollars to add to their bottom line.

Savings of this magnitude will attract management's attention, which is a requirement for this type of project. The engagement begins with understanding and evaluating the components of T&E management so that it can be better controlled and monitored.

Practical management includes assigning responsibility for travel management, implementing a quality measurement system for the travel services used, and creating and distributing a formal travel policy. Only 64 percent of US companies have travel policies.

Even with the support of the management, the path to saving is difficult. Only one in three companies has successfully implemented an internal program that can cut travel costs, and the myriad aspects of travel are so overwhelming that most companies don't know where to start. "The travel industry is based on information," said Steven R. Schoen, founder and CEO of The Global Group Inc. "Until a passenger actually gets on the plane, he (only) has bought information."

In this case, information technology lends itself to achieving these elusive, but very desirable savings. "Thanks to technological innovations in the business travel industry, companies can leverage the potential of automation to control and reduce indirect (travel) costs," said Roger H. Ballou, president of American Express Travel Services Group USA. "In addition, many companies are launching quality programs that include sophisticated process improvement and reengineering measures to significantly improve T&E management processes and reduce indirect costs."

When companies rely on technology to realize potential savings, they can be very creative with the methods they use.

The great leveler

Centralized reservation systems have long been the exclusive domain of travel agencies and other industry professionals. All of this changed in November 1992, however, when a decision by the Department of Transportation gave the public access to systems such as Apollo and SABER. Travel management software such as TripPower and TravelNet is immediately available and offers companies insights into the purpose of their T&E dollars.

The software tracks spending trends by linking to the corporate database and providing access to central reservation systems that provide instant reservation information to airlines, hotels and car rental agencies. These programs also allow users to create computerized travel reports for cost savings. These contain information on where discounts have been granted, such as the use of hotels and cars, and travel behavior between cities. Current data provides companies with additional leverage when negotiating discounts with travel providers.

"Having the information means you don't have to go back to the first place every time you choose to switch agencies," said Mary Savovie Stephens, travel manager of biotech giant Chiron Corp.

Sybase Inc., a leading provider of client / server software with an annual T&E budget of over $ 15 million, agrees. "Software gives us an unprecedented view of how employees spend their travel dollars and better negotiation with travel providers," said Robert Lerner, director of credit and corporate travel services at Sybase Inc. "We have faster access to data – in real time -Environment that is expected to bring us great savings at T&E. Now we have control over our travel information and no longer have to rely solely on agencies and airlines. "

The cost of this privilege depends on the volume of business. One-time purchases of travel management software can range from less than $ 100 to over $ 125,000. Some software providers will accommodate smaller users by selling software piece by piece for $ 5 to $ 12 per trip booked. This is still a significant savings over the industry standard of $ 50 per transaction.

No more tickets

Paperless travel is gaining ground faster than the paperless office ever, as both service providers and consumers work together to lower ticket prices for business travelers. Perhaps the most recent advance is "ticketless" travel, which almost all major airlines are testing.

In the meantime, travel providers and travel agencies are experimenting with new technologies so travelers can book travel services over the Internet, email, and unattended ticket machines. Best Western International, Hyatt Hotels and several other large hotel chains market on the Internet. These services reduce paper consumption and offer better service and additional benefits such as greater efficiency, improved tracking of travel expenses and trends, and cost reduction.

Dennis Egolf, CFO of the Veterans Affairs Medical Center in Louisville, Kentucky, found that the decentralized location of the medical center, a quarter of a mile from the hospital, made efficiency difficult. "We lost production time and things were lost," he says. "Each memo had to be carried by hand for approval, and we needed seven different copies of each travel order." As a result, Egolf tried a software package for off-the-shelf paper reduction developed for the German government.

The software enables the hospital to manage travel online, from tracking daily allowances and calculating expenses, creating prepayment forms, and authorizing reimbursement vouchers. The software also enables the hospital to continuously track travel expenses and the remaining travel budget.

"Today the system is practically paperless," says Egolf. The software has helped the hospital reduce document processing time by 93 percent. "The original goal was to manage employee trips without paper," he says. "We achieved this goal, partly due to the efforts of the employees and partly due to the accuracy of the software."

With an investment of just $ 6,000, the hospital saved $ 70 for each staff trip and nearly half of its $ 200,000 research and development budget through the paper reduction program.

Out there

The consolidation of business travel by fewer agencies has been a growing trend since 1982. Nearly three out of four companies now plan their business trips through a single agency, down from 51 percent in 1988. Two main advantages of agency consolidation are the following: easier accounting and budgeting for T&E, and leverage in negotiating future travel discounts.

A major technological advance that has allowed this consolidation trend to flourish is the introduction of satellite card printers (STPs). By using STPs, a travel agency can summarize all processes in a home office and still send all the necessary tickets to different locations via various wired services. As the term suggests, the machine prints out flight tickets immediately on site, eliminating shipping costs.

STPs are a blessing for London Fog. London Fog's annual T&E budget of more than $ 15 million is split equally between the two locations in Eldersburg, Md., And New York City. Each location buys the same number of tickets, so equal access to ticketing through the agency is a must. With an STP at both locations, the company serves both offices with an agency in Baltimore. Every office has access to instant tickets and can still save by not having to pay courier and express postage, which can be up to $ 15 for each of the more than 500 tickets purchased each year.

Conde Nast Publications' annual T&E budget of more than $ 20 million is distributed across locations in Los Angeles, San Francisco, Chicago, New York, and Detroit. Since 1994, travel preparations have been carried out by the centralized agency Advanced Travel Management in New York City by installing an STP at each of these five locations. In addition to increasing efficiency through consolidation, Conde Nast can now change travel plans at any time and have new tickets immediately at hand.

The real advantage is that the machines are owned and serviced by the travel agency. So there are no costs for the company. However, due to the high cost, STPs remain an option only for large ticket buyers. "STPs are a viable option in this process for any location that buys more than $ 500,000 in tickets a year," says Shoen.

With flight costs averaging 43 percent of a company's T&E costs, the savings that can be achieved by using different technologies have become dramatic. For example, the ability of companies to capture and analyze their own travel trends has led to the creation of a net fare purchase, where a price is negotiated between a company and an airline to buy tickets that do not involve the additional cost of commissions, overrides are taken into account. Transaction fees, agency transaction fees and other discounts.

Although most major U.S. airlines publicly state that they are not negotiating corporate discounts below published market prices, the American Express Business Travel Survey found that 38 percent of U.S. companies had, or had already introduced, negotiated airline discounts. The availability and mechanics of these arrangements vary widely depending on the carrier.

What's the price?

Fred Swaffer, transport manager at Hewlett-Packard and a strong supporter of the network pricing system, introduced the concept of fee-based pricing with travel management companies on behalf of H-P. He explains that H-P, which spends more than $ 528 million a year on T&E, plans to do all air travel based on net fare prices. "We currently have multiple net tariffs at different stages of the agreement," he says. "These tariffs are negotiated with the airlines at the corporate level and then transferred to each of our seven geographic regions."

Frank Kent, regional manager for the western part of United Airlines, agrees: "United Airlines participates in volume discounts for companies, for example when buying large tickets, but not with net prices. I do not yet have a net tariff agreement that is meaningful to us. We are not against it, but we just don't understand it. "

Kent emphasizes: "Airlines should address companies with long-term strategic relationships and not just discounts. We want us to be committed to a company and not just involved."

As business travel costs rise, companies realize that better cost management techniques can make a difference.

US. According to the latest American Express survey on business travel management, spending on business travel rose to more than $ 143 billion in 1994. Private employers are estimated to spend $ 2,484 per employee on travel and entertainment, an increase of 17 percent over the past four years.

The T&E costs of companies, now the third largest controllable effort after sales and data processing costs, are being re-examined. Organizations are aware that even 1 or 2 percent savings can mean millions of dollars to add to their bottom line.

Savings of this magnitude will attract management's attention, which is a requirement for this type of project. The engagement begins with understanding and evaluating the components of T&E management so that it can be better controlled and monitored.

Practical management includes assigning responsibility for travel management, implementing a quality measurement system for the travel services used, and creating and distributing a formal travel policy. Only 64 percent of US companies have travel policies.

Even with the support of the management, the path to saving is difficult. Only one in three companies has successfully implemented an internal program that can cut travel costs, and the myriad aspects of travel are so overwhelming that most companies don't know where to start. "The travel industry is based on information," said Steven R. Schoen, founder and CEO of The Global Group Inc. "Until a passenger actually gets on the plane, he (only) has bought information."

In this case, information technology lends itself to achieving these elusive, but very desirable savings. "Thanks to technological innovations in the business travel industry, companies can leverage the potential of automation to control and reduce indirect (travel) costs," said Roger H. Ballou, president of American Express Travel Services Group USA. "In addition, many companies are launching quality programs that include sophisticated process improvement and reengineering measures to significantly improve T&E management processes and reduce indirect costs."

When companies rely on technology to realize potential savings, they can be very creative with the methods they use.

The great leveler

Centralized reservation systems have long been the exclusive domain of travel agencies and other industry professionals. All of this changed in November 1992, however, when a decision by the Department of Transportation gave the public access to systems such as Apollo and SABER. Travel management software such as TripPower and TravelNet is immediately available and offers companies insights into the purpose of their T&E dollars.

The software tracks spending trends by linking to the corporate database and providing access to central reservation systems that provide instant reservation information to airlines, hotels and car rental agencies. These programs also allow users to create computerized travel reports for cost savings. These contain information on where discounts have been granted, such as the use of hotels and cars, and travel behavior between cities. Current data provides companies with additional leverage when negotiating discounts with travel providers.

"Having the information means you don't have to go back to the first place every time you choose to switch agencies," said Mary Savovie Stephens, travel manager of biotech giant Chiron Corp.

Sybase Inc., a leading provider of client / server software with an annual T&E budget of over $ 15 million, agrees. "Software gives us an unprecedented view of how employees spend their travel dollars and better negotiation with travel providers," said Robert Lerner, director of credit and corporate travel services at Sybase Inc. "We have faster access to data – in real time -Environment that is expected to bring us great savings at T&E. Now we have control over our travel information and no longer have to rely solely on agencies and airlines. "

The cost of this privilege depends on the volume of business. One-time purchases of travel management software can range from less than $ 100 to over $ 125,000. Some software providers will accommodate smaller users by selling software piece by piece for $ 5 to $ 12 per trip booked. This is still a significant savings over the industry standard of $ 50 per transaction.

No more tickets

Paperless travel is gaining ground faster than the paperless office ever, as both service providers and consumers work together to lower ticket prices for business travelers. Perhaps the most recent advance is "ticketless" travel, which almost all major airlines are testing.

In the meantime, travel providers and travel agencies are experimenting with new technologies so travelers can book travel services over the Internet, email, and unattended ticket machines. Best Western International, Hyatt Hotels and several other large hotel chains market on the Internet. These services reduce paper consumption and offer better service and additional benefits such as greater efficiency, improved tracking of travel expenses and trends, and cost reduction.

Dennis Egolf, CFO of the Veterans Affairs Medical Center in Louisville, Kentucky, found that the decentralized location of the medical center, a quarter of a mile from the hospital, made efficiency difficult. "We lost production time and things were lost," he says. "Each memo had to be carried by hand for approval, and we needed seven different copies of each travel order." As a result, Egolf tried a software package for off-the-shelf paper reduction developed for the German government.

The software enables the hospital to manage travel online, from tracking daily allowances and calculating expenses, creating prepayment forms, and authorizing reimbursement vouchers. The software also enables the hospital to continuously track travel expenses and the remaining travel budget.

"Today the system is practically paperless," says Egolf. The software has helped the hospital reduce document processing time by 93 percent. "The original goal was to manage employee trips without paper," he says. "We achieved this goal, partly due to the efforts of the employees and partly due to the accuracy of the software."

With an investment of just $ 6,000, the hospital saved $ 70 for each staff trip and nearly half of its $ 200,000 research and development budget through the paper reduction program.

Out there

The consolidation of business travel by fewer agencies has been a growing trend since 1982. Nearly three out of four companies now plan their business trips through a single agency, down from 51 percent in 1988. Two main advantages of agency consolidation are the following: easier accounting and budgeting for T&E, and leverage in negotiating future travel discounts.

A major technological advance that has allowed this consolidation trend to flourish is the introduction of satellite card printers (STPs). By using STPs, a travel agency can summarize all processes in a home office and still send all the necessary tickets to different locations via various wired services. As the term suggests, the machine prints out flight tickets immediately on site, eliminating shipping costs.

STPs are a blessing for London Fog. London Fog's annual T&E budget of more than $ 15 million is split equally between the two locations in Eldersburg, Md., And New York City. Each location buys the same number of tickets, so equal access to ticketing through the agency is a must. With an STP at both locations, the company serves both offices with an agency in Baltimore. Every office has access to instant tickets and can still save by not having to pay courier and express postage, which can be up to $ 15 for each of the more than 500 tickets purchased each year.

Conde Nast Publications' annual T&E budget of more than $ 20 million is distributed across locations in Los Angeles, San Francisco, Chicago, New York, and Detroit. Since 1994, travel preparations have been carried out by the centralized agency Advanced Travel Management in New York City by installing an STP at each of these five locations. In addition to increasing efficiency through consolidation, Conde Nast can now change travel plans at any time and have new tickets immediately at hand.

The real advantage is that the machines are owned and serviced by the travel agency. So there are no costs for the company. However, due to the high cost, STPs remain an option only for large ticket buyers. "STPs are a viable option in this process for any location that buys more than $ 500,000 in tickets a year," says Shoen.

With flight costs averaging 43 percent of a company's T&E costs, the savings that can be achieved by using different technologies have become dramatic. For example, the ability of companies to capture and analyze their own travel trends has led to the creation of a net fare purchase, where a price is negotiated between a company and an airline to buy tickets that do not involve the additional cost of commissions, overrides are taken into account. Transaction fees, agency transaction fees and other discounts.

Although most major U.S. airlines publicly state that they are not negotiating corporate discounts below published market prices, the American Express Business Travel Survey found that 38 percent of U.S. companies had, or had already introduced, negotiated airline discounts. The availability and mechanics of these arrangements vary widely depending on the carrier.

What's the price?

Fred Swaffer, transport manager at Hewlett-Packard and a strong supporter of the network pricing system, introduced the concept of fee-based pricing with travel management companies on behalf of H-P. He explains that H-P, which spends more than $ 528 million a year on T&E, plans to do all air travel based on net fare prices. "We currently have multiple net tariffs at different stages of the agreement," he says. "These tariffs are negotiated with the airlines at the corporate level and then transferred to each of our seven geographic regions."

Frank Kent, regional manager for the western part of United Airlines, agrees: "United Airlines participates in volume discounts for companies, for example when buying large tickets, but not with net prices. I do not yet have a net tariff agreement that is meaningful to us. We are not against it, but we just don't understand it. "

Kent emphasizes: "Airlines should address companies with long-term strategic relationships and not just discounts. We want us to be committed to a company and not just involved."

Source: http://orlandomap.info/base-tendriling-travel-expenses