As organization travel costs nose upward, business are recognizing that much better cost-management techniques can make a distinction in United States. Corporate travel costs soared to more than $143 billion in 1994, according to American Express' most recent study on organization travel management. Private-sector employers spend an approximated $2,484 per employee on travel and entertainment, a 17 percent boost over the previous four years.

Corporate T&E costs, now the third-largest manageable expense behind sales and data-processing costs, are under new analysis. Corporations are realizing that even a savings of 1 percent or 2 percent can equate into countless dollars contributed to their bottom line. Savings of that order make sure to get management's attention, which is a requirement for this kind of task. Involvement begins with understanding and assessing the elements of T&E management in order to manage and monitor it better.

Hands-on management includes designating obligation for travel management, carrying out a quality-measurement system for travel services utilized, and composing and distributing a formal travel policy. Only 64 percent of U.S. corporations have travel policies.

Even with senior management's support, the roadway to cost savings is rocky-only one in 3 business has actually effectively set up an internal program that will assist cut travel costs, and the myriad aspects of travel are so overwhelming, a lot of business do not understand where to begin. "The market of travel is based upon details," states Steven R. Schoen, creator and CEO of The Global Group Inc. "Until such time as a guest in fact 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. "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 business look to innovation to make potential cost savings a reality, they can get really innovative about the methods they utilize.

The Great Leveler

Centralized appointment systems were long the special domain of travel representatives and other industry professionals. However all that changed in November 1992 when a Department of Transportation judgment allowed the general public access to systems such as Apollo and SABRE. Travel-management software application, such as TripPower and TravelNet, instantly emerged, offering corporations insight into where their T&E dollars are being invested.

The software tracks costs trends by interfacing with the corporation's database and offering access to centralized booking systems that supply immediate appointment information to airline companies, hotels and car rental companies. These programs likewise enable users to create computerized travel reports on expense savings with details on where discount rates were gotten, hotel and vehicle use and patterns of travel between cities. Actual information gives corporations added utilize when negotiating discounts with travel providers.

" When you own the information, you don't need to go back to square one every time you decide to alter firms," says Mary Savovie Stephens, travel manager for biotech huge Chiron Corp. Sybase Inc., a client/server software application leader with an annual T&E budget plan of more than$ 15 million, concurs." Software gives us unmatched exposure into how staff members are spending their travel dollars and much better utilize to negotiate with travel service suppliers, "says Robert Lerner, director of credit and business travel services for Sybase Inc." We have much better access to information, faster, in a real-time environment, which is expected to bring us huge cost savings in T&E. Now we have control over our travel details and no longer have to depend solely on the airlines and agencies."

The expense for this privilege depends on the volume of service. One-time purchases of travel-management software application can range from under $100 to more than $125,000. Some software application providers will accommodate smaller users by selling software application piecemeal for $5 to $12 per scheduled trip, still a substantial savings from the $50 market norm per transaction.

No More Tickets

Paperless travel is capturing on faster than the paperless workplace ever did as both service suppliers and customers collaborate to lower ticket rates for organization travelers. Perhaps the most cutting-edge of the advances is "ticketless" travel, which almost all major airlines are testing.

In the meantime, travel service providers and companies are experimenting with new technologies to allow travelers to book travel services through the Internet, e-mail and unattended ticketing kiosks. Best Western International, Hyatt Hotels and several other major hotel chains market on the Internet. These services reduce the requirement for paper and provide better service and such peripheral benefits as increased efficiency, improved tracking of travel expenses and patterns, and expense decrease.

Dennis Egolf, CFO of the Veterans Affairs Medical Center in Louisville, Ky., understood that the medical center's decentralized area, a quarter-mile from the health center, made performance hard. "We were losing production time and things got lost," he states. "Every memo needed to be hand-carried for approval, and we required seven different copies of each travel order." As an outcome, Egolf attempted an off-the-shelf, paper-reduction software bundle designed for the federal government.

The software permits the health center to handle travel on-line, from tracking per-diem allowances and calculating expenditures to creating cash loan forms and authorizing reimbursement coupons. The software application also lets the medical facility keep a running account of its travel expenses and its staying travel budget plan.

The software has helped the hospital reduce document processing time by 93 percent. "The original goal focused on managing employee travel without paper," he says.
With only a $6,000 financial investment, the healthcare facility saved $70 each staff member trip and saved nearly half of its $200,000 T&E budget plan through the paper-reduction program.

Out There, Consolidation of business travel arrangements by less companies has been a growing pattern since 1982. Almost three out of 4 companies now make travel strategies for their service locations through a single company as opposed to 51 percent in 1988. 2 major advantages of agency debt consolidation are the facilitation of accounting and T&E budgeting, along with take advantage of in working out future travel discounts.
A significant technological advance that enables this debt consolidation trend to thrive is the intro of satellite ticket printers (STPs). Utilizing STPs makes it possible for a travel bureau to consolidate all operations to one office, and still send out all necessary tickets to different places quickly via various wire services. As the term suggests, the equipment prints out airline company tickets on-site immediately, eliminating delivery charges.

Each location purchases the same number of tickets, so equal access to ticketing from their agency is a must. Each office has access to immediate tickets and still manages to save by not having to pay courier and express mail charges that can range up to $15 for each of the more than 500 tickets each purchases annually.

Conde Nast Publications' yearly T&E budget plan of more than $20 million is designated among its areas in Los Angeles, San Francisco, Chicago, New York and Detroit. Considering that 1994, travel arrangements have been dealt with by a central agency, Advanced Travel Management in New York City, by installing an STP in each of these 5 locations. In addition to increased efficiency due to combination, Conde Nast now has the ability to alter itinerary at a moment's notice and have brand-new tickets in hand quickly.

The real benefit is that the devices are owned and preserved by the travel agency., so there is no cost to the company. Due to the major expenditure involved, however, STPs stay an option only for significant ticket purchasers. "STPs are a practical alternative in this process for any place that purchases more than $500,000 annually in tickets," states Shoen.

As airfare averages 43 percent of any business's T&E expenditures, savings accessible through the numerous uses of technology have actually ended up being significant. For instance, the ability of corporations to collect and evaluate their own travel patterns has actually led to the development of net-fare purchasing-negotiating a cost between an airline and a corporation to acquire tickets that does not include the added costs of commissions, overrides, transaction costs, firm transaction fees and other discounts.

Although most major U.S. carriers publicly declare that they do not work out business discount rates below published market fares, the American Express study on organization travel management discovered that 38 percent of U.S. business had access to, or currently had implemented, negotiated airline company discount rates. The schedule and mechanics of these plans vary commonly by carrier.

What's the Price?

Fred Swaffer, transportation manager for Hewlett-Packard and a strong advocate of the net-pricing system, has pioneered the concept of fee-based pricing with travel-management companies under contract with H-P. He states that H-P, which spends more than $528 million per year on T&E, plans to have all air travel based on net-fare pricing.

Frank Kent, Western regional manager for United Airlines, concurs: "United Airlines participates in business volume discounting, such as bulk ticket purchases, however not with net rates. I have yet to see one net-fare arrangement that makes sense to us. We're not opposed to it, however we just don't comprehend it today."

Kent worries, "Airlines must approach corporations with long-term strategic relationships rather than just discount rates. We want to see ourselves devoted to a corporation rather than just included."

As company travel expenses nose up, companies are realizing that much better cost-management techniques can make a distinction.

US. business travel costs rocketed to more than $143 billion in 1994, according to American Express' latest survey on organization travel management. Private-sector companies spend an estimated $2,484 per employee on travel and entertainment, a 17 percent increase over the past four years.
Business T&E expenses, now the third-largest controllable expenditure behind sales and data-processing costs, are under new examination. Corporations are realizing that even a cost savings of 1 percent or 2 percent can translate into countless dollars added to their bottom line.

Savings of that order make sure to get management's attention, which is a requirement for this kind of task. Involvement begins with understanding and examining the parts of T&E management in order to control and monitor it better.

Hands-on management consists of appointing responsibility for travel management, carrying out a quality-measurement system for travel services used, and writing and dispersing an official travel policy. Only 64 percent of U.S. corporations have travel 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 travel expenses, and the myriad aspects of travel are so overwhelming, most companies don't know more info where to start.

If that's the case, details innovation seems a practical place to hammer out those elusive, however extremely popular, cost savings. "Technological developments in business travel market are permitting companies to realize the potential of automation to manage and lower indirect [travel] costs," says Roger H. Ballou, president of the Travel Services Group USA of American Express. "In addition, numerous business are embarking on quality programs that include sophisticated process enhancement and reengineering efforts created to considerably improve T&E management processes and decrease indirect costs."

As business aim to innovation to make potential savings a reality, they can get extremely innovative about the techniques they use.

The Great Leveler

Central reservation systems were long the exclusive domain of travel agents and other market specialists. 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, instantly emerged, supplying corporations insight into where their T&E dollars are being invested.

The software application tracks spending trends by interfacing with the corporation's database and providing access to centralized appointment systems that supply immediate reservation info to airline companies, hotels and cars and truck rental agencies. These programs also enable users to create digital travel reports on cost savings with details on where discounts were obtained, hotel and vehicle use and patterns of travel in between cities. When negotiating discounts with travel suppliers, actual data gives corporations added leverage.

" When you own the information, you do not need to go back to square one each time you decide to change agencies," states Mary Savovie Stephens, travel supervisor for biotech giant Chiron Corp. Sybase Inc., a client/server software leader with an annual T&E spending plan of more than $15 million, concurs. "Software provides us unprecedented exposure into how employees are spending their travel dollars and much better take advantage of to negotiate with travel service suppliers," states Robert Lerner, director of credit and business travel services for Sybase Inc. "We have better access to data, much faster, in a real-time environment, which is anticipated to bring us big cost savings in T&E. Now we have control over our travel details and no longer have to depend exclusively on the firms and airline companies."

The cost for this privilege depends upon the volume of service. One-time purchases of travel-management software can range from under $100 to more than $125,000. Some software application service providers will accommodate smaller sized users by offering software piecemeal for $5 to $12 per scheduled trip, still a significant cost savings from the $50 industry standard per transaction.

No More Tickets

Paperless travel is catching on faster than the paperless workplace ever did as both company and customers collaborate to reduce ticket rates for service travelers. Maybe the most advanced of the advances is "ticketless" travel, which nearly all major airline companies are evaluating.

In the meantime, travel suppliers and agencies are exploring with brand-new technologies to allow tourists to book travel services via the Internet, email and ignored ticketing kiosks. Best Western International, Hyatt Hotels and numerous other major hotel chains market on the Internet. These services reduce the need for paper and offer better service and such peripheral benefits as increased efficiency, improved tracking of travel expenses and trends, and cost reduction.

Dennis Egolf, CFO of the Veterans Affairs Medical Center in Louisville, Ky., realized that the medical center's decentralized location, a quarter-mile from the hospital, made efficiency difficult. "We were losing production time and things got lost," he says. "Every memo had to be hand-carried for approval, and we required seven different copies of each travel order." As a result, Egolf tried an off-the-shelf, paper-reduction software package designed for the federal government.

The software allows the hospital to manage travel on-line, from tracking per-diem allowances and calculating expenses to generating cash advance forms and authorizing reimbursement vouchers. The software also lets the hospital keep a running account of its travel expenses and its remaining travel budget.
" Today, for all practical purposes, the system is paperless," says Egolf. The software has helped the hospital reduce document processing time by 93 percent. "The original goal focused on managing employee travel without paper," he says. "We have achieved that goal, in part due to the efforts of the staff and in part due to the accuracy of the software."
With only a $6,000 investment, the hospital saved $70 each employee trip and saved almost half of its $200,000 T&E budget through the paper-reduction program.

A major technological advance that allows this consolidation trend to flourish is the introduction of satellite ticket printers (STPs). Using STPs enables a travel agency to consolidate all operations to one home office, and still send all necessary tickets to various locations instantly via various wire services. As the term implies, the machinery prints out airline tickets on-site immediately, eliminating delivery charges.

For London Fog, STPs are a blessing. London Fog's annual T&E budget of more than $15 million is split equally between its two locations in Eldersburg, Md., and New York City. Each location purchases the same number of tickets, so equal access to ticketing from their agency is a must. With an STP in their two locations, the company services both offices with one agency in Baltimore. Each office has access to immediate tickets and still manages to save by not having to pay courier and express mail charges that can range up to $15 for each of the more than 500 tickets each purchases annually.

Conde Nast Publications' annual T&E budget of more than $20 million is allocated among its locations in Los Angeles, San Francisco, Chicago, New York and Detroit. Since 1994, travel arrangements have been handled by a centralized agency, Advanced Travel Management in New York City, by installing an STP in each of these five locations. In addition to increased efficiency due to consolidation, Conde Nast more info now has the ability to change travel plans at a moment's notice and have new tickets in hand instantly.

The real benefit is that the machines are owned and maintained by the travel agency., so there is no cost to the company. Due to the major expense involved, however, STPs remain an option only for major ticket purchasers. "STPs are a viable option in this process for any location that purchases more than $500,000 per year in tickets," says Shoen.

As airfare averages 43 percent of any company's T&E expenses, savings obtainable through the various uses of technology have become dramatic. The ability of corporations to collect and analyze their own travel trends has led to the creation of net-fare purchasing-negotiating a price between a corporation and an airline to purchase tickets that does not include the added expenses of commissions, overrides, transaction fees, agency transaction fees and other discounts.

Most major U.S. carriers publicly proclaim that they don't negotiate corporate discounts below published market fares, the American Express survey on business travel management found that 38 percent of U.S. companies had access to, or already had implemented, negotiated airline discounts. The availability and mechanics of these arrangements vary widely by carrier.

What's the Price?

Fred Swaffer, transportation manager for Hewlett-Packard and a strong advocate of the net-pricing system, has pioneered the concept of fee-based pricing with travel-management companies under contract with H-P. He states that H-P, which spends more than $528 million per year on T&E, plans to have all air travel based on net-fare pricing.

Frank Kent, Western regional manager for United Airlines, concurs: "United Airlines participates in corporate volume discounting, such as bulk ticket purchases, but not with net pricing. I have yet to see one net-fare agreement that makes sense to us. We're not opposed to it, but we just don't understand it right now."

Kent stresses, "Airlines should approach corporations with long-term strategic relationships rather than just discounts. We would like to see ourselves committed to a corporation rather than just involved."


These programs also allow users to generate computerized travel reports on cost savings with details on where discounts were obtained, hotel and car usage and patterns of travel between cities." Software gives us unprecedented visibility into how employees are spending their travel dollars and better leverage to negotiate with travel service suppliers, "says Robert Lerner, director of credit and corporate travel services for Sybase Inc." We have better access to data, faster, in a real-time environment, which is expected to bring us big savings in T&E. Since 1994, travel arrangements have been handled by a centralized agency, Advanced Travel Management in New York City, by installing an STP in each of these five locations.

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 travel expenses, and the myriad aspects of travel are so overwhelming, most companies don't know where to start. "Software gives us unprecedented visibility into how employees are spending their travel dollars and better leverage to negotiate with travel service suppliers," says Robert Lerner, director of credit and corporate travel services for Sybase Inc. "We have better access to data, faster, in a real-time environment, which is expected to bring us big savings in T&E.