As organization travel expenditures nose up, companies are realizing that much better cost-management techniques can make a distinction in US. Business travel expenses soared to more than $143 billion in 1994, according to American Express' most recent survey on organization travel management. Private-sector employers invest an approximated $2,484 per employee on travel and home entertainment, a 17 percent boost over the past 4 years.

Business T&E costs, now the third-largest manageable expenditure behind sales and data-processing costs, are under new analysis. Corporations are realizing that even a cost savings of 1 percent or 2 percent can equate into millions of dollars added to their bottom line. Cost savings of that order are sure to get management's attention, which is a requirement for this type of task. Participation begins with understanding and assessing the parts of T&E management in order to manage and monitor it more efficiently.

Hands-on management consists of appointing responsibility for travel management, executing 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 assistance, the roadway to cost savings is rocky-only one in three companies has successfully set up an internal program that will assist cut travel expenditures, and the myriad elements of travel are so overwhelming, many companies do not understand where to begin. "The market of travel is based upon information," says Steven R. Schoen, founder and CEO of The Global Group Inc. "Until such time as a traveler really sets foot on the aircraft, they've [only] been purchasing info."

If that's the case, infotech appears a feasible place to hammer out those elusive, but highly popular, savings. "Technological innovations in the business travel industry are enabling firms to realize the capacity of automation to manage and minimize indirect [travel] expenses," says Roger H. Ballou, president of the Travel Services Group USA of American Express. "In addition, many companies are starting quality programs that consist of advanced procedure improvement and reengineering efforts developed to significantly improve T&E management processes and reduce indirect expenses."
As business seek to innovation to make prospective savings a truth, they can get really imaginative about the techniques they utilize.

The Great Leveler

Centralized reservation systems were long the unique domain of travel representatives and other industry experts. But all that changed in November 1992 when a Department of Transportation ruling allowed the public access to systems such as Apollo and SABRE. Travel-management software, such as TripPower and TravelNet, right away emerged, offering corporations insight into where their T&E dollars are being spent.

The software tracks costs trends by interfacing with the corporation's database and providing access to centralized appointment systems that offer immediate reservation information to airline companies, hotels and cars and truck rental firms. These programs likewise allow users to generate digital travel reports on expense savings with details on where discounts were gotten, hotel and automobile usage and patterns of travel between cities. When negotiating discounts with travel suppliers, actual data gives corporations added leverage.

" When you own the information, you do not have to go back to square one whenever you decide to alter companies," says Mary Savovie Stephens, travel supervisor for biotech giant Chiron Corp. Sybase Inc., a client/server software leader with a yearly T&E budget of more than$ 15 million, concurs." Software provides us extraordinary presence into how workers are spending their travel dollars and much better take advantage of to negotiate with travel service providers, "says Robert Lerner, director of credit and corporate travel services for Sybase Inc." We have much better access to information, faster, in a real-time environment, which is anticipated to bring us big savings in T&E. Now we have control over our travel info and no longer have to depend specifically on the companies and airlines."

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

No More Tickets

Paperless travel is capturing on faster than the paperless office ever did as both service providers and customers collaborate to lower ticket prices for service travelers. Possibly the most innovative of the advances is "ticketless" travel, which almost all major airline companies are testing.

In the meantime, travel service providers and firms are explore new technologies to make it possible for travelers to book travel services through the Internet, email and ignored ticketing kiosks. Best Western International, Hyatt Hotels and a number of other significant hotel chains market on the Internet. These services minimize the need for paper and provide much better service and such peripheral benefits as increased effectiveness, enhanced tracking of travel expenditures and patterns, and cost reduction.

Dennis Egolf, CFO of the Veterans Affairs Medical Center in Louisville, Ky., understood that the medical center's decentralized location, a quarter-mile from the health center, made efficiency challenging. "We were losing production time and things got lost," he says. "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 application package developed for the federal government.

The software application permits the medical facility to handle travel online, from tracking per-diem allowances and calculating costs to producing cash loan forms and authorizing compensation coupons. The software application also lets the healthcare facility keep a running account of its travel expenditures and its staying travel budget.

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 just a $6,000 investment, the hospital conserved $70 each staff member journey and conserved practically half of its $200,000 T&E budget plan through the paper-reduction program.

Out There, Combination of corporate travel arrangements by fewer firms has actually been a growing pattern because 1982. Almost 3 out of 4 business now make travel strategies for their organization areas through a single firm instead of 51 percent in 1988. 2 significant advantages of company combination are the assistance of accounting and T&E budgeting, along with utilize in working out future travel discount rates.
A significant technological advance that enables this combination trend to flourish is the intro of satellite ticket printers (STPs). Utilizing STPs allows a travel agency to consolidate all operations to one office, and still send all necessary tickets to numerous places immediately via various wire services. As the term indicates, the machinery prints out airline tickets on-site right away, getting rid of delivery charges.

For London Fog, STPs are a blessing. London Fog's annual T&E spending plan of more than $15 million is split equally between its 2 places in Eldersburg, Md., and New York City. Each location purchases the very same number of tickets, so equivalent access to ticketing from their company is a must. With an STP in their two locations, the business services both offices with one agency in Baltimore. Each workplace has access to immediate tickets and still manages to conserve by not having to pay courier and reveal mail charges that can range approximately $15 for each of the more than 500 tickets each purchases every year.

Conde Nast Publications' annual T&E spending plan of more than $20 million is assigned among its areas in Los Angeles, San Francisco, Chicago, New York and Detroit. Considering that 1994, travel arrangements have actually been dealt with by a centralized company, Advanced Travel Management in New York City, by installing an STP in each of these 5 locations. In addition to increased performance due to combination, Conde Nast now has the ability to alter travel strategies at a minute's notification and have new tickets in hand immediately.

The genuine advantage is that the devices are owned and maintained by the travel agency., so there is no charge to the company. Due to the significant cost included, nevertheless, STPs remain an alternative only for significant ticket purchasers. "STPs are a practical alternative in this process for any area that buys more than $500,000 each year in tickets," says Shoen.

As air travel averages 43 percent of any company's T&E expenditures, savings available through the different uses of technology have actually ended up being significant. For example, the capability of corporations to collect and examine their own travel trends has resulted in the production of net-fare purchasing-negotiating a price between a corporation and an airline company to purchase tickets that does not include the included expenditures of commissions, overrides, deal fees, firm transaction costs and other discount rates.

Although the majority of major U.S. providers publicly announce that they do not work out corporate discount rates listed below published market fares, the American Express survey on service travel management discovered that 38 percent of U.S. business had access to, or already had actually carried out, worked out airline discount rates. The availability and mechanics of these arrangements vary commonly by provider.

What's the Price?

Fred Swaffer, transport supervisor for Hewlett-Packard and a strong supporter of the net-pricing system, has actually originated the principle of fee-based pricing with travel-management companies under contract with H-P. He states that H-P, which spends more than $528 million annually on T&E, prepares to have all flight based upon net-fare rates. "At today time, we have numerous net fares at various stages of agreement," he states. "These fares are worked out with the airline companies at the business level, then drip down to each of our seven geographical regions."

Frank Kent, Western local manager for United Airlines, concurs: "United Airlines gets involved in business 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-lasting tactical relationships instead of simply discount rates. We want to see ourselves committed to a corporation instead of just included."

As company travel expenditures nose up, business are realizing that better cost-management techniques can make a difference.

US. corporate travel expenses rocketed to more than $143 billion in 1994, according to American Express' most recent study on organization travel management. Private-sector companies invest an approximated $2,484 per staff member on travel and home entertainment, a 17 percent boost over the past four years.
Corporate T&E costs, now the third-largest manageable expenditure behind sales and data-processing expenses, are under new scrutiny. Corporations are realizing that even a cost savings of 1 percent or 2 percent can equate into countless dollars contributed to their bottom line.

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

Hands-on management includes assigning duty for travel management, executing a quality-measurement system for travel services used, and writing and dispersing a formal travel policy. Only 64 percent of U.S. corporations have travel policies.

Even with senior management's assistance, the roadway to savings is rocky-only one in 3 companies has actually successfully set up an internal program that will help cut travel expenditures, and the myriad aspects of travel are so frustrating, most companies do not know where to begin. "The market of travel is based on details," states Steven R. Schoen, creator and CEO of The Global Group Inc. "Until such time as a traveler actually sets foot on the aircraft, they've [only] been acquiring info."

If that's the case, information innovation appears a practical location to hammer out those evasive, but extremely popular, cost savings. "Technological developments in the service travel industry are permitting firms to recognize the capacity of automation to control and lower indirect [travel] costs," states Roger H. Ballou, president of the Travel Services Group USA of American Express. "In addition, lots of companies are starting quality programs that consist of sophisticated procedure improvement and reengineering efforts developed to considerably improve T&E management processes and lower indirect costs."

As business aim to technology to make prospective cost savings a reality, they can get very innovative about the approaches they employ.

The Great Leveler

Central appointment 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. read more Travel-management software application, such as TripPower and TravelNet, immediately sprang up, offering 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 offering access to central appointment systems that provide immediate reservation info to airline companies, hotels and cars and truck rental agencies. These programs also enable users to produce digital travel reports on expense savings with information on where discount rates were obtained, hotel and car usage and patterns of travel between cities. Real information offers corporations included utilize when working out discount rates with travel providers.

" When you own the information, you don't have to go back to square one every time you choose to alter firms," states Mary Savovie Stephens, travel supervisor for biotech giant Chiron Corp. Sybase Inc., a client/server software leader with an annual T&E budget of more than $15 million, agrees. "Software provides us unmatched presence into how staff members are investing their travel dollars and much better utilize to work out with travel service providers," states Robert Lerner, director of credit and business travel services for Sybase Inc. "We have much better access to information, much faster, in a real-time environment, which is anticipated to bring us huge cost savings in T&E. Now we have control over our travel details and no longer need to depend exclusively on the firms and airline companies."

The cost for this benefit depends on the volume of service. One-time purchases of travel-management software can run from under $100 to more than $125,000. Some software service providers will accommodate smaller users by selling software piecemeal for $5 to $12 per scheduled journey, still a considerable savings from the $50 industry standard per deal.

No More Tickets

Paperless travel is capturing on faster than the paperless workplace ever did as both service suppliers and customers collaborate to decrease ticket costs for business tourists. Maybe the most advanced of the advances is "ticketless" travel, which practically all major airlines are checking.

In the meantime, travel providers and agencies are try out brand-new technologies to enable travelers to book travel services by means of the Internet, email and ignored ticketing kiosks. Finest Western International, Hyatt Hotels and a number of 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. 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 website 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 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. For example, 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 an airline and a corporation to purchase tickets that does not include the added expenses of commissions, overrides, transaction fees, agency transaction fees and other discounts.

Although 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.