Basic travel costs related to unfolding

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As expenses for business travel rise, companies are aware that better cost management techniques can make a difference

US. According to American Express & # 39; Business travel expenses increased in 1994 to over $ 143 billion. the latest survey on business travel management. Private sector employers spend about $ 2,484 per employee on travel and entertainment, an increase of 17% over the last four years.

The costs of corporate overheads and technical costs, which are currently the third largest controlled cost of sales and data processing costs, are subject to a new control. Corporations are aware that even saving 1 or 2 percent can translate into millions of dollars added to the bottom line.

The savings associated with this order will certainly attract management attention, which is a requirement for this type of project. Commitment begins with understanding and assessing RCP management components for more effective control and monitoring.

Practical management involves assigning responsibility for travel management, implementing a quality measurement system for tourism services used, and writing and disseminating a formal travel policy. Only 64 percent of US corporations have travel policies.

Even with the support of senior management, the path to savings is stony – only every third company has successfully implemented an internal program that will help reduce travel costs, and the countless aspects of travel are so overwhelming that most companies do not do it 39; I don't know where to start. "The travel industry is based on information," says Steven R. Schoen, founder and CEO of The Global Group Inc. "Until the passenger actually set foot on the plane, they bought (only) Information."

If this is the case, information technology seems like a real place to collect these elusive, but highly sought after savings. "Technological innovations in the business travel industry allow companies to use the potential of automation in controlling and reducing indirect costs (travel)," says Roger H. Ballou, president of the Travel Services Group USA at American Express. "In addition, many companies are joining quality programs that include sophisticated process improvement and modernization work to significantly improve T&E management processes and reduce indirect costs."

When companies look for technology to make potential savings a reality, they can be very creative in the methods they use.

A great leveler

Centralized booking systems have long been the exclusive domain of travel agencies and other industry professionals. Everything changed, however, in November 1992, when the Transport Department ruling allowed universal access to systems such as Apollo and SABER. Travel management software such as TripPower and TravelNet immediately popped up, providing corporations with insight into where their dollars are being spent.

The software tracks spending trends by connecting to the corporate database and providing access to centralized booking systems that provide instant booking information for airlines, hotels and car rentals. These programs also allow users to generate computerized travel reports on cost savings, containing detailed information about where discounts were obtained, hotel and car use, and inter-city travel patterns. Real data gives corporations an additional leverage when negotiating rebates with travel service providers.

"With information, you don't have to go back to the square every time you decide to change agencies," says Mary Savovie Stephens, Travel Manager biotech giant Chiron Corp.

Sybase Inc., a client / server software leader with an annual T&E budget of over USD 15 million, agrees. "The software provides us with unprecedented insight into how employees spend money on travel, and better negotiating leverage with travel service providers," says Robert Lerner, director of Credit and Corporate Travel Services at Sybase Inc. ". We have better access to data, faster, in real-time environment, which is expected to bring us significant savings in the field of T&E. We now have control over our travel information and we no longer have to rely solely on agencies and airlines. "

The cost of this privilege depends on the size of the business. One-time purchases of travel management software can last from less than USD 100 to over USD 125,000. Some software vendors can accommodate smaller users by selling the software fragmentarily for $ 5 to $ 12 per booked trip, which is still significant savings compared to the industry $ 50 per transaction standard.

No more tickets

Traveling without paper documents is faster than ever in an office without documents, because both service providers and consumers work together to lower ticket prices for business travelers. Perhaps the most advanced achievement is the "no tickets" journey, which is tested by almost all major airlines.

In the meantime, travel agencies and travel agencies are experimenting with new technologies to enable travelers to book travel services via the Internet, email and unattended ticket kiosks. Best Western International, Hyatt Hotels and several other large hotel chains sell on the Internet. These services reduce the need for paper and offer better service as well as additional benefits such as increased efficiency, better tracking of travel costs and trends, and cost reduction.

Dennis Egolf, financial director of the Veterans Affairs Medical Center in Louisville, Ky., He realized that the decentralized location of the medical center, a quarter mile from the hospital, impedes performance. "We lost production time and things were lost," he says. "Each note had to be manually submitted for approval, and we needed seven different copies of each travel order." As a result, Egolf tried the commercially available paper reduction software package designed for the federal government.

The software allows the hospital to manage on-line travel, from tracking daily allowances and calculating expenses to generating cash advance forms and authorizing reimbursement coupons. The software also allows the hospital to keep current bills for travel expenses and the 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 was to manage paperless employee travel," he says. "We achieved this goal, partly due to the efforts of the staff and partly due to the accuracy of the software."

With an investment of only $ 6,000, the hospital saved $ 70 on employee travel and saved almost half of its $ 200,000 in research and development budget through a paper reduction program.

There

The consolidation of business travel organization by fewer agencies has been a growing trend since 1982. Almost three out of four companies are currently planning business travel through one agency, as opposed to 51 percent in 1988. The two main advantages of agency consolidation are: facilitating accounting and budgeting for T&E, and leverage in negotiating future tourist discounts.

The main technological progress that allows this consolidation trend to flourish is the introduction of satellite ticket printers (STPs). Using STP services allows travel agents to consolidate all operations in one home office and send all necessary tickets to different locations instantly via different wired services. As the term suggests, the machine prints airline tickets on site immediately, eliminating delivery costs.

For London Fog, STPs are a blessing. The London Fog T&E annual budget of over $ 15 million is evenly split between its two locations in Eldersburg, Md. And New York. Each location buys the same number of tickets, so you need equal access to tickets at their agency. With STP in its two locations, the company serves both offices with one agency in Baltimore. Each office has access to direct tickets and continues to save without paying courier and express delivery, which can be up to $ 15 for each of over 500 tickets of each purchase per year.

Conde Nast Publications & # 39; T&E's annual budget of over USD 20 million is allocated among its locations in Los Angeles, San Francisco, Chicago, New York and Detroit. Since 1994, the organization of travel was handled by the centralized agency Advanced Travel Management in New York, installing STP in each of these five locations. In addition to the increased efficiency due to consolidation, Conde Nast now has the ability to immediately change travel plans and immediately have new tickets.

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

Because average flight costs amount to 43 percent of the company's T&E expenses, the savings that can be made by various technology applications have become dramatic. For example, the ability of a corporation to collect and analyze its own travel trends has led to the creation of a net purchase tariff – price negotiation between the corporation and the airline for the purchase of tickets, which does not include additional commission costs, substitutions, transaction fees, agency transaction fees and other discounts.

Although most major US carriers publicly announce that they are not negotiating corporate discounts below published market prices, American Express's business travel management study showed that 38 percent of US companies had access or have already implemented negotiated discounts for airlines. The availability and mechanics of these solutions vary considerably from carrier to carrier.

What is the price?

Fred Swaffer, Transport Manager at Hewlett-Packard and a strong supporter of the net pricing system, was a pioneer in the concept of fee-based price lists in travel management companies based on an agreement with HP. He says HP, which spends more than $ 528 million annually on T&E, plans that all air travel will be based on net prices. "We currently have several net tariffs at various stages of the contract," he says. "These fares are negotiated with airlines at corporate level and then flow into each of our seven geographical regions."

Frank Kent, the West Regional Manager of United Airlines, admits: "United Airlines participates in discounting corporate volumes, such as buying mass tickets, but not at net prices. I haven't seen another tariff agreement that makes sense to us. "# 39; we don't oppose it, but we just don't understand it now. "

Kent emphasizes: "Airlines should address corporations with long-term strategic relationships, not just discounts. We would like us to be involved in the activities of the corporation, and not just involved in it. "

As expenses for business travel rise, companies are aware that better cost management techniques can make a difference.

US. According to American Express & # 39; Business travel expenses increased in 1994 to over $ 143 billion. the latest survey on business travel management. Private sector employers spend about $ 2,484 per employee on travel and entertainment, an increase of 17% over the last four years.

The costs of corporate overheads and technical costs, which are currently the third largest controlled cost of sales and data processing costs, are subject to a new control. Corporations are aware that even saving 1 or 2 percent can translate into millions of dollars added to the bottom line.

The savings associated with this order will certainly attract management attention, which is a requirement for this type of project. Commitment begins with understanding and assessing RCP management components for more effective control and monitoring.

Practical management involves assigning responsibility for travel management, implementing a quality measurement system for tourism services used, and writing and disseminating a formal travel policy. Only 64 percent of US corporations have travel policies.

Even with the support of senior management, the path to savings is stony – only every third company has successfully implemented an internal program that will help reduce travel costs, and the countless aspects of travel are so overwhelming that most companies do not do it 39; I don't know where to start. "The travel industry is based on information," says Steven R. Schoen, founder and CEO of The Global Group Inc. "Until the passenger actually set foot on the plane, they bought (only) Information."

If this is the case, information technology seems like a real place to collect these elusive, but highly sought after savings. "Technological innovations in the business travel industry allow companies to use the potential of automation in controlling and reducing indirect costs (travel)," says Roger H. Ballou, president of the Travel Services Group USA at American Express. "In addition, many companies are joining quality programs that include sophisticated process improvement and modernization work to significantly improve T&E management processes and reduce indirect costs."

When companies look for technology to make potential savings a reality, they can be very creative in the methods they use.

A great leveler

Centralized booking systems have long been the exclusive domain of travel agencies and other industry professionals. Everything changed, however, in November 1992, when the Transport Department ruling allowed universal access to systems such as Apollo and SABER. Travel management software such as TripPower and TravelNet immediately popped up, providing corporations with insight into where their dollars are being spent.

The software tracks spending trends by connecting to the corporate database and providing access to centralized booking systems that provide instant booking information for airlines, hotels and car rentals. These programs also allow users to generate computerized travel reports on cost savings, containing detailed information about where discounts were obtained, hotel and car use, and inter-city travel patterns. Real data gives corporations an additional leverage when negotiating rebates with travel service providers.

"With information, you don't have to go back to the square every time you decide to change agencies," says Mary Savovie Stephens, Travel Manager biotech giant Chiron Corp.

Sybase Inc., a client / server software leader with an annual T&E budget of over USD 15 million, agrees. "The software provides us with unprecedented insight into how employees spend money on travel, and better negotiating leverage with travel service providers," says Robert Lerner, director of Credit and Corporate Travel Services at Sybase Inc. ". We have better access to data, faster, in real-time environment, which is expected to bring us significant savings in the field of T&E. We now have control over our travel information and we no longer have to rely solely on agencies and airlines. "

The cost of this privilege depends on the size of the business. One-time purchases of travel management software can last from less than USD 100 to over USD 125,000. Some software vendors can accommodate smaller users by selling the software fragmentarily for $ 5 to $ 12 per booked trip, which is still significant savings compared to the industry $ 50 per transaction standard.

No more tickets

Traveling without paper documents is faster than ever in an office without documents, because both service providers and consumers work together to lower ticket prices for business travelers. Perhaps the most advanced achievement is the "no tickets" journey, which is tested by almost all major airlines.

In the meantime, travel agencies and travel agencies are experimenting with new technologies to enable travelers to book travel services via the Internet, email and unattended ticket kiosks. Best Western International, Hyatt Hotels and several other large hotel chains sell on the Internet. These services reduce the need for paper and offer better service as well as additional benefits such as increased efficiency, better tracking of travel costs and trends, and cost reduction.

Dennis Egolf, financial director of the Veterans Affairs Medical Center in Louisville, Ky., He realized that the decentralized location of the medical center, a quarter mile from the hospital, impedes performance. "We lost production time and things were lost," he says. "Each note had to be manually submitted for approval, and we needed seven different copies of each travel order." As a result, Egolf tried the commercially available paper reduction software package designed for the federal government.

The software allows the hospital to manage on-line travel, from tracking daily allowances and calculating expenses to generating cash advance forms and authorizing reimbursement coupons. The software also allows the hospital to keep current bills for travel expenses and the 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 was to manage paperless employee travel," he says. "We achieved this goal, partly due to the efforts of the staff and partly due to the accuracy of the software."

With an investment of only $ 6,000, the hospital saved $ 70 on employee travel and saved almost half of its $ 200,000 in research and development budget through a paper reduction program.

There

The consolidation of business travel organization by fewer agencies has been a growing trend since 1982. Almost three out of four companies are currently planning business travel through one agency, as opposed to 51 percent in 1988. The two main advantages of agency consolidation are: facilitating accounting and budgeting for T&E, and leverage in negotiating future tourist discounts.

The main technological progress that allows this consolidation trend to flourish is the introduction of satellite ticket printers (STPs). Using the services of STP enables travel agencies to consolidate all operations in a home office and send all necessary tickets to various locations instantly via various wire services. As the term suggests, the machine prints airline tickets on site immediately, eliminating delivery costs.

For London Fog, STPs are a blessing. The London Fog T&E annual budget of over $ 15 million is evenly split between its two locations in Eldersburg, Md. And New York. Each location buys the same number of tickets, so you need equal access to tickets at their agency. With STP in its two locations, the company serves both offices with one agency in Baltimore. Each office has direct access to the tickets and continue to save without paying the courier and express consignments, which can be up to $ 15 for each of the more than 500 ticket purchase each year.

Conde Nast Publications & # 39; T&E's annual budget of over USD 20 million is allocated among its locations in Los Angeles, San Francisco, Chicago, New York and Detroit. Since 1994, the organization of travel was handled by the centralized agency Advanced Travel Management in New York, installing STP in each of these five locations. In addition to the increased efficiency due to consolidation, Conde Nast now has the ability to immediately change travel plans and immediately have new tickets.

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

Because average flight costs amount to 43 percent of the company's T&E expenses, the savings that can be made by various technology applications have become dramatic. For example, the ability of a corporation to collect and analyze its own travel trends has led to the creation of a net purchase tariff – price negotiation between the corporation and the airline for the purchase of tickets, which does not include additional commission costs, substitutions, transaction fees, agency transaction fees and other discounts.

Although most of the major US carriers publicly announces that he will not negotiate corporate discounts below published market prices, American Express survey on business travel management showed that 38 percent of US companies had already implemented or access negotiated discounts for airlines. The availability and mechanics of these solutions vary considerably from carrier to carrier.

What is the price?

Fred Swaffer, Transport Manager at Hewlett-Packard and a strong supporter of the net pricing system, was a pioneer in the concept of fee-based price lists in travel management companies based on an agreement with HP. He says that HP, which spends more than 528 million US dollars a year on T & E plans that all air travel will be based on net prices. "We currently have several net tariffs at various stages of the contract," he says. "These tariffs are negotiated with airlines at the corporate level and then flows into each of our seven geographic regions."

Frank Kent, the West Regional Manager of United Airlines, admits: "United Airlines participates in discounting corporate volumes, such as buying mass tickets, but not at net prices. I have not seen another tariff agreement that makes sense to us. "# 39; we don't oppose it, but we just don't understand it now. "

Kent emphasizes: "Airlines should address corporations with long-term strategic relationships, not just discounts. We would like us to be involved in the activities of the corporation, and not just involved in it. "

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

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