Corporate-card programs can also help improve travel-agency efficiency; agents can track information more easily and make travel arrangements more swiftly. At Siemens an automatic data feed with recent updates is sent to its travel agency every week. "This has helped lower our transaction fees with the agencies significantly," says Murphy.
Policy Becomes Part of the Programming
Another strategy for centralizing a travel program and enforcing its policies is the use of an online booking tool. Although this technology is only just beginning to catch on, usage is expected to rise to 20 percent of firms in 2003 from just 8 percent in 2000, according to research firm PhoCusWright.
Online booking tools can help companies reduce costs in several ways. First, they drive employees to follow travel policies and to use negotiated-price discounts for airlines, hotels, and rental cars, all of which can be programmed into the booking tool itself. In addition, online booking fees tend to be lower than agency fees, reducing administrative costs significantly. Online fees are usually about $5 to $10 per booked trip, while an agent's can vary anywhere from $15 to $60. "On average, we see corporations save at least 10 to 15 percent on direct travel costs, such as airfare, and hotels," says Scott Gutz, CEO of e-Travel, an online booking tool provider.
Online booking technology can also help companies measure, monitor, and enforce compliance more consistently. To date, managers have relied largely on travel agencies to alert them to policy breaches. That method has been spotty at best, however, since non-compliant employees usually don't make arrangements through a company's preferred agent to begin with. Online tools, notes Gutz, allow managers to set approval levels and to be notified automatically when bookings do not comply with policy parameters.
The e-Travel online booking tool allows employees to plan, book, and purchase travel itineraries from their computer desktops. After logging in, employees enter their desired itineraries, which may include air travel, rail travel, car rentals, and hotel stays. The tool then presents the employee with options that are compliant with company policy. For example, if the company has a preferred airline or has set up a special rate with a particular hotel, the system can be configured so that these are the first options displayed to the employee — or perhaps the only options displayed. Other vendors offering online booking tools include Datalex, Highwire, Sabre, SAP, TRX, and WorldSpan.
"Our online booking tool has been a significant driver of efficiencies for us," reports U.S. Bank's Ayers. "We've been able to cut about $300,000 worth of booking expense out of our budget over the past 18 months just from using online booking." U.S. Bank achieved that saving even though four of ten reservations are still being booked using traditional methods. But now that 60 percent of U.S. Bank's travel is being booked online, the average cost of a booking transaction has dropped from $42 two years ago and is approaching $30 today. That adds up, notes Ayers, "when you're making 60,000 transactions per year."
Even at a company that has installed an online booking tool, occasions may arise where using a travel agent might be preferable — say, for booking a multi-leg international trip or for making a last-minute change. A company's travel policy should spell out, as precisely as possible, when employees may contact a travel agent and when they must make their arrangements through the booking tool.
Finally, whatever travel policy is put in place, measuring and monitoring policy effectiveness is crucial for maintaining cost reductions. Many companies, especially those that use corporate cards or online booking tools, have automated the T&E reporting process to stream data into a central repository. Some have developed their own scorecards to gauge everything from whether appropriate discounts were applied to whether travelers used preferred car-rental companies.
Third-party travel auditors can also be enlisted to measure compliance and program effectiveness, and to pinpoint areas where further efficiencies might be gained. Once Siemens had implemented its travel guidelines, says Murphy, managers wanted to measure whether the agencies were actually offering travelers the lowest possible airfares. In some instances, that was not the case, and travel managers were able to track and weed out those agencies that did not implement the policy consistently. Measuring compliance, adds Murphy, "also helped us train the agency to honor our policies."
Reader Comments» Post a comment