ICi Group

The ICI Group, which employs more than 33,000 people in 50 countries and has a sales turnover of more than US$9 billion and profit before tax of US$364 million, has reduced its cost per transaction by 50 per cent since it consolidated its global travel spend in 1999.

The company spends an estimated US$150 million on T&E.

Director of global procurement, Ms Lee Ann Murphy, said: “In 1988/89, we had multiple TMCs, suppliers and multiple contracts with them. Our travel spend was totally fragmented, there was no benefits of scale.”

The company went through a series of actions including conducting a global spend baseline analysis and using the data collected for supplier rationalisation and looking at its own internal effectiveness before coming up with a metrics-based performance management system and taking corrective action. It went through the exercise a few times until it felt it had the right strategy.

Ms Murphy said: “With the introduction of self-booking services, electronic expense reporting became available and it made it easier to manage compliance and take corrective action.”

The results have been valuable. Ms Murphy said the company now got the best deals, there had been a 20 per cent reduction in cost per mile since 2000, there was strategic management of expenses and a platform had been created that allowed for hotels to participate in online auctions in cities where the company had a big spend.

AMEX

American Express Business Travel’s (Amex) vice-president and general manager, China, Mr Yam Goh, believes China’s manufacturing industry will have the fastest adoption rate when it comes to managed corporate travel. “The business travel market is growing very fast. Companies are changing and adapting their T&E culture as they find themselves encountering competition and, as a result, a need to bring down their costs,” he said.

While the market is learning at a very fast rate and there is a huge spectrum of companies that are savvy in T&E management, many still do not see its importance.

Mr Goh said: “The TMC cost is only three per cent of the total travel cost, but instead of focusing on reducing the other 97 per cent, companies keep harping on the three per cent. Because of this, there is a predominance of cash usage for travel-related services.

“Our challenge as a TMC has been the sheer size of this market, the unusual regulatory environment, the market economics and finding the right human resources.

“We plan to make the China Business Travel Forum a yearly event in our calendar, because we feel as the market leader it is our responsibility to increase awareness of this (managed travel) in the business community and among the public. Everyone benefits when business travel grows and we need to move the market in the right direction.”