With the cost of Canadian work-related travel soaring to $60 billion annually, executives are banking on Web technology to bump budgets back to economy seating, according to a recent survey.
A poll of 180 finance and purchasing executives found that just under half reported a rise in work-related travel costs over the past six months. American Express Canada Inc., which conducted the study, says travel often represents a company’s single largest expense.
In response, nearly two-thirds of respondents said they plan to shop for online travel booking systems or electronic expense reporting packages over the next 12 months.
In a prepared statement, Herve Sedky, vice-president of American Express corporate services, said companies can trim as much as 15 to 20 per cent of their total travel costs by “getting serious” about technology.
Such systems allow employees to book travel plans through pre-approved suppliers, often with price caps set by employers, according to American Express, which itself offers travel and expense management services. They’re also designed to help reduce the time and effort involved in pushing paperwork.
Although they’re quick to recognize the overhead associated with travel, American Express found executives are still cautious when it comes to buying technology, mainly due to concerns over costs, security issues and an overall lack of comfort with automation.
Lorne Schwarz, CEO of Acceleron Inc., a Montreal-based supplier of travel expense management software with a customer roster that includes Proctor & Gamble, Bayer and Honda, said interest in his company’s flagship Boomerang product is growing. “The pipeline is filling up big time,” he said. “The problem we’re seeing is . . . it’s taking longer and longer for companies to make their decision.”
Schwarz said organizations could trim up to 50 per cent of their current travel budgets when they automate the process.
“It’s a great idea. It’s simple. It’s just getting people to do it,” said Andrew Goloboy, research manager with Framingham, Mass.-based analyst firm IDC. Goloboy said many larger vendors, including Ariba and Siebel, have opted not to stress their travel and expense management packages, leaving the market open to smaller, standalone players.
“But there’s a lot of software indigestion out there,” he added, referring to the growing queue of software often awaiting installation at many companies, which could explain why adoption is sluggish.
Goloboy said automation works well on paper, but can lead to a “process bottleneck” in the workplace as employees struggle to get what they need while adhering to corporate parameters and at the same time dealing with issues such as remote access and operating system upgrades.
American Express Canada Inc. in Markham, Ont. is at http://www.americanexpress.com/canada. IDC Canada in Toronto is at http://www.idccanada.com. Acceleron Inc. in Montreal is at http://www.acceleron.com.