Reducing indirect costs in categories such as travel

Filed in archive Best practice on July 31, 2009

Business Process Outsourcing (BPO) of indirect value creating processes is now a common practice in many large companies. Outsourcing solution providers now do manage many processes for Fortune 500 companies including ticket reservation, travel management etc. However, some companies simply don't have enough volume to go for large outsourcing deals or probably not mature enough to take this jump. What they do is first focus on achieving efficieny in categories such as travel and expense management and then do outsourcing if it makes sense.

Aberdeen Group recently did a study of best practices vs. avergae market performance in this area: As you can see in the figure below, they have found out that some of the main reasons the T&E category is not as low as the best performers is that the employees simply are not aware of the policies, or the data is not visbile to the decision makers so that they can enjoy synergy opportunities.





Aberdeen identified as the reult of its study that best practices do basically two main things that differentiate them from others in this area: From one hand, they do automate the process of travel and expense management and from other hand, they do actively communicate the policies and processes related to this area to the employees. It is interesting to see that the best practice solutions to such challenges are not only technology based but also about people.