Indian Cos missing out on travel and entertainment savings: Amex Study
21 April 2008
New Delhi: The rapid revenue growth witnessed by Indian companies over the last decade has been matched by a corresponding increase in business related travel expenditure. However, that has also yielded significant opportunities for Indian companies to leverage this increased spend to negotiate improved discounts with key suppliers, says a survey conducted by American Express Consulting.
American Express Consulting specialise in the development and implementation of Expense Management strategies designed to help Commercial Card customers drive T&E savings. With more than 25 years of global consulting experience, American Express Consulting delivers customised solutions designed to achieve procurement savings and to streamline back office process savings.
''The survey demonstrates two important themes'', said Firdaus Mogul, head of American Express commercial card for India. ''Firstly, the expense management strategies of Indian companies have evolved significantly since 2001, with business leaders increasingly recognising the importance of controlling their travel and entertainment (T&E) expense. Secondly, this evolution needs to continue further if Indian companies are to match the savings generated by their global peers''.
The report surveyed 114 companies across India, the responses of whom were then benchmarked against strategies employed by corporations in the United States and Europe to evaluate performance versus global best practice.
During the survey, 74 per cent of Indian respondents indicated that their T&E spend had now increased to more than Rs1 crore annually, compared to an average of Rs17 lakhs in 2001. This trend looks set to continue, with 91 per cent of Indian companies forecasting increasing T&E expenses in 2008, with half forecasting increases in excess of 25 per cent.
''High levels of T&E expense are a relatively new phenomenon in India and Indian companies have yet to fully exploit the significant economies of scale available through consolidated bargaining with key suppliers'', says Prashant Aggarwal, Head of American Express Consulting, Japan and Asia Pacific.