AMERICAN EXPRESS LAUNCHES INDUSTRY FIRST BENCHMARKING SOLUTION FOR ANALYZING CORPORATE CARD SPENDING
New Solution Enables Companies to Compare Spending Against Industry Peers to Negotiate Better Vendor Deals and Maximize Savings
NEW YORK, April 13, 2005 -- Today American Express Global Corporate Services launched the industry's first dynamic Corporate Card based benchmarking solution for comparing corporate travel and entertainment (T&E) expenses. This new solution is initially being made available to approximately 150 of American Express's global and multinational corporate clients; together these companies represent over $30 Billion in T&E spend.
Global Card Benchmarking enables American Express clients to compare their actual T&E spend with aggregated data from their peers in the form of actionable business metrics. The first release provides airline and car rental spend for North America and Europe and hotel information worldwide. This self-service benchmarking analysis solution is part of the suite of American Express @ Work®, the Web-based account-servicing and reporting platform, and enables companies to:
• Identify and evaluate savings opportunities through peer group comparisons
• Track relevant business metrics to monitor and report T&E costs over time
• Improve forecasting accuracy and the budget planning process
• Validate travel policy and investment decisions
• Communicate T&E program performance more effectively
“Our new solution gives clients a way to compare their procurement effectiveness to other companies,” said Shane Berry, Vice President, Global Client Group, American Express Global Corporate Services. “By providing detailed information on T&E categories such as air, hotel and car rentals, we are enabling clients to negotiate the best possible deals with suppliers and maximize their program savings.”
World Class Performance Drivers
Implementing world-class cost cutting initiatives is only half the battle, successful travel expense managers also need to measure their performance. Benchmarks offer external validation of how travel expense management programs are really doing and a barometer to compare their performance levels and practices to other companies.
In the last few years procurement professionals have introduced scorecards to the travel industry for use as an internal metric to measure performance. Global Card Benchmarking allows clients to take that one step further and look beyond their own company to compare their expense management programs to what is actually happening out in the industry as a whole.
“We are the largest corporate card issuer and provider of corporate travel programs, our benchmarking data represents an impressive portfolio of global and multinational clients with worldwide expense management programs,” noted Berry. “We offer an extremely large sample size for companies to use as an indicator of how their programs are really doing in comparison to the rest of the industry. No other corporate card issuer has this capability.”
Critical Data Necessary to Make Better Decisions
Historically benchmarking has been done mostly on an ad-hoc basis either by a company or third-party vendor and the process was costly and extremely time consuming. Global Card Benchmarking provides a timely, consistent and cost effective way to assess the performance of expense management programs. This solution transforms static spend data into dynamic, relevant reports that identify and quantify T&E cost savings opportunities.
As travel management becomes more procurement driven, a disciplined approach is required to evaluate program effectiveness. Benchmarking provides external validation and delivers performance metrics necessary to measure success. The depth and breadth of information provided allows clients to model scenarios to predict how changes in supplier or travel policy might affect cost savings in the long run. It also demonstrates how a client's travel program compares to other companies so they can make better T&E purchasing and policy decisions.
“Our clients wanted some type of scorecard to help them evaluate the effectiveness of their T&E programs,” said Berry. “Now with external peer benchmarking they can evaluate and improve sourcing effectiveness, identify areas of potential savings, and provide comprehensive reports to senior executives to demonstrate program value and measure that performance against their peers.”
Knowledge is Negotiating Power
Benchmarking information is provided for air, hotel, car rental and general expense management metrics categories. The data can be segmented to reflect information for a particular peer group aggregated by industry, similar spending levels or other criteria. Information can also be broken out by geographic region or country, flexible time periods (year, quarter or month) and converted into over 200 currencies.
Global Card Benchmarking enables a company to view not only their fares but also aggregated peer fares for the same travel patterns. For example, a client can see the average fares paid by peer groups for travel between New York's JFK Airport and London's Heathrow Airport right down to carrier, class and fare type flown on that route.
Benchmarking Analytics
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Sample Scope |
Sample Metrics |
Air
Benchmarking |
Carrier, Class and Fare Type |
Average O&D Segment Cost,
Average Cost Per Mile |
| Hotel Benchmarking |
Hotel Property and Hotel City |
Average Transaction Amount, Average Spend per Property |
Car
Benchmarking |
City and Car Rental Vendor |
Average Daily Rental Car Rate, Average Rental Days |
Expense Management
Benchmarking |
Air, Hotel, Car Rental, Restaurant, Entertainment |
Average Transaction Size, Percentage of Spend by Industry Type |
“The travel industry is becoming more complex every day and companies want to go the extra mile to take control of T&E costs,” noted Berry. “By measuring their expense management programs against those of their peers, our clients not only gain a holistic picture of their spend, but also a better understanding of how to drive savings across a variety of T&E categories.”
About American Express Global Corporate Services
Through its Global Corporate Services group, American Express provides expense management services to more than 100,000 firms worldwide through its Corporate Card program, Corporate Purchasing Solutions and Business Travel Services. It is both the leading issuer of commercial cards and the largest corporate travel management company in the U.S., serving nearly 70 percent of the Fortune 500, along with tens of thousands of mid-sized companies. More information on expense management tools from Corporate Services can be found at http://www.americanexpress.com/corporateservices.
The American Express Company is a diversified worldwide travel, financial and network services company founded in 1850. It is a leader in charge and credit cards, Travelers Cheques, travel, financial planning, investment products, insurance and international banking.
Contacts:
Christine Levite
212.640.3382
Christine.Levite@aexp.com
Tracy Naylor
212.640.0647
Tracy.N.Naylor@aexp.com
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