Case Memo - Organizational Initiative to Reduce Cost

Topics: Trip, Expense, Videoconferencing Pages: 3 (756 words) Published: January 6, 2013
As part of our organizational initiative to reduce cost, I reviewed the financial accounts of the organization for the last 7 quarters. The single biggest offender of our budget has been corporate travel, accounting for more than 20% of the organizational expenses today. Therefore, I recommend implementation of restrictions to the travel policy as the best option to reduce organizational cost. Detailed analysis of the travel expenses for the last 7 quarters revealed the following key statistics that laid the basis for my proposal: 1)82% of the travel was for attending internal company meetings (not customer meetings) 2)40% of these meetings were just scheduled for a couple of hours. a.To elaborate, the meeting time was about 2 hours, but the employee’s travel time (time in flight) accounted for more than 5 hours on an average b.In some cases, employees flew in the previous day, so as to attend early morning meetings, adding more travel cost for hotel accommodation and food 3)54% of the travel reservations were made in the week of travel, causing the fares to be significantly higher, as compared to when tickets are booked in advance.

Internal headings would help guide the reader. Last month, I shared the above statistics with two director teams who had the highest travel costs in our organization. I sought their co-operation to try the video conference facilities that are available in most of our major office locations, in lieu of travelling to attend meetings in person. Both the teams tried it out for a month and are extremely happy with the outcome. Video conferencing worked just as effectively as face to face meetings . They were also amazed at the increased productivity they witnessed in their teams during that month. They could now effectively use the time, which was previously lost in cars, airports and planes, to complete their work and even had more free time to spend with their families. Two teams avoiding travel for internal meetings,...
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