By: David J. Wardell

© 1991 By: David J. Wardell.  Reproduction or redistribution in any form without written permission is strictly prohibited.

With consumer confidence at a 10-year low, agents and others selling to them are already feeling pressure to cut expenses.

Computers, technology and the people who run them are obvious targets. But the simple truth is that travel agency competition in the 1990s is defined by technology. This applies to the largest and the smallest of agencies.

Even without the significant technology investments that are beyond the reach of small agencies, the right set of tools must be available to effectively meet customer needs when a potentially better-equipped competitor is nearby.

The best of the large agencies have recognized that information is a critical internal management tool and an invaluable service differentiator, and that information-based management is a product in itself.

The need to compete in a technology-based market will not diminish just because writing the checks becomes an issue.

A wholesale moratorium on technology spending would only ensure that you’ll fall further behind.

Here are a few ideas for intelligent cuts that will achieve genuine cost-containment, yet still leave you in the technology game:

• People should be the last to go, as technology specialists and well-trained experts are most difficult to replace. Cut programs, hardware and supplies before you eliminate staff.
  
• When retail goods go on sale, even during bad times, you buy more. Occasionally, job skills also go "on sale" as your competitors let their highly-trained staffs go. You may find some extraordinary people looking for work that you should hire if you have the financial ability.
  
• System upgrades can often be rescheduled. Rarely is any hardware or software product so "on the edge" that the newest version just has to be rolled in right now, particularly if business is down and volume constraints less severe.
  
• Don’t buy anything for which the immediate use and benefit is not clear. You should have a technology strategy and budget in place to meet the needs of your business.
  
• Don’t stop buying technology products you need to support that business, but also don’t deviate from your strategy because of the latest gadget.
  
• Focus on supplies and support services. Fax and other telecommunication charges, needless overnight courier fees, wasted paper and other supplies are probably more controllable and more significant than most parts of your technology budget.
  
• Encourage competitive bidding. You’ll be amazed at how prices come down on everything.
  
• Buy smarter. Software discounters are everywhere and, if you’re still paying retail, you’re definitely being taken.
  
• Consider cheaper products. Most word processors sell around $250 at a discount, but practical, usable programs for most, but not all, typical office word processing can be had for less than $20.
  
• Sell unused equipment. Sometimes renting out old hardware is more profitable, as computers depreciate fast.

Your employees are an excellent market for both sales and rentals, particularly PCs.

Watching pennies is particularly important in a sales slump, but successful agents will keep doing the right things despite passing difficulties.