A prevailing tendency for growth in corporate Sales, General & Administrative, or SG&A, costs to outstrip revenue growth threatens to side track the railroad, trucking, freight services and shipping sub-segments of the Travel and Transportation industry. Fortunately, these transporters may follow the lead of the major and regional airlines, which have successfully faced similar challenges. While burdened with bankruptcies, the effects of 9/11, SARS and rising oil prices, the airlines have led the industry in strategic use of outsourcing as a mechanism to combat such challenges. The results are undeniably positive: the airlines successfully have curtailed the escalation of their operating and overhead costs.
This ISG white paper describes some of the key challenges that Travel and Transportation companies face and indicates some of the information technology outsourcing (ITO) and business process outsourcing (BPO) solutions to address these hurdles, specifically examining the momentum in the use and impact of third-party outsourcing in the industry to date.