A year and a half since Mike Concannon took the general manager of the Americas post at KDS, the travel and expense management provider remains firm on partnering with travel management companies to acquire United States-based clients.
“We believe strongly in the partnership model in the U.S.,” Concannon told BTN during the Global Business Travel Association conference in July. “It’s been very successful in Europe and we think it can be very successful here.”
He added: “Our TMC partners have great relationships with customers, are very service-focused and we believe they can help us support those customers on a frontline basis.”
Since the start of 2014, KDS has partnered with TMCs Carlson Wagonlit Travel, Campbell Travel and Travel and Transport. And by the end of its fiscal year, ending in March 2016, Concannon said KDS plans to have 10 TMC partners.
KDS also
remains discerning about TMC partners. “We’re being very selective and I think we’re at a point in our growth where we can be very selective,” Concannon said. “We want them to be the right people culturally and to have similar business goals to us.”
It seems to be paying off. For the fiscal year ending March 31, 2015, North America accounted for about 18 percent of new customer revenue and is expected to represent
25 percent at the end of fiscal year 2016, KDS CEO Dean Forbes said during the company’s annual Paris conference in June. KDS recently signed geoscience company CGG as a global account, according to Concannon.
While some customers, like foreign education, language and au pair travel program provider
EF Education First, signed out of KDS’ Europe headquarters, Concannon said they’re considered U.S. clients because of their large U.S. presence. Still, the majority of their U.S. customers are acquired through the TMC partnerships.
“I consider [EF] a U.S. customer because we need to support them and make sure they’re succeeding,” Concannon said. “Then we have our direct customers like Shell that we’ve had from the past that we’re supporting and that was signed directly with us.”
Was KDS Ready For The U.S. Market?
Asked about rumors suggesting KDS’ U.S. product was not ready for the market, Concannon said KDS was “absolutely ready.”
“There was a lot to take into consideration when we came to the U.S. We knew about those things, but we’ve learned through our partners [other] things we need to address, fix and make better,” he added. “We’re addressing them quickly.”
Factors KDS was aware of before entering the U.S. market included such issues as not having direct connections with Southwest Airlines and Amtrak, but Concannon said such issues have been addressed. Some post-entrance issues included Department of Transportation requirements for listing airlines and TMC-specific
back-end modifications.
“U.S.-based travel management companies have specific formats and requirements for processing airline tickets [called] file finishing, that are different from the standard formats used in Europe, so we need to do some development to accommodate these needs,” he explained.
Consolidation Concerns
KDS entered the U.S. market at an interesting time—before IBM withdrew from the expense management sector and before SAP acquired Concur—which has presented KDS with some unexpected opportunities.
“The TMC and expense market was already looking for an alternative, even before the SAP-Concur announcement,” Concannon said. “It’s been even more emphasized due to that acquisition. People are unsure about where the market is going to go, so it’s opened up opportunities not just for KDS, but others.”
Expense firms like Deem and Expensify took advantage by offering their solutions
free of charge for a trial period to entice users to switch. Chrome River and Certify claim to have snagged several IBM GERS
client wins. Concannon said each of these solutions has its place.
“Our business model is about providing the best solutions for the global market … solutions that will make the tool better for everybody,” said Concannon. That means minimal customization for individual customers, he noted, but the core tool accommodates complex configurations.
To capitalize on expanding opportunities, KDS is growing its U.S. team and expects to have a team of six, including sales, marketing and customer service positions, by the end of August, according to Concannon.