Integration in Vogue

Larger corporations increasingly are integrating their expense management systems with travel booking tools while smaller and midsize companies still find it challenging to justify the cost of doing so, according to the 10th annual Business Travel News Expense Manager Survey.

Nearly half of all 164 respondents surveyed, 45 percent, indicated they had integrated their expense systems with online booking, an increase from the 34 percent reported in last year's survey. Another 6 percent said their organizations planned this year to integrate their systems.

[Please click here to view the digital edition of BTN's 2013 Expense Manager Survey, featuring all charted data, downloadable as a pdf.]

"More companies are asking for T&E expense integration," said Orbitz for Business vice president of products and strategy development Anne Marie Razza. "Corporations are interested in the data analytics possible as a result of having both a T&E system [and a booking tool]. When they're integrated, [companies] get access to that data faster than they would independently."

Beginning in this year's third quarter, Orbitz for Business and expense management firm Coupa plan to offer booking integration, enabling prepopulation of Coupa expense reports for mutual clients. ExpenseAnywhere, ExpenseWire and IBM Global Expense Reporting Solutions already integrate with Orbitz for Business.

The travel management company's clients already can apply their corporate policies to the Orbitz for Business online booking interface, thereby providing managers some level of proactive control over company spending at the point of sale, rather than reactively managing spending in the expense system after the money already has been spent.

But with an integrated system, Razza said managers are better equipped to find discrepancies and identify violations by comparing what is booked and what is actually expensed, and to more quickly take action. For example, a traveler might reserve a policy-compliant economy-class rental car, but violate policy at pick-up by upgrading to a midsize car. Normally, a manager might not notice the difference until after an employee submits the expense for reimbursement, if the manager catches the violation at all.   

"The nice thing about having T&E integrated is that the expense system can provide additional value by improved analytics," Razza said.

Coupa vice president of marketing Anthony Wessels said having integrated systems provides the visibility needed not only to manage expenses, but also to optimize spend by seeing savings opportunities.

"Now you're not just taking that $5 million [of spend] and signing your signature on an Excel spreadsheet and issuing checks against it," he said. "Now you're actually optimizing, looking at spend as a whole, taking the spend power you have and saving the company money."

Additionally, automatic prepopulation of expense reports made possible by such integration makes it easier and faster for employees to complete and submit expense reports and for managers to process them. Such streamlined processes generate more efficiencies and therefore savings, Wessels added.

Persistent Challenges

While organizations may understand the value of integrating systems, various obstacles can stymie implementation and adoption. According to BTN's survey, the necessary budget for booking and expense data integration was identified as a top challenge, with 54 percent of respondents rating it as a 4 or 5 on an ascending 5-point scale (in which 5 is considered the most challenging obstacle).

The second-most challenging factor, with 44 percent of respondents indicating a 4 or 5, is obtaining management support.

"It's imperative to have that top-level executive sponsorship," said John Tangredi, president of Insperity's Expense Management division.

Sempra Energy has about 2,500 travelers and annually spends about $9 million to $10 million in T&E. Nearly six years ago, the company launched a pilot program with one of its business units to integrate booking and expense through Concur. Sempra Energy travel services and charge card administrator Jessica Davis said the system works "great," has proven to be efficient and satisfies employees. The rest of the company uses Concur for travel booking and SAP for expense reporting.

But despite the positive experience, Sempra Energy will not roll out companywide a fully integrated system. Instead, the company will consider upgrading the SAP expense system and at least integrate credit card data.

"In such a large company it is really difficult to make changes to internal processes, so things tend not to change to avoid ruffling feathers," according to Davis. "The most important factor to a major corporate change is getting executive buy-in and support. If the information can come from the top down, it is much more effective. We would also have to get with multiple departments to make sure all goes well—IT, human resources, etc."

Concur vice president of global product management A.G. Lambert said the key to having a successful integrated program is a project team that includes representatives from both travel and expense departments, especially when different departments within the organization handle associated systems.

"If that's disconnected from what's happening with travel, there may be internal organizational reasons why people don't put that together," Lambert said.

SMBs Struggle

Given these and other challenges, implementing an integrated T&E program may be more possible at larger companies that have the budget and executive power to initiate change. Of all survey respondents who indicated their organizations have integrated booking and expense systems, about 54 percent have $12 million or more in U.S.-booked air spending.

The proportion of respondents who said their organizations had implemented an integrated solution decreased along with the size of travel spend. Of organizations with annual U.S.-booked air volumes between $500,000 and $2 million, about 34 percent indicated they had an integrated solution, while about 21 percent of respondents from organizations with less than $500,000 of such volume said they had an integrated solution.

Philipp Schloter, president and CEO of expense management company Abukai, said he has seen more booking and expense integration, most typically for Fortune 100 companies. Often, companies opt into integration as part of the latest system upgrade. Schloter said Abukai hasn't seen "a single request" for booking and expense integration among its small- and midsize clients.

"In smaller corporations, we've seen it go the opposite way," Schloter said. "They're saying, 'Book what you want ... and we'll expense it. We're just not going to bother with it.' "

Schloter said one reason companies choose not to integrate is based on who within an organization is tasked with overseeing such systems and processes. If it's IT, for example, the organization is more likely to adopt new tools.

Another reason relates to an organization's clout with travel suppliers. "The process to negotiate preferred rates with hotels, airlines and other travel suppliers can take a long time, and if [the company] doesn't have a lot of spend, it won't get the discount anyway," said Concur's Lambert. "Smaller companies are not seeing the savings of managing travel with expense, or are finding it too difficult, so they're not getting as much value out of the managed travel program in general."

Insperity's Tangredi also noted the trend toward smaller corporate airline discounts, as airlines have become more selective in deciding which clients get discount programs.

"That's the driver," he said. "Without the ability to leverage significant discounts, companies have begun to allow travelers the flexibility to find the best deal. This means going to multiple [booking] sites." That, of course, complicates attempts to integrate an expense system with bookings.

Tangredi added that some smaller companies may be moving away from reliance on travel management companies in order to avoid TMC fees. In some cases, they "are starting to see there's not much value in it," he said.

Verian senior product manager Ganesh Sundaresan said the expense system provider recognizes the value of booking-expense integration, but not many customers ask for it. Because of the low demand, Verian currently offers only some level of itinerary integration with Tripit—something used by all of four customers.

The Holy Grail

Howard Jaffe, procurement director of mobile marketing company Velti, said he's "desperate" for the "Holy Grail" of an integrated and global expense management solution, but with only 1,000 employees he finds it difficult to find a suitable option. Velti uses Coupa for expense management and an undisclosed company for booking travel. Employees currently must put a hold on travel bookings until they get an approval number to plug into the booking tool.

"Employees are going back and forth between the two tools," Jaffe said. "That's complicated, so they'll do anything to get around it, even plug in fake numbers [to get approval]. It's good people trying to get their job done."

Velti's search for a global solution is complicated because it would require multiple contracts with different providers in multiple countries, even if it were to hire one TMC, Jaffe said. Negotiating multiple contracts requires consultants, lawyers, time and money—for which many companies like Velti simply don't have the budget.

"It's the amount of travel you're doing that justifies getting the agreements in place," Jaffe explained. "But what if you're a company with less than 1,000 people and only have a few people in procurement? That's expensive. And the reason you're trying to do this is to get a good process in place, but one that saves money."

Concur's Lambert said companies can buy their travel booking solution two different ways. The first is to buy the solution directly from Concur and have a separate TMC contract, a solution favored by some large multinational companies, he said. Or, more commonly, a company will access the Concur booking tool as part of its contract with a TMC.

Lambert added that Concur is rethinking the definition of T&E in the context of its Open Booking project, so that regardless of how or where travelers make bookings, organizations still can capture data to determine what is booked versus actual spend, and to have a global view of T&E.

Tango Card founder and CEO David Leeds said the rewards and gift card software company, which started about four years ago, is "biting the bullet" and integrating travel and booking through Concur. The company has about 25 people and spends about $100,000 a year on travel.

"For us, even though we're small, the primary reason for doing it was to make sure we have a clear policy around how much people are spending and everyone knows what the policy is," Leeds said. "We think we're saving about $5,000 a year total."

Insperity's Tangredi said that while there is value to integrate expense and booking systems, the general mindset about expense reporting must change. Rather than collecting information after the money is spent, it should be about "reviewing, re-educating and retrying."

"The trend is trying to help customers do a better job of trying to control the spending up front, which is first about planning where you're going to spend money, how and why, and then protecting that money by having checks and balances before and when money is spent," Tangredi said. "But it will take a mind shift for companies to think about controlling expenses and not just reporting after the fact."

Embracing Mobile

Similarly, organizations may decide to evolve their views on mobile technology and begin embracing it more rapidly to keep up with traveler preferences and behaviors. According to BTN's survey, 24 percent of respondent organizations found mobile capabilities most important for the company (indicating 5 on an ascending 5-point scale), compared with the 43 percent of respondents who indicated it is of the highest importance for travelers.

Sempra Energy's Davis suggested the lack of mobile expense management adoption primarily is due to associated security concerns, including potential breaches or leaking of personal information. Some organizations that issue mobile phones to travelers block or disallow certain apps from being used on those devices, possibly including Concur's apps (which also include TripIt).

"I believe this is working against progress since these tools can be very helpful," Davis said. "If the employee would like to use the technology badly enough, they will find a way. [Mobile] is the inevitable direction of where we are heading in the future of T&E."

This report originally was published in the July 8, 2013, edition of Business Travel News.