<B> Amex Inks T&E Deal</B>
<I>Dumps Expense Manager In Integration Pact With Portable Software</I>
By Cheryl Rosen
<I>New York</I> - Nineteen ninety-eight--the year that many expect will be the one in which the corporate travel industry finally sees operational global end-to-end solutions--is off with a bang as American Express announced it will integrate its AXI booking system with Portable Software's Xpense Management Solution.
Signed last week, the development and distribution alliance will replace Amex's homegrown, e-mail based Expense Manager software in its suite of automated travel products with Portable's intranet-based expense reporting system. Portable will focus on software development and integration, while Amex focuses on marketing and cross-selling the travel technology products.
"This is not just the travel business any more--it's the technology business, and companies that win will be those that combine the two arenas," said Portable Software's president and CEO Steve Singh.
In deciding to abandon its two-year-old, internally developed Expense Manager, Amex becomes the latest mega agency to partner with a software developer on expense reporting. Last year, Carlson Wagonlit and Rosenbluth International ditched their homegrown expense reporting software in favor of partnerships with Captura Software. BTI Americas and Maritz have relationships with multiple expense reporting providers.
Amex's new partnership is its second co-development deal, joining an 18-month-old relationship with Microsoft Corp. for the AXI booking system. Like that deal, this one is being billed as an alliance of market leaders--American Express, the nation's largest corporate travel agency and charge-card provider, and Portable, whose XMS system is already in use by more than 200,000 travelers at 65 Fortune 1000 companies, more than every other vendor combined, according to Singh.
"We're not giving up on the ability to internally develop products," said Mike Mulligan, senior vice president and general manager for Amex's Corporate Services Interactive unit. "But we found that, much as with AXI, we could better meet our clients' needs across a number of platforms, especially the intranet platform, by partnering rather than developing a product."
Microsoft, while still an AXI partner, is "not directly involved" in the expense-reporting system, Mulligan said, and Amex "didn't really consider them" for this project, where the goal is "much more an enterprise software solution with a lot of integration to legacy systems" than a traditional software program.
While the relationship between the two companies is not exclusive, Mulligan said "we don't think we'll sign up a long list of vendors--and we don't anticipate that we'll do a lot to integrate other products. If our customers want to opt for another solution, that's certainly their perogative. But we are going to concentrate our attentions here in the immediate term."
The alliance with Portable gives Amex two things its corporate client base has been clamoring for: an intranet platform and a global product. The first versions of Expense Manager have been client-server, e-mail-based solutions. Although developers have been working on an Internet version, the product was still in beta test.
On the global side, Portable already has "customers in Belgium, in the U.K., in France, in the former Soviet Union," said Singh. "We have multi-currency and multi-language capabilities and, with the exception of Germany, tax issues already have been taken into account."
Mulligan said that 140 Amex clients have expressed interest in Expense Manager, though many have been waiting for either a global or an intranet version and only "a couple of handfuls" are fully deployed and installed. Amex plans to migrate these customers to the new offering.
Among the first companies to install both AXI and XMS will probably be Solutia Inc., the September 1997 spinoff of Monsanto Corp.'s chemical business, headquartered in St. Louis. "We've implemented all our domestic travelers on XMS, including about 3,000 frequent travelers in the U.S., and about 40 in Belgium, where we are doing a pilot with Monsanto," said Elliot Grissom, Solutia's director of accounts payable, travel and financial systems. "We also are looking at the potential of AXI, which is wrapping up its pilot project. We haven't signed a contract yet, but negotiations are moving forward and we plan to implement it in the first or second quarter. Right now we are running a Windows-based version, but we'd like to end up with a Web solution for reservations and expense reporting, and have the two tied together."
The point, Grisson said, "is to cut our costs and eliminate redundant systems, and to get the travel process down to a limited number of systems and people."
At Joseph Seagram & Sons in New York, the largest user of Expense Manager, global travel manager Earl Foster said he, too, has long been searching for a "single system we can use around the globe." Seagram has consolidated its expense reporting in three shared service centers, in the U.S., London and Hong Kong, but each region has a different technology solution. While Seagram has Expense Reporter "on every desktop and every laptop" in the U.S., travelers use a locally developed expense-reporting system in Europe and no system at all in Asia.
"I use Expense Manager and boy, it's nice," Foster said, noting that Seagram has cut its U.S.-based expense-report processing staff from 15 to 12 since installing the system. "But it's not global and I don't want to support three different products."
Despite the hours Seagram put into integrating Expense Manager with its internal systems, Foster said he now is "absolutely" interested in an intranet-based product that prepopulates expense reports automatically. Still, though, he is uncertain of what Amex's shift to the Portable system will mean to his company--which once before chose the market leader in travel software, and now sees that product being dropped.
"We don't know Portable yet, or what this change will mean to us," Foster said, though he noted that "American Express said they will help us minimize the impact" of converting from Expense Manager to XMS.
"We are going to look at whether Portable is the right solution for us, but also look at other products," he said.
Still, he agreed that a global product "is something I've wanted for Seagram," and that he "likes the idea of Amex concentrating on card services and letting someone in the software business handle the actual software development."
That's a sentiment Amex obviously shares. Its contribution to the new partnership is clearly "the field, where our people will be selling the product category," Mulligan said, while Portable, a Microsoft neighbor in Redmond, Wash., will devote a team of about 15 to product development and integration services.
Portable also will "work with American Express on developing products that link with other Amex services, and on some unique things for corporate card customers, like the ability to link with the corporate card and to prepopulate expense reports," Singh said.
"Everyone has been saying how all this travel technology will happen any day now, how all the technology is in place and the critical mass is finally being reached. Once that happens, the question becomes who do you go with--and the answer is the largest, most successful player in the category. Suppliers make that bet as well," Singh said. "Amex is the clear winner on the credit card side, and if you think about who's putting in the right process and partnering with the right partners and who's got the best likelihood to win in the booking space, it's American Express."
Amex studies show that the average company spends $36 per expense report and 5 percent of its total travel budget on expense processing--figures that have been slashed to $8 and 1.5 percent at "best in class" corporations using automated systems, Mulligan said.