Enterprise Vendors Target T&E

<B> Enterprise Vendors Target T&E</B>

By Mary Ann McNulty

Well-known enterprise resource planning system vendors Oracle, PeopleSoft and SAP are deploying travel applications--starting with expense management--as they plot ways to integrate end-to-end travel solutions into their products.

While they might be coming late to the travel technology party, few in the industry are questioning the impact they will have if they can offer intuitive, feature-packed products.

With one or more travel products already deployed, each is working on an end-to-end solution that takes full advantage of its integrated approach to corporate information management--and its huge existing client base in corporate offices worldwide.

In one of the industry's best-kept secrets, Oracle last spring debuted an automated expense reporting system as part of its Self-Service Web Applications, an add-on suite of three lines that focus on employees, customers or suppliers.

Although only 25 corporations are currently using Expenses, some only in pilots, Oracle executives anticipate a much faster adoption rate later this year as the majority of its 4,500 corporate customers migrate to version 10.7 of its applications software. Version 10.7 is Year 2000 compliant, Web-enabled and supports the European Monetary Union. Oracle's latest release, version 11, is entirely browser-based and won't support a client-server environment.

In developing Expenses, Oracle focused on two issues: reducing the cost to process expense reports and keeping employees informed about where expense reports are in the process. An intuitive design, requiring no training to use, was crucial, said John Wookey, vice president of financial applications.

Unlike most expense solutions, Web Expenses includes a calendar and fill-in-the-blank format to record receipts. Clicking on tabs allow users to toggle between views of expense reports. Other features include automatic currency conversion, fully integrated policy information, configurable fields for expense types, automatic tax calculation for receipts and approval routing via Oracle Workflow.

Most importantly, Web Expenses integrates with all other Oracle applications, including the new Business Intelligence System announced as part of version 11. Using BIS, companies can answer such tough business questions as why expenses are increasing in a specific region, who are their most efficient suppliers, and how much they can save by consolidating with the best suppliers.

Oracle plans a number of enhancements later this year, including the ability to take data feeds from charge card companies to prepopulate expense reports with charged data, said Rob Wald, product manager for Web Expenses.

PeopleSoft, based in Pleasanton, Calif., deployed its Expenses module in May (see story, page 22), but the vendor is working with customers to identify other needs.

As with its competitors, the development of PeopleSoft Expenses required a change in mindset. "It's more of an end-user product that requires ease of use," Bremer said, than one used by accounting or H.R. staffers within an organization who are specifically trained on the software.

SAP AG in September plans to release a pilot version of the travel planning tool it has co-developed with Amadeus. About a dozen SAP customers from around the globe, including one that is based in the United States, have been working with the Walldorf, Germany-based company on the project, said Klaus Fischer, SAP product manager for travel management. SAP has had a travel accounting product for the past 12 years with custom versions for 13 different countries, Fischer said.

To streamline its product offerings, SAP has moved the travel accounting sections from the human resources module to the financials.

This first version of a booking module offers users the ability to select air, car and hotel options and forward them to travel agencies for quality control and booking. But SAP executives have already begun to prioritize their customers' wish-list for the first enhancement, expected in late 1999. Topping the list: a truly automated environment in which the traveler completes the booking, the ability to book trains and an enhanced user interface.

In this first version of Travel Planning, companies can build policies and traveler preferences into the systems. Employees actually create passenger name records of their travel requests and forward them to the agency for ticketing. The trip data migrates to the accounting program or, if necessary, into human resources. Ten reports are included in the package and travel decision-makers have the ability to query the database to generate customer reports, Fischer said.

SAP and Amadeus began developing Travel Planner last September (<I>BTN,</I> Oct. 6, 1997), after agreeing to build a "competence centre" at SAP headquarters. "Six people from Amadeus are working with six people from SAP on this travel planning area," Fischer said.

Moving beyond their existing offerings, the enterprise system vendors acknowledge they have much bigger plans for travel applications.

"We're definitely looking at travel, at ways we can help our customers reduce their travel costs, as well as their travel management costs," said Nancy Bremer, product strategy manager for PeopleSoft.

At Oracle, Wald said, "Our mission is to not only attack the direct costs of T&E, but the indirect. How much does it cost to book a trip? How well can I control policy compliance? We know that policy compliance is where you begin to control T&E."

Appointed to his post two years ago, Wald said he's spent a considerable amount of time listening to Oracle's own travel manager, Val Cordell, as well as others. "What I'm hearing from travel manager customers is that they really want technology products, online booking integrating with expense reporting," Wald said. "They want open systems that will work with any agency, or CRS or multiple CRSs, and they want global solutions that can be region-specific, and provide support for the Euro. I think Oracle is best positioned to offer this kind of solution."

Wald also has heard the cry for a means to track unused tickets by linking expense reports to an itinerary. But to offer this, Web Expenses must be tightly integrated with an online booking system. Rather than build its own system, Oracle is looking to partner with an existing vendor. "We're talking to a number of vendors that we think are the best," Wookey said, who hopes to make a decision later this year.

Demand Reaches Critical Mass

While SAP's relationship with Amadeus has been good, the German software firm recognizes that it must develop interfaces to other GDSs if it is going to serve its global customer base, Fischer said. Although SAP customers have been demanding travel applications for years, the cries only recently reached a critical mass.

"My experience in the last seven years is that we will never have enough travel products" to satisfy customer demand, he said. To help prioritize their needs, SAP will hold its first larger user meeting with representatives from 10 to 15 companies at its German headquarters in September.

Corporations that have implemented enterprise systems throughout their entire enterprise are still in the minority, but analysts note that vendors make a compelling argument that their tightly integrated solutions can save time and money, and enhance data within a company. "One of the strengths of SAP is the integration," Fischer said. "It makes no sense to use our travel planning function without accounting."

In their latest versions of enterprise software, the three market leaders have emphasized that their products are designed for multinational deployment and support multiple currencies. PeopleSoft's Expenses is available in standard languages, multilingual and multi-currency. Support for the EMU, VAT and GST tracking and document sequencing are built into the product. Oracle's latest financials application comes in 29 languages and offers total EMU support and multi-currency reconciliation.

Noting that the adoption rate for enterprise-wide implementation is still pretty small, Giga Information Group analyst Jim Holincheck of Park Ridge, Ill., said expense vendors that don't add value beyond data capture and general ledger feeding should feel threatened by these developments. However, there is plenty of opportunity for third-party T&E expense providers to offer corporate card reconciliation, e-commerce initiatives and other value-adds that the enterprise system vendors might not include in their offerings.

Travel managers and consultants who have seen the enterprise vendors' first cracks at expense software warn that they're not as sophisticated as the mature stand-alone expense products. However, when corporations adopt an enterprise system, they naturally want all the components to work.

"If these people really are getting into it, we're going to have a radical change in this industry," said consultant Bob Langsfeld of Langsfeld Fazio & Associates, Incline Village, Nev. "It's the immediate access these people have to clients. Figuratively speaking, corporations will have no reason to look elsewhere," if enterprise vendors can deliver viable end-to-end travel products.

One of the other advantages that enterprise vendors have is very strong user groups. Large corporations that are making investments in enterprise resource planning systems must ensure that they are getting a return on investments, and consequently work closely with the vendors.

Everyone is interested in travel solutions, Wookey said. "But what percentage have created their own solutions by now? Given how this space is evolving, more than 50 percent are a very easy target market.