Numerous studies in recent years have indicated that the benefits of integrating corporate booking, payment and expense travel technologies include visibility, policy enforcement and spend management. While research continues to reveal that few companies enjoy those benefits, new technologies are hitting the market to smooth the way.
Nearly three-quarters of 127 finance executives surveyed recently by CFO Europe Research Services and Amadeus said "integrating travel management IT systems with the expense management system is very important to the overall mission of managing travel costs," but only 18 percent said this had been achieved.
Overall, almost 60 percent of the polled executives in Europe (50 percent of the total survey base), the United States (25 percent) and Asia (25 percent) said managing travel costs is very important, yet fewer than 40 percent said their own companies were managing them "well" or "very well."
The single view of travel is important, executives said, for budgeting, tracking spending by project or employee, negotiating supplier discounts, identifying unauthorized spending, advising businesses on ways to improve profitability and identifying or selecting suppliers.
[PULL_1]"The days of treating corporate travel and the resulting expense reporting as a series of disparate policies and processes, or simply as an expense management exercise, are dead," wrote Aberdeen Group analyst William Browning III in "Managing the T&E Lifecycle," published in September. The report details how best-in-class companies are using policies, centralized management and integrated technology to treat travel management as a lifecycle to lower costs. The Aberdeen study noted that among "average" companies, only 20 percent used an end-to-end travel and expense management system, while those it defined as "best-in-class" performers were twice as likely to do so.
Suppliers Unveil Tech Offerings
Seeking to boost visibility into spend and policy controls within travel and other procurement categories, payment vendors recently unveiled new technologies.
Toronto-based BMO Financial Group earlier this year announced it integrated its payment solutions suite with Ariba's Web-based tools to provide clients with better data and control of spending in a source-to-settle solution. Using the combined tools, clients can automate purchase orders, invoice reconciliation and the settlement process, initiate electronic payments, gain access to Ariba's 160,000 suppliers and better monitor and control contract creation and performance, according to BMO spend and payment solutions managing director Terry Wellesley. "While companies have always had to manage their spending, executives now more than ever see spend management as crucially important to business success," Wellesley stated.
That view was echoed by Dennis Bauer, American Express vice president of sales and marketing for B2B global payments, during a recent Institute of Supply Management webcast. Bauer pointed to a 2007 Aberdeen Group report that indicated 66 percent of more than 400 financial stakeholders reported pressure to improve key working capital metrics.
One way that Amex is helping its clients, Bauer said, is through a new buyer initiated payment tool. Some clients are using the service, he said, to pay approved supplier invoices faster through the Amex processing network--retaining the same 45-day cycle time that would normally exist "without having a supplier get a card number." A client pays Amex on its regular invoice cycle once the company authorizes that the buyer-initiated payment has been made to the merchant. Bauer said companies using such practices are scheduling payments within their enterprise resource planning or financial systems, but simply making faster supplier payments through the Amex relationship.
Atlanta-based SunTrust Banks Inc. created its own Enterprise Spend Platform, powered by Spendvision. Spendvision is an expense management platform used by its majority owner London-based Hogg Robinson Group, as well as Barclaycard. Developed for use in Australia, it is now used by a number of European companies.
SunTrust executives said they worked for months with Spendvision to customize the solution for its client base in the United States. Primarily in the southeast, SunTrust serves some national corporations with its treasury products.
ESP's five modules enable clients to manage statements, transactions, expenses, payables and requisitions. Through the base modules, corporate card administrators can create and change corporate structure, business rules, workflow and internal communications to cardholders. Policies can be integrated into each module to show employees what is allowed. The expense module provides detailed reporting of card and cash transactions against policies. It also allows managers to allocate approved expenditures to general ledger accounts and automate reimbursement.
"Enterprise Spend Platform will help business managers more efficiently and accurately manage company finances," stated SunTrust treasury and payment solutions executive vice president David Fuller, "as well as give them additional tools to audit, coach and monitor company and employee spending behavior."