An integration revolution appears to be underway within corporations anxious to eke out more value from millions of dollars in technology investments. A decade or more after companies first began implementing technologies for online booking, expense reporting, procurement, enterprise resource planning and accounts payable, they are increasingly linking those tools to one another.
Whether initiated by vendors or their corporate clients, the goals are to lower costs and gain more business intelligence to improve processes or contracts.
Within travel, the verbiage is "end-to-end." The definition of the last "end" varies from expense reporting to reimbursement and vendor settlement to management reporting, but each is designed to extend the value of disparate automation.
Among recent developments: Ariba announced plans to integrate its travel requisition and expense module with online booking engine KDS; Concur Technologies introduced its Travel and Expense with Smart Expense electronic receipts; and Rearden Commerce announced a new Open Expense Network to link expense reporting solutions to its online procurement tools. Last year, HRG announced a new portal that combines booking, expense and travel management, while Amadeus and SAP also furthered their integration.
Corporations also are taking on the challenge on their own, as evidenced by Bristol-Myers Squibb's integration plansand Siemens' integration of its travel bookingand reporting tools with its PeopleSoft employee hierarchy.
[PULL_1]Visa this summer introduced a new 43-page "Practical Guide to Commercial Card Integration with e-Procurement and ERP Applications." Visa commissioned Deloitte Consulting to analyze the integration processes, benefits and costs of 20 large and midsize companies that have integrated American Express, MasterCard or Visa corporate cards with Ariba, SAP or Oracle/PeopleSoft.
"The savings benefits cited ranged from $360,000 to $900,000 annually," based on an invoice receipt and approval process cost of $10 and check payment cost of $5, Deloitte consultants stated in the guide. The one-time costs for software and integration resources ranged from $150,000 to $1.3 million, and the integration took one to six months, Deloitte found. Savings resulted from more efficient and faster payment processes and increased rebates.
Regarding the introduction earlier this year of S2S product extensions into a procurement catalog, eInvoice&Pay and contract auditing, American Express senior vice president Brenda Blake said, "Our clients are looking to reduce costs, drive efficiencies and transform their businesses across the source-to-settle process. Our clients really do want to find ways to become more efficient and transform their businesses to be best in class. They've implemented SAP and Ariba to automate the ordering part. Successful companies have been able to get millions of dollars of efficiency out of these systems, but they really want the next step. They want the paper out. Companies [understand]that they have both operational inefficiencies and financial inefficiencies in the supply chain. And they really want to fix them." Amex said it is integrating its S2S suite into the workflows of SAP, Oracle and Ariba.
Despite the investment in technologies, Aberdeen Group in a March e-payables report noted that "companies typically receive 80 percent of all invoices in a paper format and pay 65 percent of invoices using a paper check."
Procurement executives are among the first to acknowledge the need for more integration and automation, according to various studies. In "The CPO's Strategic Agenda," Aberdeen stated, "There is a technology void for procurement performance management. As much as technology helps the CPO with secondary goals of operational efficiencies, it has yet to deliver on the primary goal of 'booked' savings. Technologies for spend analysis, sourcing contract management and budgeting are all very helpful, but together or apart there is still a void ... Strategic partnerships that bring the best of procurement technology together with the best of [corporate performance management] will be an important step toward the ultimate solution." The Feb. 2007 report was underwritten by Ketera, e+, SAP and IQNavigator.