In September, eight months after acquiring online booking tool Cliqbook, expense solution provider Concur Technologies launched its integrated booking and expense tool. Business Travel News editor Michael B. Baker last month spoke to Concur CEO Steve Singh about the status of the new offering and its potential impact on the expense reporting market.
BTN: Where does your integrated tool stand in signing customers?
Steve Singh: If you look at the number of customers that are buying into the end-to-end travel and expense edition, it has far exceeded any of our expectations. We actually just finished our September quarter, and we have not yet announced our results, so I can speak only to public information released as of June 30. Up to that point, we saw about 20 existing expense customers—customers like ADP, Wachovia, Acuity Brands—who wanted also to integrate the Cliqbook travel service into the Concur expense service, looking for a complete end-to-end service offering. We also saw our first two new customers come on who bought the whole travel and expense suite. General Dynamics and Genzyme were the first customers who bought the integrated suite.
BTN: Has corporate interest in the tool held steady?
Singh: We've seen no change in that trend. In fact, we actually see that the customer trend for end-to-end travel and expense services increasing. While I can't speak to specific September quarterly results, I'm comfortable making that statement.
BTN: What sort of customer feedback have you heard?
Singh: The feedback has been, not surprisingly, very solid and very favorable. What we're finding is that the integrated service is beneficial to both sides of the equation. It's beneficial to the back office, where the major distribution for travel and expense integration can be managed. Just as importantly, it's a very beneficial service to the end employee. The click that books is the same click that files the expense report. What that does is dramatically reduce the amount of time it takes to file an expense report. The added benefit we've seen is that the adoption rates for our booking products increase. Typical adoption rates for online booking tools are about 25 percent, and we're seeing that adoption rate grow substantively.
BTN: Some have questioned the strategy of buying a booking tool for integration purposes, and demand for the product, saying it's better for customers to have their choice of booking tool if they favor integration, rather than be tied to a specific tool.
Singh: At every turn, when innovators really continue to set the bar in the industry, you hear everyone else discounting the innovation. Part of it clearly is that those companies, frankly, have missed the turn. This really is very similar to what we saw in 2000, when we saw the customer demand move away from licensed software to on-demand software. We had competitors back then who fundamentally didn't believe that on-demand is where customers were headed. Fast-forward six years. In 2006, it's 100 percent clear that on-demand is the only vehicle in which expense management services are being delivered. We're seeing the same thing happen here with the move to integrated travel and expense services. Today, most of our competitors look at it and say, "Boy, that doesn't make sense," or, "We'll deliver it though integration with third-party services." At the end of the day, delivering end-to-end integration in a value equation that is compelling is what we're doing and what our customers are responding to.
BTN: What do the results of this summer's Concur-sponsored Aberdeen Group study of 296 companies—which showed 19 percent already are using an integrated solution, and an additional 26 percent plan to adopt one within the next two years—say as far as demand for this ability?
Singh: Obviously, it's one thing for vendors to talk about trends, but if you look at independent sources like Aberdeen or PayStream Advisors, both reports show a core trend. Aberdeen expects by fiscal 2008 that nearly 50 percent of all corporations will have deployed end-to-end travel and expense services. Go back four or five years, and the idea of an integrated travel and expense service wouldn't even have been contemplated as a reality. Today, not only is it happening, but customers themselves expect to deploy these services in large quantities. That's a very significant data point in and of itself. The other data point that comes out of both reports is that customers are looking to have true independence in their travel supply chain. Customers are starting to treat travel procurement the same way they treat procurement of any other business service. The travel/procurement ecosystem in the supply chain has, for the parts included in it, the travel suppliers like airlines, hotels and car rental companies, the TMCs, the credit card companies and the technology providers. Companies like Dell are great examples of companies that have taken that travel supply chain, broken it down to the corporate components and then used traditional procurement expertise and methodology to drive the best value to each of those components, that delivers the best services to their employees and the best services to their shareholders. That's what we're seeing in independent research, that's what we're seeing in our customer cycle, and that's what we expect our industry to continue to see.
BTN: What impact will this launch have on the expense management landscape?
Singh: In my view, this will drive more consolidation in the expense space and drive more consolidation in the travel booking space. Fundamentally, it will change the way it's viewed and change the value equation to customers, and our competitors will have to respond to that.
BTN: Does this tool have interoperability outside of expense and booking areas?
Singh: We interoperate with all the ERP environments, all the HR systems, all the data processing systems and all the payroll systems that are out there. The interoperability between travel and expense is really where the value is created. Being able to have a single data source for all your travel and all your expense information, that's pretty compelling. That integrated service provides great value to the customer, but it doesn't at all take away from the fact that we will continue to cooperate and coexist with all the core systems implanted in our customers' organizations.
BTN: With the tool on the market, what's the next area of focus for Concur?
Singh: We will continue to raise the bar on the third leg of this, which is critical, and that's analytics. We think the ability to have an analytics service that holistically looks at both the itinerary data and the expense data and to be able to look at all your travel information from one location, from one dashboard, is critical. That's the next wave.