Expense management firm Concur Technologies last month acquired Outtask Inc., provider of booking tool Cliqbook and expense application Vinnet, spurring Concur to promise end-to-end travel management technology.
Concur—the most profitable pure-play expense reporting company with the largest client base—closed the transaction on Jan. 23, sealing its purchase of the privately held Outtask for up to $88 million. The merged companies boast a client base of more than 3,000.
Outtask for years sold its Vinnet and Cliqbook products as both stand-alone and integrated functions. Concur plans to build upon such integration efforts while maintaining the stand-alone offering.
As Concur looks to transition Outtask's expense users to its own application and fold a booking tool into what always had been a pure-play expense reporting company, the industry is reviving discussions of end-to-end travel technology tools.
At the least, Concur now will be able to offer a booking tool and match booking data with expense data—an end that already can be achieved through data aggregators for companies who use disparate technology providers, according to said David Hillman, a principal with Consulting Strategies LLC.
At the most, however, integration efforts coupled with plans for further functionality could legitimize a viable end-to-end travel management tool.
During the company's first-quarter earnings call, Concur CEO Steve Singh noted other components that eventually would comprise a broader end-to-end tool offered by Concur. The company said by the end of the year it would achieve some level of integration between Cliqbook and Concur's tool. "Over the course of the next several quarters, we will invest to integrate operations and services to be able to provide our customers a seamless set of services for the procurement of travel, expensing of travel, payment of travel and through our on-demand reporting services, analysis of travel spend," he said, adding "I think it's intuitively obvious for all of us that the procurement of corporate travel links directly to the expensing of corporate travel."
Rajeev Singh, Concur president and COO, said the company had been "watching the travel management space for years," with the notion of potentially purchasing an online booking tool. "Travel booking and travel management and expense reporting—it's undeniable there's a link between the two in terms of business process," he said, adding that both online booking and automated expense reporting have room to grow. "Both spaces are still nascent in terms of the number of companies that have adopted a solution and have really gone far with it," Singh said.
Such companies as Xerox Corp.
(BTN, Jan. 29, 2001), PNC Bank
(BTN, Oct. 27, 2003) and Sematech
(BTN, Jan. 17, 2005) have integrated tools to create their own versions of end-to-end technology, automating many functions from trip planning and booking to expense reporting. However, examples of successfully streamlined end-to-end systems are few and remain a holy grail of travel technology. Even the U.S. federal government's ongoing attempts to launch government-wide technologies that allow government agencies to seamlessly move from gaining travel approval and booking trips to filing travel vouchers have been plagued by delays, inefficiencies and funding problems
(BTN, July 18, 2005). In fact, Concur and several competitors years ago touted relationships to integrate with booking tools
(BTN, April 28, 2003), helping to resurrect the end-to-end discussion, but making little waves.
Yet, some industry watchers share Concur's optimism that it can pull off such a feat and bring end-to-end technology to a wider range of companies.
"For more than a decade we've been trying to get this end-to-end solution—or, really, it's an integrated solution—and I think they have taken a step with the talents and technology of both companies and probably have the greatest opportunity I've ever seen in the industry to get this done," said Corporate Solutions Group travel management consultant Bob Langsfeld.
Hillman added that whether the final product truly achieves end-to-end goals, there still is value in matching booked data with expense reporting data. "It's becoming more of interest, but not because of the traditional thinking of what end-to-end is—meaning one provider might be able to provide everything from the beginning to the end of the travel management process," he said. "What's becoming more interesting is the ability to take data from the booking, or front end of the process, and utilize it to compare and analyze the expense data at the back end of the process."
Hillman said that when Concur comes to market with an integrated tool, it most likely would catch the eye of small or midmarket companies that have yet to automate expense reporting or booking functions. "Everything else being equal, I don't see any reason why a large company that already has a booking tool and an expense tool would switch just for the purpose of integration," Hillman said.
As Concur begins integration efforts and seeks a timetable to move Vinnet users to Concur's expense tool, the company pledged support to Outtask's client base. While Rajeev Singh could not give a specific timeframe for migration of Outtask's Vinnet users, he said Concur is planning a "long-term support plan," of which details will be available at a later date.
Rajeev Singh also said that Concur would retain 65 of Outtask's 70-employee workforce, bringing Concur's headcount to more than 500. Former Outtask CEO Tom DePasquale will head the company's online booking and travel management unit as vice president and general manager of Concur Travel Management Services.
DePasquale could not be reached for comment, but said in a statement, "In combining market-leading technologies, Concur is embracing the opportunity to enable customers to further drive costs out of their businesses. The market will benefit from the best-in-class travel and expense solutions delivered through on-demand services. The Outtask team is excited to join forces with Concur to deliver excellent service and accelerated innovation to our combined customer base."
While Concur boasts the larger client base of the two companies, Outtask "serves hundreds of corporate customers" and is used in more than 50 countries and in nine languages. Prior to the acquisition, Concur and Outtask shared such large-market clients as DaimlerChrysler, Dell and Cingular.
Although this is Concur's first major purchase in years, the acquisition comes amid a shakeup in the corporate expense management industry.
Parsippany, N.J.-based software company CyberShift in late November acquired Toronto-based expense reporting provider Necho Systems for an undisclosed sum, only weeks following Golden Gate Capital's agreement to purchase Geac Computer Corp., the Canada-based software provider and acquirer of expense reporting company Extensity, which closed last month.
While continuing as a stand-alone application, Cybershift acquired Necho with integration in mind. Yet, unlike Concur, Cybershift's suite of other Web-based products, including time-, attendance-, labor- and other workforce-management software, has little utility for corporate travel managers.
Meanwhile, Extensity, since its 2002 acquisition by Geac, has been further integrated into the company and no longer offers a stand-alone expense tool.
As such, while all were purchased with integration in mind, Concur is differentiating itself with plans to integrate with travel functions—not other business applications.
The deal comes nearly four years after Concur made its last major purchase, when it took on Kirkland, Wash.-based expense competitor Captura Software for $2 million in cash, plus about 5.2 million Concur shares
(BTN, Aug. 12, 2002).Rajeev Singh said the transition process "served as a lesson along the way" for integrating a company and its software, and supporting its clients. Singh said that "the vast majority have migrated over" from Captura software to Concur's platform with strong retention rates.