Enterprise-Wide Software Co's. Expand Into T&E

<B> Enterprise-Wide Software Co's. Expand Into T&E</B>

By Mary Ann McNulty

Automated expense reporting options continue to grow as three business-enterprise software leaders develop integrated solutions. PeopleSoft and Momentum Business Systems last month introduced their expense reporting product, while Ariba Technologies announced plans to debut a product in September as part of its new operating resource management solution. In a related twist, Extensity said it has secured venture capital financing to add ORM applications to its existing expense reporting software.

The trend toward expanded expense options isn't expected to end here, as enterprise solution firms continue to target this space.

The latest offerings are Web-based; include workflow functionality to route expense reports to approvers, accounting and auditing; and feature administrator modules that allow managers to set policy and per diems.

PeopleSoft, of Pleasanton, Calif., last month released its long-awaited PeopleSoft Expenses, a separate module within its 7.5 enterprise application suite. Like other PeopleSoft modules--human resources, financials and supply chain management--the Expenses module starts at $100,000, with the actual price determined by the number of employees and/or sales revenues of a corporation. More than 1,300 corporations and government entities use PeopleSoft applications to help manage data and resources.

PeopleSoft announced plans for its expense application in December 1996, (<I>BTN,</I> Dec. 16, 1996), but hadn't decided whether to build the entire product or call upon others to design the front end. "We ended up creating the entire module ourselves," said Nancy Bremer, product strategy manager for PeopleSoft. The product offers three different user interfaces, an online version, Web-client for use over an intranet and remote client option for those who dial into a network.

Although the product was designed to be integrated with other PeopleSoft applications, Bremer said, "people are using Expenses on its own. To our surprise, they're using it both with prior versions of software and with other financial packages."

At press time, more than 60 customers had ordered Expenses, Bremer said, with implementation expected to take from two to four months.

Meanwhile, Montreal-based Momentum Business Systems last month introduced Boomerang, a Web-enabled expense reporting solution for Lotus Notes/Domino users. The five-year-old groupware consulting firm specializes in developing sales force automation for the pharmaceutical industry, according to spokeswoman Tanja Gehring. Hearing the intensifying cries for solutions to the annoying expense reporting problem, consultants in 1997 developed a product for Asea Brown Boveri. In the first year, ABB saved more than $110,000 in labor costs and $50,000 in float by automating payments to several thousand employees.

Finding that many customers were requesting that Momentum build expense automation into other applications, the company decided to develop Boomerang as its first shrink-wrapped software, Gehring said. In late 1997, about 200 employees at Atlas Copco Compressors Inc., Holyoke, Mass., began using the product. At press time, two other corporations were scheduled to deploy the software to more than 1,000 employees each.

Unlike other products, Boomerang works only in Lotus Notes. It carries a price tag of $59 per user, plus $5,000 for the server portion of the package.

Ariba Technologies, a Sunnyvale, Calif., purveyor of resource management solutions, announced plans to deliver a T&E management system in September. Ariba has just eight customers: AMD, Cisco Systems, Octel Messaging of Lucent Technologies, Boehringer-Ingelheim, Chevron, Bristol-Myers Squibb, Federal Express and Visa. Its solutions run from $250,000 to several million dollars, said C.J. Glynn, manager of product marketing. The T&E module alone likely will start at $200,000.

"Our customers have told us that T&E is 10 percent to 30 percent of their operating resource spending, and therefore an important area for cost savings," said Dave Rome, vice president of marketing. ORM costs include all goods and services an organization needs to run its day-to-day business operations, such as office and industrial supplies, services, capital equipment and T&E. Consulting firm Killen and Associates estimates that a Global 2000 company can save 5 percent of its operating resource costs and increase profits by 28 percent by implementing an ORM solution.

Meanwhile, expense vendor Extensity announced last week that it secured $14 million in a second round of venture capital financing to build Java applications for the operational resource management market. Extensity released its Java-based expense reporting software earlier this year. The latest round of financing came from seven companies, led by Visa International and including Lehman Brothers, Kleiner Perkins Caufield & Byers, Hummer Winblad, Sumitomo Corp. of America, Techno-Ventures, and Weiss, Peck and Greer.

Besides travel expense management, Extensity defines ORM as purchasing of materials and labor. "Operational costs are all those related to running a business, not to producing goods and services," said an Extensity spokesman. Controllers are excited about ORM software, Extensity contends, because every dollar saved adds 66 cents to profits, according to a recent report in CFO magazine.