GM RFP Drives For One-Card Solution

<B> GM RFP Drives For One-Card Solution</B>

By Lynn Woods

In a bold move, General Motors has issued a request for proposals for a new corporate credit card that calls for a single piece of plastic that not only combines T&E, purchasing, and fleet on one card, but also incorporates the company telephone card and integrated expense reporting.

The RFP falls into line with GM's goal of "identifying common processes and driving structural costs out of the processes," according to corporate travel manager Kevin Killen. "We're part of a shared-services organization."

While GM could not provide more details, pending its soon-to-be-announced decision of the bid winner, such a radical step from one of the nation's largest corporations is bound to have repercussions beyond its own charge and payment practices. In a nutshell, does the General Motors RFP herald a fundamental shift on the part of corporations from multiple-card programs to a single card solution that integrates the entire payment process?

In the short term, the answer is no, according to officials at leading card issuing companies. While the GM approach is an anomaly, it does point a finger toward the ultimate future direction of corporate credit cards. A one-card solution "is the future of payment systems," said Mike Eichner, marketing manager at Paymentech, formerly First USA Paymentech. "Combined payment platforms is where the development is going. It's about cost savings, information gathering and payment. It's a natural extension of the development of credit cards."

Added Patty Chouanard, vice president of product marketing at Phoenix-based Bank of America, "More and more people are asking about a one-card solution. It's where we were with the purchasing card two years ago: people were trying to understand it. Now they have the product."

Nancy Grim, vice president of corporate purchasing card marketing at American Express, was a bit more circumspect about one-card solutions, noting that the jury was still out on whether the integration of T&E and procurement functions would result in greater efficiences and cost savings at corporations. "When I talk to CFOs and CIOs, they're concerned with four things: cash-flow management, financial systems integration, desktop strategy, and globalization of their program," she said. "When they ask whether a one-card solution will help in terms of these four things, I say maybe, but it hasn't been proven yet."

So far, few companies are following the bold approach taken by GM. Rather, most travel managers are asking about a one-card solution as a possible alternative to standard RFPs requesting different cards for different functions. "The majority still separate the functions," said Chouanard, although she noted that she believed more and more companies eventually will move to "an RFP that's one page asking for a single card."

"A lot of RFPs are cautious," added Eichner. Travel managers "usually ask for one card for each function plus a one-card solution. They don't want to force themselves to choose one vendor through an RFP."

Besides an avalanche of interest all-in-one-cards and integrated expense reporting, bank executives said they're noticing greater sophistication on the part of travel managers about one-card solutions and integrated payment systems. "We no longer get questions about the general product," said Chouanard. Rather, travel managers "are more knowledgable about their purchasing and corporate cards. They're looking for us to solve their problems."

While a handful of corporate customers at Bank of America, Paymentech and GE Capital have gone to one card, in most cases these combine just two functions--T&E and purchasing, or T&E and fleet. Bank executives said implementation of one cards is being stalled not so much by technological concerns as it is by practical considerations: "The diversity of corporate cultures--not being ready to throw everything together--is more of a determining factor than fear of technology," said Eichner.

For example, the procurement and T&E functions are often managed by two different individuals, although Mitch Gross, vice president of marketing at GE Capital, noted a definite trend toward consolidation of the T&E and fleet functions. One-card solutions also can pose logistical problems that, while leading to efficiencies at the front end, might simultaneously create more work at the back end, added Gross. This is especially the case for hotels, in which "no system will know the difference between a charge for a room versus catering," he said.

Another potential problem with a combined T&E, purchasing and fleet card platform is a possible loss of some reporting capabilites. Systems that are solely geared for T&E may have enriched capacities, both in terms of speed of transaction and advanced querying, that aren't available in a combined product. These capabilities are not seen as expendable by many companies, he added. "We see a lot of interest in the richness of technology," Gross said, such as that offered in GE Capital's Synergy 2000 product, which has advanced database architecture designed for in-depth T&E reporting.

Chouanard added that problems with attaining level 2 and 3 data for procurement and fleet cards could raise questions about the adequacy of current packages to handle these processes as well as they do T&E. Purchasing programs in general, noted Grim at American Express, have not reached the levels of control and robustness most corporations have achieved with their T&E programs. "We all have a long road to travel toward trying to get control of savings" in procurement programs dealing with maintenance and repairs, temporary services, and office supplies, she said.

What's clearly a trend, said Gross, is the move toward shared services. "There's more interest in streamlining and consistency of process and leveraging the information than in one piece of plastic," he said. "People are looking for one integrated approach, one back-end process, one method of saving money."

That trend has caused the card issuers to offer integrated expense reporting, either through alliances with expense reporting software companies or by providing the function themselves. American Express has teamed its AXI booking product and corporate card data with Concur Technologies' (formerly Portable Software) Xpense Management Solution reporting package. Analyzing corporate needs, many clients say they want a one-card solution when in fact they want single adminstration, according to Amex. That's why Amex is offering consolidated reporting and a common front end to card administration for both the T&E and purchasing products.

Both GE Capital and Paymentech have formed alliances with Concur, Necho Systems and outsourcer Gelco Payment Systems. Paymentech also has agreements with Extensity and Captura Software, as does GE Capital with Vin.net. "Customers want to be sure two pieces work well together, such as prepopulation of reports, but they don't want them from one vendor," said Gross, adding that GE Capital works closely with its expense reporting partners to make sure customers' needs are met and redundancies are avoided by having, for example, joint account reviews.

Bank of America has chosen a different tactic and offers its own expense reporting product for T&E, procurement, and fleet.

"A lot of customers are asking for this," said Chouanard. "Some corporations like to have it all together, while others say they want expense reporting to be separate." While her company's strategy was not to provide data to another vendor, she said Bank of America might make an exception in some instances.