<B> GM Steers To One Vendor</B>
<I>Car Makers Automate Expense Reporting</I>
By Mary Ann McNulty
<I>Detroit</I> - Driving a new standard in corporate card deals, General Motors is consolidating $500 million of card spending--including travel and entertainment, purchasing, fleet and phone cards--as well as an automated expense reporting system with a single vendor, Citibank North America's e-Citi Group.
In doing so, GM becomes the last of the Big Three auto makers to pioneer expense process reengineering that other Blue Chips soon might emulate.
Each of the car companies is taking a separate road in automating expense reimbursement, but the destination is the same: to drive out unnecessary costs and boost profits. DaimlerChrysler is rolling out American Express's AXI online booking system integrated with Concur's XMS expense system to 3,000 employees, and plans to hit 8,000 by year-end. Last fall, Ford selected Captura Software's Employee Payables expense software to deploy to 61,000 employees in 80 countries around the globe over the next two years (<I>BTN,</I> Oct. 5, 1998). Like GM, it uses a Citibank corporate card, but on the Visa platform.
In an extensive overhaul of its expense management process that began more than two and a half years ago, General Motors is consolidating eight corporate charge cards used by more than 100,000 GM and Delphi employees in the United States, Canada and Mexico into a single, multifunctional card. In the United States, that will a MasterCard; in Canada and Mexico it will be Visa. The brand will be decided upon on a country-by-country basis, and may even be a Diners Club card.
If it reaps the benefits it expects, GM will take the solution global. To report and reconcile their purchases, employees will use Captura's software. By early 2000, employees will receive the new card for travel and entertainment, purchasing, fleet and telephone calls.
Unlike its peers in corporate America, GM has a mainframe-based travel data warehouse. Alfreada Sanders, project leader on the corporate card solution, said the reengineering project team expects to get much more data from the new system, and to use that data to better leverage its substantial buying power.
Bill Wimsatt, manager of accounting services in GM's Enterprise Activities Group, said the new system "simplifies business travel procedures for employees and offers them a faster turnaround in expense reimbursement; it saves the company a few million dollars a year; and it provides us with important financial information we can use to strengthen our leverage with suppliers."
Beyond the savings, the new system also will position GM for future electronic commerce growth, executives said.
GM's cross-functional project team calculates that the new process will offer a 93 percent cost reduction over the current paper-intensive ones and slash $3.7 million a year from GM's bottom line. The team--which included representatives from accounting, information systems, worldwide purchasing, treasury, tax, internal controls and fleet management--estimates the new system will process 612,000 expense summaries a year, Sanders said.
While $3.7 million might not sound like a lot for a company that just last week reported revenues of $46.4 billion, Ing Barring automobile industry analyst Maryann Keller said "the reality of the car business is that a million dollars is not an insignificant amount of money. They can ill afford to let any money get away. In this age of excess capacity, the cost-cutting mantra governs everything. It's something every one of these executives wakes up in the morning and thinks about."
In its RFP, issued last May to 12 financial institutions, GM asked for bids not only on a one-card, but also an integrated, automated expense reporting product. Each of the six bidding banks proposed its own automated expense software solution, with most opting to forge partnerships with expense vendors. American Express' proposal offered Concur's XMS system, while NationsBank teamed with IBM and First Chicago linked with VIN.net.
Not only did the expense system need to be intranet-based, but GM asked the winning bidder to host the Website, said Dana Bruttig, CEO and founder of Bothell, Wash.-based Captura Software. "The hosting movement is just starting, as companies don't want to bring anything within their walls in the next 12 to 18 months due to Y2K issues. They want it hosted."
All 30 of Captura's other corporate customers have put the software on their own servers, she said. To meet GM's requirements, Captura is negotiating with two large hosting companies--IBM Global Services and UUNet--to become its long-term partner.
At press time, GM, Captura, Citibank and implementation experts from both Deloitte & Touche and KPMG Peat Marwick were plotting the implementation strategy and customization needed for GM. A big part of the latter is expanding Employee Payables to allow users to reconcile not only travel expenses, but fleet, phone calls and any purchasing. GM also requires that employees apply for cards online and receive them within 24 hours of approval. The enhancements will become part of the base Employee Payables product that current and future customers will receive, Bruttig said.
GM has six people working full time on the corporate card implementation, according to Sanders, with many more being added as needed. "GM definitely believes that we're the ones who have to be out in the lead, telling the GM community about the new system and process," she said.
Captura will hire five to 10 full-time employees to implement its biggest account, Bruttig said. Citibank also has a dedicated team working on its largest account, but no spokesman was available for comment.
Bruttig said that it's technically true that GM is getting the software free; since the contract is between GM and Citibank, GM never actually wrote a check to Captura. "But are we being compensated with the largest amount of money we've ever received? Yes!" she noted. Beyond the bottom line, winning such a high-profile customer "raises the credibility of the company and technology beyond the midmarket. It gives us the beachhead into the whole one-card area and larger companies.