Even as U.S. regulators review Geac's Extensity acquisition, Geac is initiating cost-cutting measures to absorb Extensity and gearing up for combat with Concur.
"We will not be bashful about competing head to head" with Concur, said Jim Travers, the recently appointed president and general manager of the Americas. With only two months under his belt, Travers already has begun cutting administrative costs and employee overlap. Travers said Geac will "rightsize" Extensity, yet he hopes to keep the entire senior team, including Extensity CEO Bob Spinner. Once aligned, the Extensity piece of Geac will report to Travers.
While the plans for integration are underway, Geac and Extensity continue to act as separate entities and continue to secure new clients. Geac already has procured at least three clients since the agreement and Extensity this month landed large contracts with The Coca-Cola Co. and Science Applications International Corp.
Coca-Cola last week announced its selection of Extensity software and this year plans to roll out expense reporting, travel planning and reimbursement applications throughout its North American divisions.
SAIC, the San Diego-based research and engineering company, this month signed a $1.8 million contract with Extensity, whose software will replace the paper expense reporting system used at SAIC. After looking at Captura and Concur expense reporting products, SAIC went with Extensity, due, in part, to its recent alliance with Geac, according to Joe Preimesberger, SAIC vice president and director of corporate travel. "Geac buying Extensity actually helped our concerns about their financial position," he said, "although we've always found that Extensity has always had a better financial position of the three."
Geac in August decided to acquire Extensity
(BTN, Sept. 9) after an examination of top players in the expense management market. Consulting firm McKinsey & Co., which was hired to render strategic research, found that clients highly ranked two functions—expense management and time and attendance—which are Extensity applications. "When we put this vision together, we looked at every product, including the companies based in Seattle, and we believed this was the best product for us," Travers said, referring to the recently combined Concur and Captura
(BTN, Aug. 12). "We think we can invest a whole lot more in this space."
Of Extensity's more than 100 clients, about half do business with Geac, which works primarily with larger companies at the enterprise level or firms with more than 1,000 employees. "Extensity's customer base mapped nicely with ours," Travers said. Geac plans to merge Extensity's expense reporting product into Geac's Total Finance Management model, a suite of integrated software that in addition to expense management includes other areas of the financial supply chain: revenue management, performance management and portfolio management.
Geac will build off of Extensity 6.0, its latest version that was released in June. About 20 percent of Extensity's current clientele has moved to 6.0 and all new Geac customers will go forward with it. "We're in the midst of integration discussions, so teams were formed and we're looking at products, people and organizations," said Elizabeth Ireland, Extensity vice president of marketing. "Geac has made such a strong commitment to making Extensity the platform for which they build growth applications."
While Geac no longer has its eye on acquiring other expense management firms, Travers said it could make another acquisition within performance management in six to eight months.
Meanwhile, Extensity recently has announced its integration with ImageTag's KwikTag product. KwikTag allows travelers to use fax machines to send and scan receipts for digital storage and retrieval. Extensity said the integration will speed receipt processing, yielding an estimated $10-per-report aggregate savings by cutting out shipping and other paper management costs. "This is unique in that it really enables a remote field office to automatically manage these receipts," Ireland said.
Concur in May rolled out a comparable receipt submission process, addressing similar concerns of ROI, time saving and increased control over receipt management. "There are three components to ROI. There's mailing, there's storage, but the largest component would be the audit process and the savings associated with that," said Chris Juneau, Concur senior director of product management.
While both companies said their products offer increased ROI, consultant David Hillman of Hillman & Associates said the new process is among several efficient options for collecting or imaging receipts.