Internet Service Touts Lower Cost Start-Up Options

<B> Internet Service Touts Lower Cost Start-Up Options</B>

By Mary Ann McNulty


Targeting corporations that are hesistant to make substantial investments of money and time in automated expense reporting, Sunnyvale, Calif.-based On the Go Software this month is launching an Internet subscription-based expense offering called ExpensAble.com.

The company also announced a partnership with Remedy Corp., a Mountain View., Calif.-based vendor of corporate "problem management software," to use its technology in Remedy ExpensAble @Work, the latest in an employee suite that includes new employee processing as well as purchasing.

Patterned after its successful off-the-shelf Quicken ExpensAble software, used by more than 1 million customers, ExpensAble.com is designed to offer corporations the customization that they need in a service bureau environment. ExpensAble-.com supports users working from several other platforms, including the just-announced Palm Computing and Windows CE devices, as well as the existing Quicken ExpensAble 98 versions and browsers compatible with Netscape or Internet Explorer.

This means that road warriors or remote users will be able to record expenses wherever they occur and file reports once they're connected again. The Palm Computing platform will be released in July.

ExpensAble.com integrates a company's travel policy and alerts users to policy exceptions as they enter their expenses. Once a completed report is submitted, it again is checked against policy. If violations occur, it is returned to the submitter. Otherwise, it is routed to the appropriate approvers, accounting reviewers and auditors, each of whom are notified via e-mail of pending reports. Once the report is approved, it is routed to accounting for audit and import into a company accounting system for reimbursement. To ease set up, On the Go includes a default best practices travel policy developed by Andersen Consulting.

Companies may use it as is, alter it slightly or completely overhaul it, said vice president of marketing Kim Wesselman. Each field can be controlled by a policy and hierarchy can be set by department or division.

The system also includes a full range of reports available on the Web site. On the Go uses Crystal Reports to create charts and graphs, and encourages corporations to export the data into their existing reporting packages as well.

ExpensAble.com was developed over 18 months by 29 engineers at a cost of more than $6 million, according to CEO Ken Grunzweig, the former president and CEO of the now-defunct TravelNet Inc., one of the earliest automated corporate booking systems.

"We built a complete Web solution for T&E with all the workflow, databases, a detached client, worldwide Web access, fully redundant data centers on the East Coast and West, designed to help our customers process all the midoffice and back office through the Internet," Grunzweig said. "For a $5 to $10 a month subscription (per user), corporations can automate worldwide, with no hardware, software or administration, and it costs less than a couple days of airport parking."

Although technically any size company can use its products, Wesselman said that ExpensAble.com is targeting the middle market, which she defined as companies with between $25 million and $500 million in annual revenues, or 25 to 1,000 travelers. Research indicates there are 50,000 midmarket companies and more than 2 million small businesses that could benefit from such software, Grunzweig added.

To promote its services, the company is offering free use of the standard product on its Web site.

Executives fully expect to reach $100 million in revenues in a few short years, Grunzweig said.

In a new report that is scheduled to be released soon, research group IDC of Framingham, Mass., estimated that the T&E software license and maintenance market totalled $72.9 million in 1998, and projected it will grow to $334 million by 2003, said Brian McDonough, IDC's research analyst for cross-industry applications.

On the Go really is focused on small to medium-size companies, where Extensity and other Web-based T&E applications are focused more on the large to midmarkets, McDonough said.

The online offering has been in beta with seven customers, including Leaders On Line, an Irvine, Calif., recruiting service for technology professionals that is part of the Heidrick & Struggles executive search firm.

Although the parent company has an expense reporting solution, Leaders On Line president and CEO Michael Arrigo said its Windows-based system is arduous at best, and he must fly employees to Chicago to learn how to use it.

Arrigo estimated that the company will save about $5,000 a year per traveler using ExpensAble.com, including all time spent entering, approving, auditing and reimbursing travel expenses. Leaders currently has 10 people who travel, though it's possible the company might use the software to submit expenses for recruiting candidates. "The potential there is very good, because they can just log onto the Web," he said.

Arrigo noted that he also sees "great potential for time and billing in the future." But the biggest benefit "is that people who are mobile workers can use this without being connected. A lot of people today want everything to be on the Web, but this offers the right balance between Windows and Web."

On the Go was founded in 1997, when its founders purchased part of the company from Intuit. Intuit had purchased an expense startup in the early '90s and relaunched its product as ExpensAble. Today, On the Go is "a well-funded company," Grunzweig said, with financing provided by Alpine Technology Ventures, Edgewater Investors, Remedy Corp. and Intuit.

At press time, the company was closing a $15 million round of financing, bringing the total venture capital raised in two rounds to $19 million. As with most software ventures, executives plan to take the company public.

To use the service bureau, companies must have Microsoft Internet Explorer 4.0 or later or Netscape Navigator 4.5 or later. Other system requirements include: for Quicken ExpensAble 98, a 486 with Windows 95/98 and 16 MB of Ram, or Microsoft NT4 with 32 MB of Ram; for Quicken ExpensAble for Windows CE, a 2.0 device; and for the Palm, an OS 3.0 device.