Online Reporting Attracts Attention Across The Atlantic

<B>Online Reporting Attracts Attention Across The Atlantic</B>

By Lynn Woods

Spurred by the unifying force of the euro as a single currency, corporate travel departments in Europe are consolidating and automating their processes, and interest in Web-based T&E expense reporting systems is growing. While the trend toward technology among European companies still may lag behind that of their American counterparts, the gap is closing, insiders said.

"It's always been an assumption that outside the U.S., technology lags by 18 to 24 months," said Elizabeth Ireland, vice president of marketing for Extensity Inc., an online T&E system supplier based in Emeryville, Calif. "Now we're seeing a collapse of that."

The maturing of the expense reporting products being offered by Extensity, IBM, Concur Technologies, Captura Software and other vendors is another factor that is prompting skeptics on the Continent to take a deeper look--and the proven track record of these systems in the U.S. market is a key selling point across the pond.

"Interest in Europe has increased significantly in the past three to six months," agreed Ray Curatolo, practice leader at IBM Global Services, noting that the success of IBM's Expense Report Solution, now deployed at more than 50 midsize to large companies, has led to stepped-up inquiries.

To boost its sales and provide more support to European clients, Extensity recently opened an office in London and hired Brian Mort, formerly a global account director for SAP, as vice president and general manager of European operations. Extensity has rolled out half a dozen implementations in Europe, including Cisco Systems, which is operational in five countries, and Sybase Inc. (see story below).

IBM Global Services' U.K. office will begin providing local sales and delivery of IBM ERS by the third quarter of this year, Curatolo said, and that blueprint "will be replicated throughout the world." Local teams will be established in Australia and Canada in the third quarter as well, and in other European and Latin American countries "probably Q3 to Q4." IBM already is talking to "a slew of customers" in what Curatolo called the "wide-open" European market.

A local presence that can "replicate the proven technology, methodology and installation" processes honed by IBM for its U.S. customer base is a key selling point, Curatolo said, allowing "delivery of the project through IBM, and not a third party, whether in the United Kingdom or the United States."

But the players are finding significant differences between the European market and the one back home, due in part to the diversity of laws and technologies that make expense reporting far more complex to manage.

There are three basic challenges. First, although progress has been made, technology readiness is still an issue. "In Europe, you're dealing in each individual country with different technology platforms and coping with varying readiness levels," said Sally Brown, the London-based director of public relations for American Express Europe. "There's a vast difference between the readiness of corporations based in Scandinavia and in the southern Mediterranean."

U.S. multinationals based in Europe are spearheading the implementation of Web-based expense reporting systems, followed by European multinationals and smaller companies, Brown said.

Another issue is the fact that corporate charge cards still are relatively uncommon and, indeed, even credit cards are far less prevalent than in the United States. Traditionally, European companies provided employees with credit cards, which were used both as corporate cards and for personal expenses, said Lieke Buss, business travel manager at Amsterdam-based ING Bank N.V. Because these credit cards are viewed as an employee benefit, replacing them with a bona fide corporate card can be a sensitive issue at many companies. Nonetheless, many European firms, ING Bank among them, now are implementing corporate cards as the first step toward consolidating and automating the expense reporting process.

Perhaps most significantly, a pan-European approach to managing and consolidating T&E expense reporting is no easy feat, given the myriad of tax laws and expense reporting requirements on the Continent. In some countries, the value added tax is deductible; in others, it isn't. Some of the expense requirements seem positively arcane to an American: In Germany and the United Kingdom, for example, reimbursement for miles driven changes with the engine size of the car. In France, a daily "meal voucher" must be filled out.

"A system deployed across borders can be seamless to the end user, but it must be configured at the back end to account for these differences," noted John Haville, managing director of outsourcing for Unisys Corp.'s travel alliance services.

<B>IBM Compatible</B>

Ingersoll-Rand, based in Huntersville, N.C., recently chose IBM ERS for its European rollout, partly because "we felt IBM was in the best position technology-wise to handle" the country-by-country configuration needed for an effective global expense reporting system, said Bruce Berkey, manager of finance for common administrative services. "With a lot of other vendors, the time frames were not what we were looking for, and we questioned their commitment" to do the configuring.

With its U.S. rollout of ERS almost complete, Ingersoll-Rand will begin implementation in Europe this year, kicking off with a pilot of 30 to 40 users in the United Kingdom starting in May. By the end of 2000, the company plans to have ERS rolled out fully in the United Kingdom, France and Germany. Other European countries will follow in 2001.

As IBM's first rollout in Europe, Ingersoll-Rand itself is serving as a kind of pilot for Big Blue's expense system. Separate tables of origin are being developed for each country as ERS is deployed. The multiple configurations will be invisible to users, who will log on using an ID number that will indicate their country of origin and automatically prompt the system to call up the right version.

Berkey said that ERS's ability to analyze expense reporting data on a global basis will enable Ingersoll-Rand to find new savings opportunities with travel vendors. Consolidating the data might reveal higher volumes on some air routes, for example, which could lead to better deals with airlines.

One hiccup in the process is the fact that the corporate card provider is not able to download data electronically. "We can send them the file, but they've got no place at their end to put it," and must post it manually, Berkey said. More of an inconvenience to the corporate card vendor than to Ingersoll-Rand, this manual practice should end soon. "They've said electronic filing is in their capitalization plan for 2000."

Berkey said the lessons learned from implementing ERS in the United States will be useful in the European rollout. For example, he has discovered that employees need to be nudged out of the old way of doing things. "In general it's very important to keep hammering away at people that the company will pay your expenses if you put them on the card. They still think we reimburse. We plan to give more in-depth training to European users on specific features of the system in the United Kingdom.