<B> T&E Driven Online</B>
<I>Ford, GM Shift Expense Process To The Web</I>
By Cheryl Rosen
Big new implementations of automated expense reporting systems are moving away from the corporate server and to the Internet--and as the platforms change, so too do the pricing schemes behind them.
Ford and General Motors believe they are driving process savings as well as cars this month, as they begin rolling out huge global implementations of a Web-based expense process from Captura Software Inc., in partnership with Citibank MasterCard and Qwest Cyber.Solutions. The car companies expect the cost of processing an expense report to plummet from about $40 to just $4 as they switch to a hosted online one-card system, they said.
Concur Technologies, meanwhile, is rolling out a full suite of electronic commerce tools under the E-Workplace.com banner, which will include Concur Expense, its traditional expense reporting system; Concur Procurement, a module for purchasing office supplies, which will be available in December; and Concur Travel Network online booking, in partnership with GetThere.com.
Concur's product will debut with a unique pricing philosophy that charges corporate customers not by transaction or by seat, but by monthly "active users." A traveler who submits an expense report in a given month becomes active and pays a single fee no matter how many expense reports he submits during that month. If he doesn't submit any expense reports, the corporation is not charged at all.
The fees are on a sliding scale, from $2 to $10 per month, plus a one-time $2,000 set-up fee. "We're trying to keep the barrier to entry low," said president of small and midmarket enterprises Bruce Chatterly. Purchasing card charges will follow the more traditional transaction fee model, while online booking is being offered at no charge.
Concur also expects to use its leverage to negotiate discounts for customers too small to negotiate on their own. "Since we see all the transactions of all our customers, we can go to vendors directly--we've done that with Staples on the e-commerce side already," Chatterly said.
While the majority of its large global customers, like Lucent, AT&T and Motorola, are using Concur's intranet-based product, Chatterly said "one new customer with 10,000 employees has gone with the dot-com solution. They liked the price and the speed of deployment a browser-based solution offers to get the reimbursement process and the IT resources it requires out of your business as quickly as possible."
Browser-based solutions also have found their niche for On the Go Software, according to senior vice president Doug Sallen. "A system that runs on HTML, like ours, doesn't restrict companies from a technology standpoint while allowing a set of data flows that fully automate the process. The subscription play offers the promise of the Internet with little up-front cost to the customer."
But Sallen is not so sure about that active-user pricing model. On the Go charges customers of ExpensAble.com, the new Web version of its popular Quicken software (<I>BTN</I>, June 7), a one-time fee of about $5,000 and then a flat $5 per month per person.
"What's important to a financial person is predictable expenses, so we think the pricing model for financial-type applications on the Web will be more like the mobile phone model: a base service (like 100 free minutes on the phone) with volume discounts, and additional features (like call waiting) at an extra charge," Sallen said. "Our proposition is to serve high-density travelers with good economic value for predictability" while charging occasional users either by transaction or by the month.
For special services--like direct deposit of reimbursement checks to travelers' bank accounts, which will roll out this quarter, or prepopulation of corporate card data, debuting Q1 2000--ExpensAble.com probably will revert to a format mimicking the transaction fees it will have to pay the banks by bundling a given number of transactions at a given amount.
For Captura, meanwhile, the General Motors rollout--to more than 100,000 travelers in North America--will be the world's largest initiative to combine travel and purchasing card programs, Vetras said. The system is expected to cut the costs of processing purchases by 93 percent and save $3.7 million a year.
Ford is not far behind, rolling out Captura to employees in 40 countries and integrating it with a global card program. Ford processes about a million T&E reports a year, while GM handles a million T&E reports and another million purchasing card reports.
Rick Bennett, Ford's global business expense project manager, said the company has been piloting the Captura system since August and now will begin a full rollout in North America before taking it global. It will replace the current mainframe-based system in Europe and a manual system in the United States.
General Motors, meanwhile, now will have one card that combines T&E, purchasing, fleet and telephone, said worldwide purchasing manager Ted Kline. The company "is in prototype" with a 10-person team ensuring that the system is working correctly. It hopes to move rapidly to a larger pilot this quarter and begin a full rollout in the first half of 2000.
GM four years ago implemented a worldwide purchasing card and selected a combination of the Citibank card and the Captura automated system in December 1998. But it has been waiting for Captura's Web-based system.
John Charters, CEO of Qwest Cyber.Solutions, the joint venture of cyberoptic network provider Qwest and systems integrator KPMG that will host the GM and Ford systems, agreed that global customers are just beginning to trust online systems with mission-critical data. "Five years ago, the Web was not acceptable technology for financial software," he said. "But now you can leverage secure networks to host these applications--and that is allowing Captura to nibble at the heels of the market leaders. Why buy the license to software when you can just pay per seat to use it?"
Captura president and CEO Dan Vetras said the online system, with its underpinning in data technologies like OLAP and Sequel, will allow customers to "drill down and do true data mining" at the corporate level. He also noted that while both Ford and GM are using the Captura system in conjunction with Citibank MasterCards, "we can work with all the cards."
Captura also is looking at automating the issuance of the cards, and at adding a "contract labor initiative" for paying the salaries of temporary employees, Vetras said. Surely more is in the works as well, as Vetras called the expense system "the first Web-based product in an e-finance solutions suite" from Captura. Outsourcing the hosting of such systems "means fast implementation without a huge capital outlay, and one of the most quantifiable ROIs in business," he said.
Vetras told BTN that Captura also "can envision a public offering in our future. It's another funding event--and you can't ever have too much money. Plus, going public will raise the comfort level of our prospective customers and of our current customers as well. Venture capital is a way to begin, not to grow.