Dean Forbes
The Transnationalthis week interviewed KDS CEO Dean Forbes, recently appointed to replace founder and newly named executive chairman Yves Weisselberger. Forbes said the organization is tweaking for "a bit of fresh energy, fresh thinking and fresh ideas," and he referenced a "minor" planned reorganization. He joined the company a year ago after leaving an executive sales job at Oracle Corp. Excerpts of the discussion follow.
KDS offers booking and expense technology separately and also together as an integrated product. What are clients using?
I have observed this debate out there as to the value that can be obtained from an integrated platform, so first things first: Upwards of 80 percent of our current pipe of opportunities are integrated travel and expense. That's customers coming to us and asking for integrated travel and expense, or us pitching and them appreciating the value. Regardless of what all of our industry leaders believe to be the right answer, customers are speaking and there's interest in that single platform. Where we think there's opportunity to create some unique value is in the analytics and forecasting that can be done when you have an integrated platform. Not the operational reporting, not "What can we report on?" and "What do we now know because we do have these things integrated?" We're trying to help companies figure out what they should do based on their historic and most-likely behavior, and I think that's more interesting and more valuable than just understanding what happened because the two elements were integrated.
This is reminiscent of your comment on return on investment and where clients would pay based on savings generated. Is that what you're getting at?
No, the ROI-based model that we had in mind at the time never really came to full execution, for good reason. What we did pursue was this modeling where we can take historic trends--some impact analysis and what-if scenario planning--on the fly and help a corporation understand the savings with different configurations of expense policy, travel policy and different travel behaviors, [determining what] would those do to the bottom line, and helping them model that in minutes. I struggle to see how someone will argue away the value of being able to do that. The ROI model is nice, but the challenge was getting both sides to agree on it. In travel, the potential savings are huge, but here's what happens: We say, "We can save you $15 million and we want 10 percent of that." They say, "$15 million? That's great. But if you save that, we have to pay you a lot of money and maybe you can't save" [as promised] and the discussion becomes circular about how much we can potentially save them.
For multinational firms, some have debated the best of market approach for software versus seeking a single global solution. What are you seeing among your clients?
What we would all like to say is that a single global tool is best for the client, and there are economies of scale if that can be accomplished. But I would encourage all customers looking at T&E solutions to buy locally relevant solutions, and if those can be scaled, great, but the local requirements are so important to get right. There's content, there's language, there's contractual, then there are expense's local elements like per diems, VAT and other taxation. T&E is an incredibly local business. It's not like at Oracle, where an enterprise resource planning system better be used across the 50 countries that the company has business in. So I would encourage local relevance over global, marginal applicability. That will be in our favor sometimes and not other times.
How are consumer technology changes impacting enterprise IT?
This is probably the most important question for technology companies to answer at the moment. In my opinion, our consumer behavior is taking over our enterprise behavior. When I talk to my buddies at Oracle, who are so focused on pleasing a CIO, those CIOs and even CFOs are seeing that employees are turning up at work with applications they want to use to do their corporate business. They are downloading them on tablets and other mobile devices. They have websites they like to use. They are defining what corporate and enterprise applications they use to do their business, and it puts the enterprise in reactive mode. They're trying to react to what applications the business needs, and our consumer behavior is driven pretty much on modularization, what's fun and easy and what's cool. This is why I use the collaboration tools I use, because they're cool and easy to use. I download it and I show my colleagues at work, and it's super-easy and super-cool, and before you know it 50 others in the company are using it. I think the responsibility on companies like KDS, and me and my team, is to create stuff that is easy, that takes the functionality that the user needs and makes it front and center and gets rid of everything else. That's what apps, for example, are all about. It's easy and modular because it's specific, and it's fun and cool. Anything we develop on those parameters will be used.
Are most of your corporate clients direct or through a travel management company relationship?
Fifty-fifty. And TMC relationships are absolutely critical for us. The article originally was published in Business Travel News.