Choosing how to connect up the dots in 2.0
The pantheon of entities tagged 2.0 grew ever more bloated with the unveiling of 'Travel and Expense 2.0' at the business travel industry's annual convention in Boston this week.
Still, Concur's new release is a big step for the on-demand vendor — which, with annual revenues now topping $114 million, more than 5000 clients and over 4 million users, is one of the largest SaaS pureplay vendors. At the same time, it highlights an important quandary for vendors and customers when deciding how to take advantage of the connected world that Web 2.0 represents.
There were two big ingredients to Concur's announcements this week:
- Smart Expense brings together travel booking, corporate card charges and electronic receipts into a single, integrated system. Until it acquired Outtask eighteen months ago, Concur handled the back-office end of expense management; it collected data from corporate card accounts and converted it into an expense claim for approval and processing, complete with electronic receipts from selected suppliers. After adding Outtask's Cliqbook on-line booking service, Concur now offers the complete chain of events, and thus the ability to automate the entire process. So long as corporate expense policy is automatically applied by the online booking tool — and assuming no discrepancies when the supplier presents its bill — then no further human intervention is required to approve the expense, match up the e-receipt and pay the bill.
- Concur Connect opens up its systems to travel service operators, providing the technology to deliver the Smart Expense concept. It collects information from travel suppliers to present in the online booking system. It also provides interfaces for processing bookings and collecting electronic receipts. Concur claims more than 100,000 suppliers are linked into its Connect ecosystem, ranging from airlines, hotel chains and car rental firms to limo and parking suppliers, rail operators and OpenTable's online restaurant reservation service.
Opening up interfaces to enable smarter transactions certainly sounds like a Web 2.0 initiative, and the vision is persuasive. But it only works if every supplier on your expense claim has connected into Concur's interface and your employer has signed up for both the reservation and the settlement components of Concur's offering. This is the quandary I mentioned earlier: will customers want to do it Concur's way, or will they prefer to work with separate vendors for reservations and expense claim settlement?
Evidently, a sizeable slice of Concur's own customer base wants the dual solution. When I met Concur's CEO Steve Singh in April, he told me that in the first year after the Outtask acquisition, 200 or so customers had signed up for the second application. Concur's prior growth rate had been relatively sedate for a SaaS vendor, at 25-30% year-on-year. It's now up above 40%.
A competitor that I speak to regularly takes a different view. Rearden Commerce, a client for whom I've written a white paper [see disclosure page], believes customers want their choice of vendor at each end of the process. Last week, it announced partnerships with several expense management vendors as part of an initiative it's calling the 'Open Expense Network'. Customers who use Rearden to make reservations can have the details of those bookings automatically prepopulated into expense reports, where they can be cross-matched to the actual bills.
Rearden, which this week announced passing the 600 customer mark, isn't at the same scale as Concur, but it's an ambitious startup and its customer base is currently expanding rapidly thanks to a tie-up with American Express. It's banking on Web 2.0-style ease of use to engage both customers and suppliers, and so its product development emphasizes connections that enhance the booking interface or the supplier interface. Last month, for example, it introduced real-time flight updates to automatically notify travelers of last-minute gate changes, delays and cancellations. In May, it announced a restaurant reservation service that 'mashes up' information from OpenTable along with Zagat Guides, Google Maps, Maponics and Rewards Network to help diners make informed choices about where to book their table.
Rearden will probably be able to stay ahead of Concur for a while yet in the ease-of-use stakes but Concur's trump card is its access to the e-receipt, which follows on from its access to corporate card records. This enables it to complete the process in a way that isn't open to two separate vendors working together, because privacy rights restrict the extent to which they can share such information.
Of course both Concur and Rearden are up against other vendors with their own recommendations for connecting up the dots — spend management vendors, for example, that look to provide a consolidated view across all an organization's spending; procurement vendors that are extending their reach beyond physical goods into services spending; and the ERP suite vendors such as Oracle and SAP, who want to swallow up every last island of business automation.
All these vendors argue for connecting the dots in a certain way mainly because of where they themselves started from. Concur isn't going to make a case for keeping expense reconciliation separate from travel booking, any more than Rearden is going to argue in favor of using the same vendor for both. The conundrum over how to connect the dots thus becomes the customer's. Which combination of best-of-breed versus integrated solution delivers the most benefits to be gained from Web 2.0's information sharing and connectivity? Web 2.0 is increasing the range of choices available, without giving any clues as to which will work out best in the long run.