When SAP, the German software company, bought Concur Technologies in 2014, it said the key benefit would be the cross-selling of products.
The cost was $8.3 billion, equal to 10 times predicted revenues for the Bellevue, Washington,-based business, which helps companies manage travel and other expenses.
Over the past couple of years, Concur has had a lot of service disruptions, but few product innovations, say critics.
Simply getting your itinerary data from your booking tool to your expense solution, while nice — and it certainly was innovative in 2008, when Concur brought that tool to market — was no longer enough.
Some products languished. Its itinerary management tool TripIt, for instance, was left seemingly untouched.
Overall the company risked ceding a bit of its market-leading territory to upstart companies that focus on expense solutions, such as Chrome River and Expensify.
Concur rejects this narrative. It says that it has been making changes, some of which have been behind the scenes, such as investments in product development and business development that are now beginning to manifest themselves in public ways.
In June it will deliver pretty significant user experience changes within its signature travel booking tool.
That will be a precursor to a major change in the booking tool: Its focus this year is on enabling branded fares in all of its airlines and markets and through all global distribution systems (GDSs) where they’re offered.
The company has more than doubled the number of suppliers participating in TripLink, the tool it has been pushing for four years that enables a corporation to capture the travel spend happening outside of the traditional travel management company (TMC) relationship.
It has also been adapting to the rise of alternative accommodation. In the year since it announced the Airbnb for Business travel account, there's been “a 27 times increase on it."
The Concur Invoice product saw more than 120% growth in 2015. About 32 million users have access. New integrations with third-party tools could help sustain that momentum.
As for TripIt, many user experience changes are on the way, Concur says.
So Concur seems to be on the offensive again.
That said, it's too soon to know if its sale was a good deal. For now, SAP's rival Oracle is far ahead in its ability to extract and leverage data from transactions.
For a broader update on what’s new at Concur, Tnooz spoke with Concur’s executive vice president of travel, Tim MacDonald. He leads the company’s T&E cloud efforts. (The interview has been edited for brevity.)
Tnooz: For readers who haven’t been closely following developments at Concur, what’s to know?
Tim: Broadly, we’ve doubled down on product development. We nearly doubled the number of our developers, to accelerate the globalization of our products, especially on our booking tool at Concur Travel. New markets often require new functionality and localization.
On the platform side, we have invested to make our app center available worldwide.
Tnooz: What should your customers look for from Concur products in the next 12- to 18-months?
Tim: Expect greater stability. Expect more solutions that work globally. Expect an enhanced user experience, based on customer feedback.
Tnooz: You mention stability. Concur had some service disruptions in 2014/2015, as The Company Dime has covered. What's been done to fix that?
Tim: We have undertaken a massive re-architecture effort. We're investing significantly in our technology platform for more stability. It's been paying significant dividends.
We've still got along way to go, but I'd say it's probably our top area of investment: working to build in greater stability while also adding more scalability to add tens of thousands of customers a year.
In my previous life, I was GM of Expedia.com and we went through this exact same effort with a 15—year-old platform. We re-architected it. The benefits now for that company are phenomenal, right? It'll be similar for us.
Tnooz: Some startups say that expense management software is eating the world. They question Concur's necessity for certain types of companies.
Tim: As you go through the sales process with Concur, our competitors will position themselves as what they are. They're either an expense point solution with maybe supplier invoice automation, or they're an online booking tool point solution.
Then the customer hears from us. We tell our connected ecosystem story. We'll ask the customer questions like, “Who is your duty-of-care provider today? Who's your TMC today?”
The contrast, the differentiation is never, “Give me a bullet-by-bullet, feature set comparison of your expense solution.” It's around, instead, "Do you want a platform, or do you want a point solution?"
We'll demonstrate how, with our platform, you can integrate all those third-party and assistance providers. We'll show you how your TMC has been written to our API, where it's leveraging our TMC technology stack in a way that delivers benefits to you that you can't get anywhere else.
We'll show you how we let you tap into a third-party like a VAT reclaim provider, or an audit and fraud detection partner.
Adding these connections is simply a matter of enabling, as opposed to going through a process where you have to ask your IT team to prioritize writing a custom integration to a third-party provider. With us, when they hit that point where they need more configurability and customization, they can move up into our professional product.
Tnooz: What about small-and-medium-sized businesses (SMB)? If I’m not a Fortune 500 or FTSE 100 company, do I really need Concur?
Tim: SMB is actually the most significant growth engine for Concur. We're seeing incredible growth rates of adoption, by SMB customers, of our T&E products.
Everything I said applies all the way downstream, even to our smallest customers. Our platform allows SMBs to scale their T&E solution as their businesses grow.
None of our smaller customers think they're going to be small five years from now, right? They want a solution that's going to grow with them.
Tnooz: Airlines have embraced fee-based ancillaries. When will Concur enable purchases of lounge access and checked baggage via its booking tool?
Tim: It is dependent on the GDS that the TMC uses, right? Our customers choose a TMC, that TMC chooses a GDS, and then the Concur Travel booking tool lives on top of that GDS pillar.
We want to be very early adopters of the branded fare inventory that each of the GDSs are making available.
When it comes to actually being able to book it in the corporate booking tool, that's going to be dependent on that GDS enabling that functionality.
Tnooz: Concur added Airbnb via TripLink a couple of winters ago. How does the alternative accommodation sector fit into the picture?
Tim: There's a considerable segment of our customers who want to enable that sort of an Airbnb for their employees but keep within their travel program. The first way to do that was to bring them on as a TripLink partner.
All of our TripLink customers can enable their employees to book at Airbnb but still have it within their travel program.
So companies are able to apply their policies, they're able to know where those employees are in a crisis, and they're able to include the information in all of their reporting, such as in their audit and fraud protection programs and in the rest of their expense solutions.
Tnooz: On the mobile front, what's the skinny?
Tim: We're focused on our Concur mobile app, which enables T&E mobile experiences. We're a big believer in alternate communication channels. But the primary use case for alternative communication channels, is really duty-of-care — to locate your employees and reach them instantly in a crisis.
We will continue to invest in what's called a risk messaging product for that purpose. We believe we have the most reliable technology to locate your employee and critically, actually deliver a text message to them.
That sort of sounds simple. Like, "How hard is it to -- I can pick up my phone, or type a text message?"
But to actually be able to deliver that at scale, reliably, you have to do a lot of technology work, across all the different messaging gateways, around the world.
Tnooz: How about with TripLink? There was an industry perception that Concur was promoting to companies to change their travel policy and tell their employees that they can book wherever, right?
Tim: We take the blame for not articulating our intent clearly enough early on.
TripLink is a way to bring direct bookings into a company's travel program. It doesn't encourage more direct booking behavior. It does absolutely nothing to encourage or even imply that it's okay for your employees to book direct.
Industry perception is now matching the reality. We’ve gotten the word out now.
The industry now appreciates that what TripLink does is it enables companies to bring those bookings that are going direct into their travel programs.
We now have customers who have the strictest travel policies in the world -- ones who will tell you that they will never, ever, ever allow employees to book direct -- who have adopted and deployed TripLink. Because even they recognize that -- despite having the harshest penalties and the strongest policies imaginable against direct bookings -- even they have situations where employees have to book direct.
A significant and growing percentage of travel is being booked outside of programs. By deploying TripLink, companies now have visibility into that segment. Duty-of-care in real-time is often a driving motivation for their interest.
Since we first launched it, we now have every major travel market logo on board.
Tnooz: What about customers asking themselves, "How's this going to work with my TMC?"
Tim: Over the last two years, we've made a concerted effort to actively integrate a long list of TMCs, meaning, they can take TripLink direct book itineraries that we capture and plug them directly into their existing processes.
Ultimately, they can now include direct bookings in their reporting to their customers. Several of them can even enable agents to see those bookings when a traveler calls in.
Tnooz: For a TMC, what’s the argument for using Concur instead of owning its own technology? Carlson Wagonlit owns its own, etc.
Tim: In any industry, you have a make or buy decision. When you have a technology solution that is widely adopted, like ours is, it means it's going to get more investment, it's going to get more feature functionality, and more rapid development than something you'd be able to build yourself.
That's the reason cloud companies, in general, have grown so rapidly in all sorts of sectors besides travel.
Any company can go try and build their own sales force automation solution or they could buy a Salesforce license at a fraction of the price, and not have to maintain it themselves.
I can count on one hand the number of TMCs either who have or are trying to maintain a booking tool. Nearly all of the rest have walked away from it and decided to go with the leading solutions out there.
You're seeing that play out with Concur's TMC mid-office technology as well, as opposed to trying to go it alone.
Tnooz: It seems like Concur has changed a lot since the late 2000s. How would you sum up its change of strategy?
Tim: We’ve evolved our strategy toward delivering a truly integrated, seamless and end-to-end —- and those three terms are very important —- travel-and-expense (T&E) ecosystem.
That’s quite different than what we had been set up to do, and from what most of our competitors provide, which is point solutions.
Here’s the backstory, for those who need context.
For 15 years, we provided a point solution for expense management. In 2006, we acquired a booking tool and so we moved from providing a point solution for travel plus a point solution for expense, with a connection between the two. *Year corrected at 10pm ET. Sorry for the error.)
What we've discovered is that simply connecting a booking tool to an expense solution is not a real T&E solution for customers.
To solve customer problems, we need a truly integrated ecosystem for T&E. So we embraced a platform strategy, integrating both our products and third-party products.
In 2016, our customers need, for example, a travel approval product that's not just a point solution but that is also connected with the way that travel gets booked and the way that travel gets expensed.
Throughout the life-cycle of a business traveler’s journey, the travel manager or the expense administrator, or the company I should say, has complete visibility and checks and controls.
The clearest example I can give you is that you can get an approval workflow solution from just about anybody and you can get it somehow loosely associated with your online booking tool.
But unless it's connected with your online booking tool and with your online expense solution, there's no way to really ensure that what your employees have approval to book and spend is actually what they booked and spent, right?
By connecting all of those, the way Concur does, you can assure that when a manager says, "Yes, it's okay, Sean, for you to go ahead and take this $1,500 trip, because I've seen that you're going to spend $800 in airfare and $400 in hotel," et cetera....
That's actually what you booked in the company booking tool and then, when you go to expense it, that amount matches the $1,500 amount that was approved. Without those connections and integration and checks, you don't really have a solution in place.
Another example is the one that's gaining a lot of traction within the industry as travel managers realize that the company's duty-of-care responsibility is their responsibility as well.
Pulling information together to ensure the company can actually locate employees in times of crisis and reach them, that's critical.
Simply relying on GDS PNRs [personal name records] for location data is wholly insufficient in terms of knowing where your employees are and being able to reach them in times of crisis.
To solve for that, Concur now pushes rich data to your duty-of-care systems provider.
If you have a connected ecosystem that pulls information from, "Well, where did the traveler request to go? What did they book in the booking tool? What did they book directly with a travel supplier? What if they didn't book travel at all, and they just drove two hours away to a town? Where did they use their corporate card? Where did they get an e-receipt? Where did they use Uber?"
Tnooz: Do you worry about younger, nimbler competitors nibbling away at your market share?
Tim: No. What really differentiates Concur, here and now, is our platform. We're investing heavily in being number one in deriving value from a platform approach.
We’ve got a four-year head start on building a platform solution over our smaller competitors. We can say, "Concur has 140 platform partners, including six VAT reclaim partners alone, while they’ve only got a handful of integrations.” It's a favorable comparison for us, quite frankly.