New products, better integration, and increased funding are setting the stage for heated competition among companies that provide travel-and-expense (T&E) management services.
The payoff could be huge: U.S. business travel is expected to top $292 billion this year, according to the Global Business Travel Association (GBTA).
Much of T&E processing is still conducted by old-fashioned methods: As much as 65% of large enterprises still use in-home systems, such as spreadsheets and word-processing software, according to research by Matthew Vettel, managing partner at Great Hill Partners.
Such numbers are no doubt fueling much of the interest in the space.
In December 2014, SAP acquired T&E giant Concur for $8.3 billion.
In June, Los Angeles-based Chrome River Technologies received $100 million in funding (led by Great Hill), funds it’s using, in part, to hire key personnel and build out its engineering, implementation, and support staff.
The company is also building a team in Canada, expanding operations in Europe, and planning to begin servicing the Asian market with a dedicated office, rather than from the U.S., in 2016.
Also in June, e-procurement specialists Coupa Software of San Mateo, Calif., received $80 million in funding led by T. Rowe Price.
Citing strong growth in Europe and the Asian-Pacific region, the company is using the funds to expand its global operations and has recently opened new offices in Singapore and Stockholm. It also expects to grow sales and increase its product-development capabilities.
A month later, Coupa also acquired travel-technology company Tripscanner to “bring more freedom to business travel booking” by incorporating T&E that occurs outside corporate travel programs.
Together, the moves speak to an industry in transition, with many other players -- from small businesses like Expensify to the major global distribution systems like Amadeus and Sabre (plus companies dabbling partly in the field, like Deem) -- aiming to get a share.
Originally founded on the premise of simply linking travel booking and expense accounting, the goal now is to provide true end-to-end services, foster integration with a wide variety of partners, and gain 100% visibility of all travel spend.
Earlier this year, for example, Chrome River unveiled Data Explorer, a Big Data-based analytics tool that allows users to create visualizations in order to uncover compliance issues, critical trends, and cost drivers.
The company is also working on improving integration with banks and better image-processing capabilities for submitting expenses. Says CEO Alan Rich:
“We’re looking at all sorts of ways we can make the process a superior experience, so users don’t have to go back and forth between systems."
Coupa, meanwhile, has rolled out SmarterTrip, a mobile app that augments traditional expense-reporting systems by automatically recording an employee’s location to predict items that may need to be expensed.
For example, when enabled, the app will track a user’s mileage, ask if it’s expensable, and create an expense line item that can be submitted with a single click.
“Once the employee turns it on, either via their mobile app or their Apple Watch, it stays with them all day long,” says Donna Wilczek, vice president, strategy and product marketing. “They’re effectively turning on a virtual personal assistant.”
But perhaps the largest trend impacting the industry is the pressure to account for all travel expenses in a world of proliferating booking options (e.g., via Google Search), non-traditional travel options (e.g., Airbnb), and other expenses that may otherwise be out of compliance with corporate policy.
Says Tim MacDonald, executive vice president, travel, for Concur:
“What happens today is that our customers are seeing more than 50% of their hotels being booked direct with hotel companies and more than 20% of their air being booked direct with airlines. They’re not getting any of the benefit of their managed travel program on those bookings.”
To solve that problem, the company launched TripLink in 2013 to ensure such bookings are captured, control program leakage, and create a more seamless experience.
Since then, the company has partnered with dozens of travel suppliers to create an app-based ecosystem that integrates with companies ranging from Airbnb to Wally Park. Recent additions include Accor Hotels and Booking.com.
Even deeper integration will no doubt continue to be the industry’s focus, whether it’s incorporating new partners or existing internal systems, such as calendars, pre-approvals, and duty of care requirements.
Simply connecting a booking tool and an expense solution “doesn’t yield that workflow benefit, that duty of care benefit, that ability to manage your travel across all channels,” says MacDonald.
“There are numerous ways that value can be provided in integrating T&E that go well beyond just connecting a booking tool and an expense solution.”
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