When considering software to automate travel and expense management, consultants say the most common software being...
deployed today is the Software as a Service (SaaS) model, which removes the burden of maintaining hardware and software on-premises.
Jim Coufal, director of payment systems and expense management for TCG Consulting, based in Charlotte, N.C., said that few on-premises technologies are available now for travel and expense management software.
"I would say 99% of applications being put in place are licensed third-party applications, and around 80% of those are Software as a Service," Coufal said.
Mike Hilton, co-founder and executive vice president of worldwide marketing for Concur in Redmond, Wash., has been with the company for 19 years. He said Concur started as an enterprise software company with an on-premises technology, but by 1999 the company offered its first cloud-based offering and has since transitioned to SaaS only.
"Compared to traditional enterprise applications, like an ERP model, the SaaS model offers complete innovation," Hilton said. "Looking at CIOs and IT leaders, we're starting to see a new paradigm where people are embracing SaaS and rethinking IT as a more strategic function to the business."
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Some organizations that have an investment in ERP suites -- such as SAP and Oracle -- might not need to start from scratch when looking for a travel and expense management software vendor. In ERP suites, companies can integrate travel and expense management by adding modules for accounts payable, general ledger, human resources and expense reimbursement.
The caution for an enterprise using ERP is that staying with the same system to incorporate expense management isn't always the best choice. Coufal recommends that companies go with the best fit for their requirements, even if that means new software.
Requirements gathering an essential first step
According to experts, requirements gathering, followed by an ROI and senior management endorsement, are key steps to selecting the right travel and expense management software. Then go out in the marketplace to look at the vendors available and find the best fit for the organization.
"You start by going out to the different functional areas within your organization -- if you're global, do this in all your locations -- and basically look at how you process your reimbursement today," Coufal explained.
After organizations carry out requirements gathering, they can determine what a prototype looks like. This provides a better understanding of the change management requirements, the cost to implement the changes and, most important, where and how cost savings can occur.
"Requirements gathering is essential to finding a vendor. When you go out in the marketplace you can submit a 'laundry list' of requirements to the vendor and evaluate their capabilities," Coufal explained. "This allows you to objectively look at each requirement to understand how well a vendor can meet that."
The rewards of a successful deployment
Thomas Lyman, director of accounts payable for Safety-Kleen Systems Inc. in Plano, Texas, an environmental services company, describes the result of its successful travel and expense management software deployment as "moving the company from the Dark Ages to a modern time."
Safety-Kleen has approximately 4,300 employees, and last year the company spent $14.5 million on travel and related expenses. Lyman says his team handles around 2,300 expense reports each month.
The company now automates travel and expense management using Concur, but before this deployment, Safety-Kleen was outsourcing the process and decided to bring accounts payable back in-house, creating a fully manual process that was plagued with problems and employee complaints.
With the right software, Lyman said Safety-Kleen employees are now happier about travel and expense reimbursement, and the company's ROI has resulted in a significantly lower cost per invoice.
"We're doing between 2,100 and 2,300 reports each month, and 100% of reports are audited by one person who also does all the administration,” Lyman said. "It's been one of the big wins” in terms of modernizing the process, he said.
Downsides to consider
The downside of travel and expense management software for employees is typically seen in environments where reimbursement is a loose policy and travelers aren't asked for details around their hotel, food purchases and taxes. Using travel and expense management software requires some itemization and breakdown of expenses to determine what is reimbursable and what isn't.
"You might get some resistance initially from the travelers, but the value for the company is in the detail behind the information and the ability to go back to your vendors to know exactly what rate you paid and if you're getting a preferred rate, or if taxes can be recouped," Coufal said.
Another downside to travel and expense management software are the initial setup costs in addition to the software licensing. Implementation and integration with the existing financial system can range from six to nine months, and there's also the learning curve of the application itself. Once deployed, the application also needs a dedicated administrative resource.
Despite the initial costs and deployment challenges an organization may face after selecting the software and vendor, Coufal said that today, there's no good reason for a company to not invest in travel and expense management software.