We have written about how the acquisition of Concur might change SAP and the mutual benefits of the Concur-SAP relationship. This year’s Concur Fusion conference provided an update on progress in that relationship and the latest developments for Concur.
Changing of the Guard Right after this article was written, SAP announced that Steve Singh will be leaving SAP at the end of this month. The announcement implied that Steve may be starting another company, but was not specific. Effective May 1st, 2017, Robert Enslin will be president of the new Cloud Business Group encompassing Concur, Ariba, Fieldglass, SuccessFactors, Hybris, and the SMB Solutions Group.
Right after this article was written, SAP announced that Steve Singh will be leaving SAP at the end of this month. The announcement implied that Steve may be starting another company, but was not specific. Effective May 1st, 2017, Robert Enslin will be president of the new Cloud Business Group encompassing Concur, Ariba, Fieldglass, SuccessFactors, Hybris, and the SMB Solutions Group.
Open and Integrated
After SAP acquired Concur in 2014, they put Steve Singh (cofounder and former CEO of Concur) in charge of the Business Network Group, which included Concur, Ariba, and Fieldglass. These are best-of-breed suites that can run stand-alone and as well be integrated into non-SAP environments. Steve (and others at SAP) has publicly committed to retaining the openness of these platforms. At the same time, SAP is in the process of methodically integrating these platforms together wherever it makes sense, such as providing the ability to onboard vendors once across all three environments, instead of having to onboard suppliers separately for each platform.
While integration between these platforms as well as integration with the rest of SAP’s portfolio is happening, wherever it makes sense, integration or conformance to standards is not being forced where it doesn’t necessarily fit. However, Steve said they do want to offer a unified set of contracts across the various SAP platforms and systems. This is challenging because ERP is consumed differently than say, Fieldglass. Payments for Fieldglass are entirely based on transactions; the customer doesn’t pay until after the transaction is consumed. Customers can terminate the contract with just 10 days notice. Steve said this is the direction he would like to take other solutions too, where customers get to pay the way they want and turn it off when they want. But that goal is currently aspirational and it is to be seen if/when they will actually get there.
Concur integration with SAP ERP and SAP S/4HANA (Private Cloud) has been available since September 2016, with optional SAP Cloud Platform Integration (formerly HCI) available. About 200 customers are in implementation or live, integrating with HANA Private Cloud. Concur has implemented master data integration, which sends data in real-time into Concur, rather than batch. The integration supports invoices too, but not yet POs. Concur is also publishing new web services to enable financial integration with other financial systems. Integrations are planned with SAP ByD (By Design), and B1 (Business One).
Beyond the Business Network Group — the SMB and Data Connections
In addition to the Business Network Group, Steve Singh’s responsibilities have expanded to include SAP’s SMB1 front and back office solutions (Business ByDesign, Business One, Anywhere, All-in-One), Data-as-a-Service (DaaS), and Connected Health. The SMB solutions are synergistic with Concur’s growing emphasis on SMB. And DaaS has synergies with all three parts of the Business Network Group. The first iteration of DaaS is a collaboration with Fieldglass to create a real-time data tool that can pull up various costs, time-to-hire, and other dimensions of contingent labor spend data. Fieldglass customers will be able to opt in to share data anonymously in exchange for access to aggregate data, such as current actual labor cost by geography and function. By the same token, Concur has probably more data about corporate travel in one place than just about anyone. They have relationships with the major TMCs (Travel Management Companies), hotels, and airlines, TripLink, and other data. Ariba has the world’s largest supplier network, with lots of transactional data. You could see why DaaS was put under Singh. There is tremendous potential value in aggregating all of that data into services as part of DaaS.
Travel managers and senior executives have a responsibility for the wellbeing of their employees, whether those employees are travelling, at the office, or working at home. This includes their legal duty of care obligation, as well as a moral responsibility, to protect employees from harm from various risks such as natural disasters, conflicts, civil unrest, and terrorism. Concur’s Risk Messaging helps companies meet this responsibility. It actively monitors employees’ locations and potential risk events around the world. Concur can get a more complete and accurate view of where employees are by leveraging the wider set of data it has about travel activities, beyond GDS bookings, such as use of the Concur app on the phone, TripLink activities, TripIt Itineraries, travel requests, credit card transactions, planned meetings, check-ins, e-receipts (such as Starbucks and Uber), and so forth.
If an event occurs, for example a hurricane is forecast, the system shows the manager which employees are in the warning zone, generates alert messages, and allows the manager to check off who the alert should go to. The alert can include a request for employees to indicate whether they are safe or need help. Responses are viewable on a dashboard. Via a partnership with HX Global,2 employees can be monitored and alerted 24X7, even if the manager is offline and unreachable at the time the risk is emerging.
The Concur profile for an employee typically has home and work addresses, corporate profile, cell and other phone numbers, work and personal email addresses, making it more likely that the system will be able to reach the employee. Risk Messaging will be available in July.
Mileage reimbursement is the tenth largest travel spend category — Concur customers were reimbursed $2.3B for mileage last year. The vast majority of these reimbursements rely on employees’ estimates of miles driven. Concur’s Mobile app has a new “Auto Tracking” option. Users simply check the box, select which days and times to track, and then let the app do the rest. During those times, the app automatically detects when the user is in a car, and starts tracking miles travelled. Later, it shows the user a map of all the segments for all the trips driven during that period. The user can select which ones were reimbursable (say a customer visit) and which were not (e.g. commute to work or trip to the dentist). With just a couple of taps, those trips are moved to the user’s expense report, and there is electronic documentation of the actual GPS-tracked trip, tied to each specific mileage expense line. This is great for compliance. The app can pull in information about the user’s car from their profile, automatically inserts the proper rates, and calculates the reimbursement amount. Concur describes it as ‘set it and forget it.’ This saves the user a lot of work in tracking and documenting their mileage, and can save companies a lot of money.
Hello Hipmunk Travel Bot
Last October, Concur acquired Hipmunk. After hearing Adam Goldstein (co-founder and CEO of Hipmunk) speak a couple of years ago, I tried Hipmunk. The user experience was (and still is) so much better than any of the other online travel tools, that it is the only tool I use since then for arranging air travel and more recently for hotels and rental cars as well. Adam said, they built Hipmunk to take the agony out of travel for frequent business travelers.
Adam told us the average American traveler does 22 searches before booking a trip. They are not finding what they are looking for quickly. The Hipmunk team asked themselves, ‘what if we could compress those 22 searches to one search — or even better, zero searches.’ That led to “Hello Hipmunk,” an email-based bot launched at the Phocuswright conference in Nov ’15. The user types an open-ended travel question into an email and sends it to the bot. In the demo at Fusion, they typed in something like ‘looking for non-stop flights from SF to Boston for GBTA conference.’ From the user’s calendar, it knew the dates of the conference and sent flight options back in an email. The user could modify the search for example by typing ‘want to arrive on second day of the conference and prefer JetBlue.’ Once the user sees the option they want, they click on it, confirm all the details, and click ‘OK’ to book.
Hello Hipmunk was made available on email first, then later on Slack, Skype, Facebook Messenger, and Microsoft Teams. Hipmunk plans to launch on other platforms as well. Adam said that Hello Hipmunk teaches them what kinds of questions and things travelers are looking for when not constrained by a search box. He said, Hello Hipmunk has become the most used travel bot in the US. Now they incorporate data from Concur to make Hello Hipmunk smarter. As they collect more and more data on the kinds of questions people ask, they are able to answer more of the questions and request — and get smarter about it. For example, “I want a flight this Thursday” means you want to fly on Thursday, but “I want a flight for Thanksgiving” probably means you want to fly before Thanksgiving Day. They are working on better integrating Concur travel with the bot, such as pulling in a company’s negotiated rates and letting the user complete the booking process right there in the bot.
Future and Near-Term Investments
In our executive briefing, Tim MacDonald, EVP Travel and Global Products, said they are doing a lot of research that will come to fruition in 3-5 years. They are making a significant investment in a data platform and next generation analytics, applying AI to deliver real-time insights. He said his team is also spending countless hours studying the user experience, with a focus on reducing ‘time-on-task’ — the amount of time it takes to accomplish a task. Searching and arranging travel and submitting expenses are non-value-add tasks for employees, so reducing time on those tasks, to as close to zero as possible, is the goal. This year, Concur is launching a completely new design for their expense product addressing three points: 1) itemization, 2) allocations, and 3) mobile app features/changes such as a redesigned invoice approval process.
Tim said that Concur is getting significant traction on TripLink (see below) with 1,000% (over 10X) increase in adoption by users. As a result, Concur’s level of visibility has gone up dramatically and they are seeing things they never saw before. They are leveraging Hipmunk and TripIt, the consumer-facing products, as a great way to test innovation, quickly learn what works and doesn’t work, and then migrate successful functionality to the enterprise customers.
While Concur’s roots are in the large enterprise, the SMB business unit is becoming increasingly important for them. With over 800 dedicated employees, Concur’s SMB business grew double-digits YoY in 2016 and is their fastest growing sector in both revenue and new logos. They define SMB as businesses with 1 to 1000 employees, with ‘small businesses’ having 1 to 100 employees. That is where they start their thought process — with the lowest common denominator. Small businesses don’t need deep functionality. SMB customers need it to be quick and easy, but with the ability to grow into a full enterprise scale platform over time as needed. The SMB product offering includes Travel, Expense, and Invoice (Invoice is a sweet spot for Concur SMBs). These are the same as the large enterprise products, but delivered in a different way.
Concur has a three-pronged strategy for SMB; Simplicity, Scale, and Service. Simplicity is extremely hard to get right. It includes not just the product itself, but making every single touch point seamless and easy. One area they are working on is ‘immediate activation,’ so the first time someone logs in, they can immediately use the product and be productive. To achieve this, Concur is analyzing the configurations of thousands of SMB clients, to figure out what are the most typical configurations, by industry and by the type of financial system they use. Concur already has QuickBooks and NetSuite connectors and is building more connectors for the most common SMB financial systems including Microsoft Great Plains, Intacct, and Microsoft Dynamics AX. During the auto-configuration process, they will interrogate the client’s financial system to see how they are tracking costs today. The client just needs to map the expense types to their GL codes. Now, knowing a new client’s industry and financial system, Concur will automatically preconfigure the system for immediate use. They are rolling out a first release of that functionality this quarter and are including a feedback mechanism so they can hear how it is working and continually improve. They are also working on ways to make it easy to customize the preconfigured solution.
Regarding ‘Scale,’ Concur recognizes that the traditional large enterprise sales, channel, and service models don’t scale up to serve large numbers of SMB customers. The distribution channel, partner model, and service model need to make things very simple and easy for the user, but also scale up to serve thousands of customers with very few resources required per customer. For their Service strategy, Concur wants to maximize self-help, providing bite-sized content, in context, at the moment the user needs it.
They measure success not by the number of contracts signed, but by measuring revenue under management and retention rates with the customer. Retention starts from the very first time a prospect goes to Concur’s website, creating a first impression, and the cumulative impact of every touchpoint from there on.
In a conversation I had with Christal Bemont, the SVP and GM of Concur SMB, we discussed the potential applicability for larger enterprises of some of these SMB lessons and approaches. Large enterprises also desire rapid, easy implementations, preconfigured systems, and context-relevant self-help. We wouldn’t be surprised if some of these innovations migrate from SMB to Concur’s large enterprise business as well.
Globalization and localization are important for Concur since they are used in so many countries around the world. To this end, Concur is leveraging SAP’s worldwide localization teams and capabilities. Concur added six new languages last year, bringing the total to 22 languages supported in their products. Concur supports expense reports the way they are done in different parts of the world. The US does receipt-based expense reports, whereas in Europe, it is often trip-based expenses (report per trip), and in Asia it is request based, requiring multiple approvals before the trip.
Concur is continually updating country-specific variations of expense reporting to maintain regulatory compliance, such as incorporating the different standard rates for travel allowances, mileage reimbursement, per diem rates, VAT, and so forth. In some countries, trips that combine personal and company business are considered a benefit for which the employee is supposed to pay taxes. Concur’s expense solution automatically calculates and deducts these taxes. Even a small business can ensure they are tax and legally compliant everywhere.
Concur recently implemented ‘e-Bunsho’ in Japan, which provides an ‘official timestamp’ on receipts on a mobile device thereby avoiding paper receipts and removing the ability and temptation to modify it after the fact. They will be implementing this same functionality in Latin America soon. The majority of travel in China is arranged using C-Trip, so Concur built custom integration with C-Trip. They have implemented rail travel in seven different EU countries. These are just some of the examples of region-specific functionality that Concur offers.
TripLink is an increasingly important piece of the travel management puzzle for Concur and its customers. More and more travelers are booking travel directly on the providers’ sites (airlines, hotels, rental car), outside of the normal Concur tools. Many providers are encouraging people to book direct by offering better prices. There are many problems with direct booking — the traveler doesn’t see or take advantage of corporate discounts; those bookings are not counted towards volume spend for the company, thereby reducing bargaining power and volume discount opportunities; there is no enforcement of corporate policies; managers lack the visibility and reporting; it is harder to perform the duty of care (not knowing where your employees are); and there is a reduction in traveler productivity, as the process can take more of their time. TripLink allows management of all travel, regardless of how it is booked, whether via the Concur app, or via a TripLink enabled supplier even when the user goes directly to the supplier’s website.
Concur has worked continuously to get more and more travel providers onto TripLink. Today, 46% of air carriers have agreed or gone live, as have 46% of hotels, and 94% of car rental providers. The two big hotels they still need are Hilton and Hyatt. Most of the missing providers want to integrate with TripLink, but have a long queue of IT projects on their roadmap and so have not implemented yet. Once a supplier is integrated, when you sign into their site, they will recognize that you are a Concur employee (provided the employee has linked their account by checking off the ‘Concur’ checkbox on the site)3 and the site can automatically show you the corporate rates, and any of your reservations you make are automatically synched up into Concur. Right after the booking is done, the system checks to see if it is in compliance with corporate policies. If not, an email is sent requesting the traveler to modify their booking. TripLink can capture substantial savings for companies, generally 10%-15% or more. It also means that now all travelers can be tracked.
TripIt lets users organize all their travel plans in one place. It is by far the most widely adopted tool that Concur provides. It provides a unified itinerary, the ability to share travel plans, flight alerts, mobile flight check-in, seat tracker, a LoungeBuddy partnership (if you are delayed, a $50 credit on the first Lounge stay), and more. In Q3, Concur is adding ‘Shared Trip Collaboration’ — when scheduling a meeting, the user can add email@example.com as an attendee. This allows all attendees (with permission) to see the other attendees’ flights, hotels they are staying, and so forth, saving a lot of back and forth emails and text messages that are typically used to coordinate the multiple participants of a meeting.
Concur Labs works on innovations for two to five years out. The lab builds prototypes, brings them to customers for feedback, and surfaces innovations from across Concur. For example, their global hackathon last year had 400 people in 99 teams around the world submitting and prototyping ideas to improve Concur’s products. They flew the top 13 finalist teams to Bellevue and then declared a global winner, which became the trip messaging functionality in TripIt.
At Fusion, Concur Labs demonstrated a virtual reality interface showing a big virtual globe for duty of care. You could see where all the employees travelling around the globe were and zoom into an area where there was danger, such as an earthquake, then use this virtual interface to initiate communications. Not all of these ideas will see the light of day, but it is a good way to experiment and innovate.
They also talked about SAP’s portfolio of bots, such as SuccessFactors’ ‘Conversational HR’ bot, which could be used for requesting a vacation. Or SAPs Copilot, built on Fiori. Once the bots become mature enough, each in their own domain, Concur and other parts of SAP hope to eventually make the bots work across domains. Concur Labs is also working on a proactive bot4 that knows your needs before you ask.
Plenty of Headroom for Growth
At the opening keynote session, Concur’s President, Mike Eberhard, cited GBTA5 statistics showing that the worldwide business travel industry is $1.3 Trillion today, growing to $1.6 Trillion by 2020, representing the second largest ‘controllable expense’ after payroll, for many companies. That is a big industry by any standard, and means there should still be plenty of room for growth for Concur. Eberhard also pointed out that beyond creating efficiencies and saving money, Concur has the opportunity to impact employees’ safety, well-being, and quality of life. Along those lines, since I first met Steve Singh (and well before that), Steve has articulated a clear vision about creating the perfect trip. This provides an inspiring goal for Concur, and that vision continues to be a driving force behind the journey they are still on today.
1 Small and Medium Businesses — Return to article text above
2 HX Global is part of Helix International — Return to article text above
3 Typically, travelers are encouraged to link their online accounts into Concur at the time they submit an expense report that has direct-booked travel in it. ‘Encouraged’ can mean they don’t get reimbursed until they do that, or can be a gentler reminder. — Return to article text above
4 For now, they are calling that bot ‘Sandy Parker.’ The real Sandy Parker is Steve Singh’s executive assistant. I’ve met her, and Sandy is really on the ball, anticipating Steve’s needs and choreographing all the moving pieces needed to take care of them. The Concur Lab folks have set a high bar for themselves by using that code name for the project! — Return to article text above
5 Global Business Travel Association — Global Business Travel Spend Topped Record-Breaking $1.2 Trillion USD in 2015, Will Reach $1.6 Trillion by 2020 — Return to article text above
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