Consumer-grade Solutions Leading the Charge
For many products, ‘industrial-grade’ equates to higher quality and durability, whereas ‘consumer grade’ denotes cheaper design/materials for lighter use. However, in the world of technology, products aimed at consumers are the ones continually pushing the envelope with faster graphics, higher resolution screens,1 and especially with more intuitive user experiences. Consumer products’ user experience has to be great to drive the adoption needed for the company to survive and thrive. Years ago, I attended a talk by Adam Goldstein, the founder of Hipmunk (travel search/booking site) where he talked about his approach to starting the company.2 I went online to check out their site and found the way it presented the options and let me book flights was so much better than any of the other travel sites I had been using. Since then, it is the only platform I use to book travel. That is survival of the fittest in action for consumer sites and solutions. When we find something better, we switch in a moment and never look back.
In contrast, with company-wide enterprise software such as HR, finance, procurement, travel and expense, and so forth, enterprises tend to commit to a specific solution for a long period of time and don’t switch so easily. Partly for this reason, enterprise solutions have been able to get away with some fairly difficult-to-learn products, requiring many days (or even weeks) of training. That may have been acceptable for solutions that were only used by a few specialists for their full-time job. But it is increasingly unacceptable for software that needs to be used broadly across a company, especially if it is used only occasionally, such as HR self-service functions for employees, catalog searching and submitting of requisitions, and travel and expense solutions. In those cases, wide adoption (ideally approaching 100%) across the enterprise is needed to ensure that full value is being realized from the solution. Because we have been spoiled by the likes of Amazon and Apple, we have gotten used to super-intuitive applications and increasingly expect a similar level of ease-of-use and intuitiveness at work. This has been referred to as the consumerization of enterprise software.
Rob Enslin, Member, Executive Board, SAP SE and President of SAPs Cloud Business Group (Concur, Ariba, SuccessFactors, Hybris, and Fieldglass), said during his opening keynote at the SAP Concur Fusion conference this year that “Customers are more and more sensitive to the user experience. Employee satisfaction is an important KPI. Applications of the future have to be consumer-driven, hiding all of the complexity, leveraging AI and search — Wouldn’t it be awesome if employees could use Concur for their personal lives as well.” Actually, some Concur apps are already used in people’s personal lives: both TripIt and Hipmunk originated as consumer apps first. Those acquisitions and the talent they brought with them are an important part of growing Concur’s consumerization capabilities.
The Expense Report That Writes Itself
SAP Concur understands the importance of consumerization in its overall strategy. Concur has long had a mission and vision of enabling ‘the perfect trip,’ a key part of which is the ‘expense report that writes itself.’ Each year they make more progress towards that ideal. If Concur has an itinerary for the trip, then they have information required to correlate specific expenses with specific trips: start and end dates, destinations, meetings, etc. Concur acquires knowledge of specific itineraries in two different ways: 1) via TripIt (SAP Concur’s travel organizing app that lets end users simply forward confirmation emails from airlines, hotels, rental, etc. to build an itinerary); 2) from SAP Concur’s TMC partners (Concur integrates with over 100 Travel Management Companies). Eventually they will also be able to infer itineraries from a user’s calendar.
Once Concur has the itinerary, the key to a self-writing expense report is the ability to capture, categorize, and process all receipts as automatically as possible. Here Concur takes a multi-pronged approach to receipt capture/categorization:
- TripLink — TripLink’s main purpose is to capture and manage bookings across multiple channels, including those done directly with suppliers. It also sends receipts automatically to Concur and adds them to your expense report. An expanding network of partners (airlines, hotels, rentals) are integrated into TripLink.
- App integration — Over 150 apps are available in Concur’s AppCenter, including ride/rent apps (e.g. Uber, Lyft) and Concur is integrated with some brands’ own apps, such as Uber and Starbucks, which automatically send an e-receipt to Concur each time something is purchased.
- Email receipts — Users can forward email receipts to Concur. In the future, Concur may automatically scan the user’s email for receipts, provided user privacy concerns can be addressed. Concur has machine learning that is able to interpret more and more receipts, including categorization of items into the appropriate expense category.3
- Physical receipts — Users can take a picture of any physical receipt. Concur is developing machine learning (more sophisticated than traditional OCR) to interpret receipts, including handwritten receipts as well as receipts in foreign languages.
- Credit card transactions — Credit card transactions can also be automatically sent to Concur, though credit card processers often take several days to settle and send the transaction. This delay is outside of Concur’s control and means the expense report cannot be immediately submitted without potentially missing some of these expenses.
With this combination, a user just forwards confirmation emails and takes pictures of physical receipts. Even those steps can be avoided if all purchases are done via credit cards, Concur-integrated apps, or TripLink enabled sites. Once all receipts have been collected, a draft expense report is presented to the user. This may include questions about whether specific credit card transactions belong on the expense report. As Concur AI becomes more sophisticated, and they build out integrations with travel and other providers, we get continually closer to the ideal of a touchless process for submitting expenses. This is a journey that takes years, but the UX continues to improve.
Compliance vs. Choice for Travel Expenses: Using AI/ML to Move the Efficient Frontier
In the world of travel and expense there is a balancing act between control of expenses (for the managers) and ease-of-use/choice (for the end user). Financial managers and travel managers would like to tightly control how and where travelers book their trips and which providers they use. However, travelers (being human) want a quick and easy process, with a minimum amount of time jumping through hoops to get travel booked. And they often choose their own way to book travel, bypassing corporate travel booking systems and processes, resulting in a loss of visibility and control for travel managers. SAP Concur is trying to give back that visibility and control, while simultaneously giving users more choice and a better, easier user experience — i.e. move the ‘efficient frontier’4 (or zero sum game) of control vs. choice.
They already do some of that in a number of ways, such as their TripLink partnerships which lets users book travel directly on airline, hotel, and rental providers sites, while still providing visibility and control to the travel manager. Now SAP Concur is applying AI and machine learning for example, to enable the end user’s smart phone camera to automatically recognize when it sees a receipt, extract the data, and directly populate the expense report. They are also developing AI/ML to auto-generate travel requests based on knowing what meetings are in your calendar, estimating the travel cost and taking into account the remaining travel budget. Many of these AI/ML innovations are being worked on now by SAP Concur in collaboration with their customers.
Going After Small and Medium Businesses (SMB)
Although Concur started by serving large enterprises, they have for many years invested in growing their small and medium business customer base as well. In fact, this is the fastest growing part of their business. Concur Invoice in particular has had very robust uptake by SMBs.
SAP Concur is trying to accelerate time-to-value, starting from the time a customer becomes aware of a need to when they are achieving results and growing their savings from the system. For example, SAP Concur is working on simplifying onboarding with prebuilt connectors to QuickBooks, NetSuite, Sage One, Microsoft Great Plains, and Intacct; guided setup based on reading the customers’ QuickBooks or ERP configuration to offer intelligent defaults (e.g. automated mapping of expense codes to their chart of accounts and other mappings); automatically offering policy suggestions (increasingly based on machine learning); and API integration with Amex OPEN. One goal is to maximize the ease of self-service, from initial education, through implementation.
SAP Concur has been negotiating special pricing with key partner providers of travel and other goods and services, leveraging the collective buying power of their SMB clients. In addition, they plan to provide benchmarking services, so SMBs can see how their company stacks up against peers in their industry. The ability for Concur Analytics to surface specific policy recommendations for SMB clients will be available next year.
Hipmunk for SMBs
Hipmunk for SMBs takes their successful consumer version and makes it available to small businesses. They aggregate their entire small business travel spend to get savings. It has the same Hipmunk UX that many of us have come to love, except you can see the special deals for small businesses that they have negotiated with airlines, hotels, travel agencies, and rental companies, as well as TripIt Pro integration. Hotel results are shown on a map, integrated with the user’s calendar to show their meetings and distances to the hotel on the map as well. When using Hipmunk with the preferred travel providers, the expense report will be prefilled with all the bookings. TripIt itinerary is auto-populated as well.
Hipmunk for SMB provides an integrated lightweight end-to-end managed travel experience for SMBs. It gives them savings through negotiated discounts, visibility, the ability to influence travel spend, and a set of tools for employees to make travel booking and expense reporting easier. It also helps with duty of care, providing better visibility into where your employees are. Thus, SMBs get many of the tools that were formerly the exclusive domain of larger companies.
An element of SAP Concur’s consumerization strategy is the ‘democratization’ of analytics. Years ago, analytic tools were only accessible to an elite group of statistical specialists. We’re beginning to see analytic tools become more useable and accessible to a much broader audience, often within the context of their daily work. SAP Concur has made analytics dashboards that are intuitive and easy to customize to fit each person’s jobs and way of doing things.
They make it easy to drag and drop and rearrange the various elements (aka ‘tiles) in the dashboard or to add new tiles. They have a searchable catalog of tiles with clear explanations and visual example for each one.
Standard and customized reports and dashboards appear on the user’s analytics home page. Concur also makes it easy to modify the data shown and the filters used on the data. For example, in Figure 4 below the user might filter the list of employees that show up based on their role, country, business unit or other filter.
Thus, users can easily create, modify, and explore simple analytics without the need for training or specialized skills. In addition, customized alerts can be created. For example, a manager might create their own alert to be triggered whenever a transaction over $5,000 occurs; or when they have reached 80% of their budget for the quarter.
Concur Detect, which utilizes AppZen technology, is an automated fraud and compliance detection capability built into Concur Expense solutions. Last year SAP Concur processed over 124 million expense reports and disbursed over $100 billion in expense. They have used this trove of data to feed and train machine learning algorithms that detect anomalous expenses that may be signs of mistakes, policy violations, fraud, and bribery. For example, if an employee expensed the same meal twice, weeks apart, there is a good chance no human auditor would notice it, but Concur Detect will flag it. They showed another example of a $324.50 expense for a restaurant called Ron’s Brothers, which Concur detected was a jeweler, not a restaurant. Or a receipt for an expensive bottle of whisky, hidden in a long list of receipts. SAP Concur says they are seeing savings of 1%-5% across total reimbursements and an 80% reduction in time to audit. Combining Concur Audit and Concur Detect, companies can do 100% audit (instead of typical 10%-20%) while focusing auditors’ attention on the items most likely to be problematic.
There is an increasing emphasis on duty-of-care to ensure employees safety and well-being. That is driving companies to keep closer track of their employees and put in place systems that monitor events around the world, quickly identify which employees might be at risk when an adverse event (natural disaster, war, infrastructure failures, etc.) occurs, and providing the ability to bi-directionally communicate with those employees to get them out of harm’s way. Concur Locate uses machine learning to predict where employees are using the vast amount of data they already have in the system, including itineraries/TripIt, meetings/calendar integration, credit card purchases, scanned receipts, TripLink, and integrations with Uber, Lyft and other providers. Potentially at risk employees can be identified and alerts automatically sent to them via email, text, or phone. Text messages allow two-way communication so that those at risk can quickly indicate whether they need help or are OK. In the future, SAP Concur would like to use TripIt as an endpoint to receive alerts as well. You need this ‘shotgun approach’ of many different avenues of alerts to reach someone, since you don’t know which media or method they will have access to.
The Power of the Network, Ecosystem, and an Open Platform
SAP Concur understands the power of partnerships and the network. They have worked hard to open up their platform and develop partnerships with travel providers (airlines, hotels, rental companies, TMCs) and related service providers. This has helped them grow globally, as they integrate with services from around the world. They also have over 150 apps in their App Center such as:
- Rocketrip – llows companies to share savings with employees who come in under budget. Rocketrip’s users spend in aggregate over a billion dollars a year in travel spend and are typically realizing savings of about 20%.
- EY Travel Risk and Compliance — EY has a group of people that keeps up on all of the latest travel, tax, and immigration regulations globally and provides tools to help travelers and managers be aware of compliance requirements and potential issues before the fact. In today’s ever-changing world of regulations and laws and rules, it is hard for any one company to keep up, so having a dedicated team of people at EY makes sense. The example they gave was two of their employees who travel regularly to Hong Kong on their passport with no issues. But one time they had to also make a trip to mainland China and the system advised them that a Work Authorization would be needed. Thus, they were able to apply for the necessary permit ahead of time and prevent painful delays or outright denial of entry.
- DiDi — This Chinese ridesharing service provides 25M rides/day, over 4X Uber’s worldwide volume of 5.5M rides/day.
- Taxback International — Businesses from EU and some non-EU5 countries can reclaim the Value Added Tax on travel to countries within the EU, which typically amounts to 5%-25% of the travel expense. Taxback International provides automated VAT reclamation with 1-click automation and “guaranteed 100% compliant” submissions.
- Dow Jones RiskConnector — This app screens entertainment and business meal expenses against a list of State Owned Company data to identify contacts who may pose anti-bribery or corruption risks.
This gives just a flavor of the richness and diversity of partners and services Concur has nurtured over the years. In addition, they are creating more web services interfaces in their core platform and expense, travel, Hipmunk, etc. to allow developers to create more richly integrated applications.
A Culture of Respect
Lastly, one of the things I like most about SAP Concur is their culture. I remember when I first met Concur’s founder Steve Singh, I was impressed by his warmth, passion, humility, and infectious enthusiasm for what he does. A lot of the respect and care he demonstrated for others is still evident in Concur’s culture. I believe that is one of the reasons many of its employees have been with the company such a long time, providing a lot of continuity and stability through the inevitable turbulence of acquisition and tough marketplace competition. I believe that has served them well and helped them continue to be the dominant leader in the T&E space.
1 For many years, enterprise technology markets have been ‘drafting’ on technology developed for the consumer market. In the ‘90s, I was an engineering manager at NEC Computer Systems Division. Our consumer PCs were always the first with the most powerful CPUs and graphics processor, the highest resolution screens, and the largest memory and disks. The same has happened with smart phones, which were adopted first by consumers and far outpaced the clunky enterprise handheld computers and devices (e.g. handheld scanners) used by corporations. — Return to article text above
2 Adam’s talk focused in particular on the concept of the minimum viable product (MVP). We extended the MVP concept to “Minimum Viable Implementation,” where you reduce as much as possible the initial goals of an enterprise software implementation project to the minimum amount you can get away with. This enables much more rapid implementation and agility for the company. We describe this concept in Agile ERP Implementation. — Return to article text above
3 This is non-trivial, given the diversity and uniqueness of charts of accounts for different companies. — Return to article text above
4 The efficient frontier was originally a financial portfolio management term, but has been used more broadly to designate a tradeoff between two competing goals. In supply chain, there is typically a tradeoff between inventory levels and service levels: if you decrease inventory levels (reduce cost), service levels decline. When you have the right magic (often via better data, analytics, and/or process improvements) to decrease inventory levels and increase service levels at the same time, that is referred to as moving the efficient frontier. — Return to article text above
5 Australian, US, Japanese, Canadian, and South Korean businesses can also reclaim VAT on travel to EU countries. — Return to article text above
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