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Tripped Up

Hard times and higher travel costs are pushing companies to enforce travel and entertainment expense policies, and more are using Web-based software to do it.

September 5, 2008
When times are good and sales are rolling in, it’s easy to ignore top performers’ spending habits, even when they exceed a company’s travel and expense policies. After all, it takes money to make money, right?

    But when times get tough and sales dry up, companies rein in their rainmakers. During the latest economic downturn, some have beat the higher costs of doing business by asking sales reps set up online meetings instead of flying to see clients in person.

    Other companies are opting to keep their road warriors on the road, but are making them stick to stated travel and entertainment expense policies. More are using Web-based software to make sure they do, says Christa Degnan Manning, an analyst with Boston-based AMR Research, a technology market researcher.

    Besides curbing spending, T&E software lets a company match what’s being spent with what’s coming in, data they can use to determine what’s working and what isn’t.

    "So if you have only so much in a travel budget because of the economy, you can decide where to use it versus using alternatives" like online meetings, Manning says.

    Traditional ERP vendors such as Oracle and SAP offer T&E modules. But more companies are opting to use online, subscription-based software from companies such as Infor, Concur and Workday, Manning says.

    Infor offers T&E modules for pre-trip authorizations, expense reports, payment requests and time sheets. Financial services company Raymond James reduced its reporting and reimbursement cycle by half using Infor’s T&E service, according to an Infor report. At pharmaceutical maker AstraZeneca, another Infor customer, the number of outstanding expense reports more than 45 days old dropped from 7,977 to 1,000 after the company started using Infor’s T&E service.

    The more companies watch their travel expenses, the more Web-based T&E software vendors have profited. Concur, a publicly traded Seattle company, saw revenue in the quarter ended June 30 jump 65 percent, to $54.9 million, on a big bump in T&E software subscriptions, the company reports. In July, American Express paid $251 million for a 13 percent stake in the company. Concur will use the money to expand its current base of 7,000 customers, according to a release issued at the time of the investment.

    The latest version of Workday’s Web-based ERP suite represents a breakthrough of sorts because unlike stand-alone programs, its T&E software is integrated into the rest of its offerings. "There are huge benefits of having all of that with just one user interface and one system," Manning says.