Concur's travel and expense management solution offers cost savings and transparency to corporate clients. The product enables flight details, electronic data feed from hotel (the number of nights, taxes, F&B, laundry, watched movies), etc, to be electronically fed into expense reports and integrated with the company's financial systems. By Sudipta Dev
US headquartered Concur, that has been providing integrated travel and expense management solutions to companies worldwide has recently entered into a partnership with Cleartrip. The partnership is at two levels – while Concur is investing $40 million in Cleartrip and will have a minority interest in the company, there is also a business partnership that involves integration of products and marketing initiatives. Concur's expense management solution will be integrated with Cleartrip for Business to offer great value to the OTA's corporate clients.
Nasdaq listed Concur has operations in France, Germany, UK and Japan. Concur's solution is being used by 15 million people across the world - for expense management the company has 80 per cent global market share. “India is an amazing opportunity. For me there is a personal side to it as well as I was born here. We found that the travel industry in India is a very complex market and we thought of finding a great local partner. I spent a year meeting many interesting companies. When we met the Cleartrip guys we found that their view of business and technology model approach was very similar to ours,” says Steve Singh, chairman and CEO, Concur. He points out that in a global setting every company has to look at every dollar or capital to see how they can spend it better - to improve their products or serving their customers better, not on building their own travel processes in their company.
Cleartrip for Business was started two-and-a-half years ago and and the OTA is very focused on the corporate segment. Both companies have been in talks for the last one year. “We started to explore what their business was about, what their model was with expense management. They are doing this business for the last twenty years - Steve here and his learnings having built the business for the last two decades, having gone through various cycles, changes in business models and technology - that was exciting for us. Having that kind of perspective in our company was important,” says Sandeep Murthy, chairman, Cleartrip. Only 10 per cent of the travel market is managed in India so their focus is on how to effectively manage the unmanaged segment that is almost 90 per cent.
There are very large companies at the top and then is unmanaged travel among small and medium businesses followed by the large consumer market. Individual travellers and consumers are at the bottom of the pyramid. “If you add a little bit of reporting you will be amazed by the initial value you will be able to get. Provide a little bit of MIS and expense management and tell people this is where you can save money and reduce the process cost for them, you can add even more value,” mentions Murthy, pointing out that the partnership is about how to attract the entire value chain - from consumers to corporates. The key factor is the value proposition, which also includes price. “We have to ensure that we do very good price proposition, to do that we need scale,” adds Murthy.
Corporates have many different problems related to different aspects of the value chain in travel. This relationship will start solving more of the problems. “When problems are solved their propensity to use the service increases,” states Murthy. It will also create a new direct channel for suppliers to establish a relationship with the corporate segment. “We will work with the supplier whether hotels or airlines, on how best to use that. Concur is the largest company in the world for expense management. It has a lot of impact on us as a company, for corporate expense management and travel market in general is huge - so the proposition we will offer to our customers is unique. We provide a very unique manner in which suppliers can reach out to customers.”
Concur Expense is a SaaS (Software as a Service) based model. Giving information about the product and its process Singh says that today when you book travel there is no reporting on expense management. This product enables flight details, electronic data feed from hotel (the number of nights, taxes, F&B, laundry, watched movies, etc), to be electronically fed into the expense report and integrated with a company's financial systems. The bills are paid from the company's bank account. All the process - from booking to financial reporting and analysis is done through a single software product that is online. Integrated with Cleartrip, the corporate customers who opt for it will be directed to the website and can start using it. Business travellers do not have to file expense reports. It also leads to more transparency and saves on cost.
In defense of cloud computing
Corporate customers have to just go to the url to avail the service. Singh elaborates on the power of cloud computing, “Cloud computing is the biggest single wave in technology in 50 years. It brings down the cost of computing so low that even a one person company can afford it. That's why it will be pervasive in all the economies in the world. A one man company can access software that is as good as General Motors. He just has to pay monthly rentals. In India in the next 20 years you will be surprised if you see anything other than cloud services.”
Security has always been a concern area as far as cloud computing is concerned with enterprises wary of sharing their critical data on the platform. Singh however points out that 15,000 corporations use Concur's cloud - from biggest to smallest organisations, including financial companies like the American Express, Credit Suisse, Duestche Bank and Goldman Sachs. “All these have massive security departments and use our software - as it turns out cloud computing has more sophisticated security protocols than traditional enterprise software. Because all our business is in the cloud we have invested in best security protocols that are beyond anything most companies do,” asserts Singh. As cloud computing will become pervasive in India, he wants to be involved with some of the best companies in the early stages of development of the market.