Mike Hilton, Concur’s co-founder and executive vice-president of worldwide marketing, speaks to ABTN about the acquisition of UK company Global Expense, the challenges of European expense management and why travel managers shouldn’t be afraid of mobile technology.
Why did Concur decide to buy Global Expense?
Global Expense is a company that has been in the market for many years and they’ve always been a very strong competitor to us in the UK. A strong team and a strong set of complementary product and service offerings were the two primary reasons that this was a great acquisition for Concur. We think it really complements our existing solution set for the UK in particular, and we also believe that a lot of their services have applicability for us throughout the entire European theatre and perhaps beyond. The marrying up of both companies’ product sets is going to benefit both sets of companies. And lastly, I think this is very consistent with the last few acquisitions that we’ve done, in really extending our existing mission and allowing us to accelerate growth.
You mention Global Expense’s expertise could be transferred into Europe. Could you be more specific?
They had a set of receipt services that were very complementary to ours. They solved the receipting problem in a a different way than we had, but Global Expense’s reach has historically been primarily in the UK. What we believe is that we can take their receipt service capabilities and that they have applicability to other markets in Europe other than the UK. We think there could be real opportunity to extend those services to Germany, France and all the other theatres that we’re in in Europe.
Can you tell me exactly what it is that is different about their receipt services and yours?
They have a receipt-based service where receipts are physically mailed to a processing facility, so they have taken more of an outsourced solution for receipt handling. It means employees can simply gather all of their paper receipts, stick them into a bag and mail them to a processing facility at Global Expense. There is a great deal of audit and logic applied to them, and a lot of the things such as VAT are handled automatically, whereas at Concur a lot of our receipting services are more focused on the employee doing some of that entry.
Would that be something you would look to introduce in the US?
That’s something we’re going to evaluate. We think that the first real opportunity here is in Europe. I think in general in the US today, the need for paper receipts is much less than it is in Europe. In Europe paper receipts are still required for things such as VAT reclaim and in the US you just have much less need for that, where credit card transactions are considered valid receipts for expense reimbursement purposes.
One of the innovations that Concur has introduced that is still more prevalent among US vendors than international vendors is the ability to provide electronic receipts directly into the Concur solution. Major hotel and car hire providers send out electronic receipts for expenses that are incurred through Concur. We have less of a need for a service like this today, but it’s something we’re going to evaluate for applicability.
Is the European market more complicated than the US market?
In general, I would say yes, due to the fact that you’ve got several countries that all have different tax and regulatory standards to deal with. You’ve got VAT reclaim as a great example of something that makes things a bit more complex.
Does it make the expense management process in Europe more difficult and expensive than it would be in the US?
Yes. As an expense management provider I would say that the value than can be obtained through automation in Europe is much higher, because of the complexities and particularly if you’re a multi-national company. Very very particularly. Obviously in Europe it’s hard not to be a multinational once you reach any sort of size, so the need for automation and the value that automation can provide is quite high.
How will Global Expense's technology integrate with Concur's? Will Global Expense's customers be transferred onto Concur technology, or stick with GE technology, or will it be a mix?
We’ve done several acquisitions of companies with overlapping technologies in the past and I think we’re going to approach Global Expense in a similar manner to others that we’ve done. What we’re going to do is not touch these Global Expense customers today. We’re going to honour their existing contracts, we’re going to keep them on the same technology and our intent is to take the best of both technologies and to come up with the best of both worlds. Over a period of time we will migrate our customers to a common solution. It will happen over an extended period of time and it will happen in a way that makes sense for the customers as well as for Concur.
Are you looking to make other acquisitions in the UK or in Europe?
This is our second acquisition in Europe. Two years ago we acquired an expense management provider in France called Etap Online. I think that we’re always looking for opportunities that fit within our existing objectives. It will help us accelerate those objectives and I think there are still opportunities in Europe that could potentially do that. It’s something that we’re constantly evaluating. I guess the best answer is we may do more acquisitions. It’s an ongoing process. If you look at our history over the last five to seven years you’ve seen us grow primarily through organic growth and we’ve augmented that with some strategic acquisitions. I think that trend will continue.
On the theme of acquisitions, can you tell us about why Concur acquired Tripit, at the beginning of 2011?
I think for us Tripit was a very strategic acquisition. We had been watching them for a few years and they had done something quite unique in the travel space. I think they were really at the forefront of a wave that we see as a trend in the industry, which is that the business travellers are increasingly becoming a major stakeholder in the corporate travel process. This is a really new development. If you look historically at business travel, it’s been a pretty top down corporate driven process, meaning that if you’re an employee joining a company, the company is going to dictate how you travel for business. They’re going to tell you which tools to use, which airlines you can fly, which hotels you can stay at. And if they’re goig to give you any tools to help you manage your travel it’s going to come from the company.
I think the interesting thing that Tripit had done is create a tool that was just for the travellers. They had taken full advantage of this revolution in smart phone adoption and really created this novel way for travellers to take back control of how they manage their travel for them. A real trend we see at the moment is the consumerisation of the enterprise – Tripit to me is a prime example of how that’s happening. You’re basically seeing the individual become a much more important person, using smart phones and all of these amazing apps.
We saw Tripit had a mass of several million users that had a large overlap with Concur’s users. The marrying up of Tripit and its amazing mobile trip management capabilities, that are very much focused on the end traveller, with our existing travel and expense management solutions was a combination that just made sense.
The other element of Tripit, which is a big part of its success, are its social capabilities. Is not just the ability to manage your trips while you’re on the road, it's the ability to share your trips with family, co-workers or friends so people have access to your travel plans. Concur has been espousing for the last few years that we think that mobile devices and smart phones are a really big game changer. And if you don’t have a huge investment in having the best smart phone capabilities possible for your solutions you’re going to be left behind. We not only have invested in our own smartphone solutions, we thought this was a really important piece of the overall puzzle in order to round out our solution set.
Some travel buyers and managers are nervous about travellers taking control of their own travel decisions and using social media and various apps which they don’t have control of... What do you think about this attitude?
I think that the answer is to let travellers use the tools that they want to use, because the honest truth is they’re going to use them whether you want them to or not. That’s what the smartphone has done. If you have a philosophy of resisting it or being afraid of it, it’s going to happen anyway. Travellers have these devices, they have access to these apps, they’re going to use them because they’re great apps. I think the key is to let them use them, but to integrate them with the tools that give you the control and compliance that you need as a travel manager. That for us is why Tripit was so important. It’s a great tool. Travellers love Tripit.
I believe that travellers want to do the right thing. Travellers aren’t looking to go around your policy. What they want is to have the tools that give them a great experience while they’re travelling and let them do the things they need to do. I think think travel managers or buyers shouldn't be afraid of these tools. They should try to work with these tools in a way that still gives them what they need, which is the control and compliance to their travel policy. We’re trying to build a set of solutions that do exactly that. Let the traveller do what they want on the device, but let the buyer have the control and compliance in the corporate solution, and let the two integrate really nicely with each other.