ExpenseMatters : The Source for Expense Management

Interview with IBM

By on January 12, 2010 in Interviews with 1 Comment

ExpenseMatters.com Interview Series by Cary Strange: Interview #13 – IBM

As we conclude our comprehensive executive interview series on expense management, we have invited one of the largest and most respected companies in the world to talk about their involvement in the industry. Ted Capeless of IBM is joining us. Ted, thank you for taking the time to discuss some very important industry questions with ExpenseMatters. Most of us are very familiar with IBM, but to get started, could you provide some basic information about IBM and your involvement in the expense management space?
With an enormous employee population worldwide and a vast array of clients located in every corner of the globe, it’s no surprise that IBM is one of the world’s largest traveling organizations. In 1991 we released our internal automated expense management solution. Since then we’ve continued to build upon its proven platform to become a leading provider of flexible travel and expense (T&E) reporting solutions for more than 500 worldwide organizations. In fact, we manage more than US$3billion in travel spend and process more than 15 million expense reports annually. By partnering with us, we help companies proactively reduce their travel spend and lower related costs by optimizing their business processes, including T&E, through a combination of innovative technology, unmatched expense management expertise, world-class global support and superior delivery capabilities in services and software. Our scalable expense management solutions are designed so that organizations of virtually every size can take advantage of global opportunities and optimize processes end to end, helping to lower T&E administrative and procurement costs from 50 to 75 percent, proactively reduce compliance-related spend between two and four percent, and significantly improve expense reporting audit capabilities.

IBM Global Expense Reporting Solutions (GERS) is an easily implemented, easy-to-use Web-based application that simplifies and manages employee T&E processes. Innovative automation and imaging tools enable users to submit expenses and e-receipts using mobile or other device types for easier report reconciliation, receipt tracking, and authorizations and approvals. And our business intelligence and data analysis tools help detect fraudulent expenses and track abnormal behavior patterns.

What do you recognize as your primary and secondary target markets, and why?
Four out of the top 10 companies on the Business Travel News 2008 Corporate Travel 100 list* use IBM GERS for their expense management solution. With our global, multinational presence that spans many industries and market segments, a large number of our clients are large, Fortune 500 enterprises that look to us to help them achieve even deeper business transformation with a common platform and broader capabilities including in the arenas of finance and administration, human resources, customer relationship management and supply chain management. Because GERS is a highly scalable solution with attractive, pay-as-you-use pricing that can work in virtually every business environment, we are also strongly focused on – and well-positioned within – the mid-market segment. In fact, 80% of our clients are mid-market size, with as few as 50 employees.

It appears that there are quite a few players offering expense technology solutions. What separates your company from other companies providing similar products & services?
In the late 1990s, IBM began moving from an ineffective, highly customized services delivery model toward a more strategic approach to providing information technology and consulting services. To stand out from other service providers, IBM focused on ways to differentiate itself and create greater client value by reinventing its services model and expanding it to cover everything from congestion management, healthcare analytics and supply chain transformation. IBM deliberately embraced an innovative, technology-based approach that included a strong emphasis on automating labor-based services processes and began acquiring companies (such as PricewaterhouseCoopers Consulting in 2002 and Cognos in 2007) that could help fully achieve this goal and help us build repeatable software assets. IBM leadership also began steering our internal research organization to focus on developing solutions for our clients’ complex optimization problems as well as restructuring IBM’s software division by industry, to help those clients meet their specific challenges. These efforts have paid off for IBM’s services business, allowing us to move from one-time, customized solutions to a longer-term solution approach based on a foundation of industry best practices, expertise, technology and intellectual property along with the capability to deliver with standardized consistency on a global scale. In fact, IBM services revenue now accounts for nearly 60% of IBM’s total revenue and services growth continues to increase 18 out of the last 19 quarters.

Because of this solid history of proven, successful service delivery across many industries, we are widely recognized as one of the world’s leading providers of both services and technology-and our clients are confident knowing their expense management solution is innovative, tested and delivers on its promised results.

What are some specific key product differentiators that provide you with a distinct advantage over your competitors?
Unlike some of our competitors, IBM’s vendor-agnostic expense management solution has been tested for decades. Built on a highly standardized business model and open architecture backed by our industry-leading services and software, GERS stands out from the majority of expense management solutions because it can integrate with virtually every existing system. IBM continues to help set the standards for best practices in expense management enablement with GERS capabilities, including paperless T&E processing as well as ongoing innovation in travel reservation and mobile platform integration. GERS is also specifically designed to meet the needs of our clients with a flexible, vendor-neutral approach to corporate card partners. Plus, unlike some of the smaller, newer companies offering expense management solutions, each GERS implementation is backed by IBM, a highly respected company that has been in business for more than a hundred years.

A key advantage of GERS is its unique business intelligence capabilities that helps organizations to reduce travel spend before it occurs. These data analytics tools – combined with the strength of our well-established vendor relationships – help clients to select and better manage agencies and negotiate and maintain cost-effective supplier contracts. The GERS business intelligence toolset also contains proprietary predictive analytics that can also track out-of-policy patterns, helping companies to more easily identify fraudulent behavior and adhere to compliance requirements. Currently available in more than 85 countries, GERS is a true global solution, with local currency conversion and supporting more than 40 languages and applicable tax and other legal/fiscal considerations. IBM is also distinctly different from the majority of other expense management providers because our technology provides access to metrics that allow us to predict with confidence the outcome of our solutions. This means we can fully stand behind every expense management solution with a contractual commitment to the expected business outcome.

What are the most important questions that a company (looking for a solution) should ask before selecting an expense management provider?

  • Before entering negotiations, you should have a clear understanding your expense management objectives, timelines and what you consider to be an acceptable outcome. You must then clearly communicate your needs and expectations so that your service provider can work with you to develop the right solution.
  • Be prepared to ask your service provider to demonstrate the estimated travel spend and operational cost savings the solution is projected to deliver, and get it in writing.
  • Ask whether your service provider offers other services that could help position your company for growth, now or in the future.
  • Know whether the leadership in your organization is ready to move from a tactical to a more strategic relationship with your service provider.
  • Understand-and get it in writing-what the service provider’s commitment is to ongoing support.
  • If your company is subject to regulatory requirements, understand how the service provider’s solution can help you easily meet compliance mandates as they evolve.
  • Request that your service provider demonstrate its implementation track record with client references. Once you get those references, make contact.
  • Consider whether your service provider’s solution is based on an open platform. Can it easily integrate with your existing systems? Are there restrictions regarding the partners, tools and travel vendors you can use? And is it a scalable solution that will meet your ongoing needs as your business contracts or expands?
  • Know how many third-party providers will be involved in your organization’s solution. Many providers rely on one or more third-party providers to deliver their solution, which can dilute the overall quality of the implementation.

One of the most frequent questions we receive involve how the products are licensed and installed. What are your thoughts regarding the traditional licensing model versus the software as a service model (SaaS)? Which does your company provide and recommend?
We try and work with organizations to help them understand which model will be the most cost-effective and beneficial for their business over the long term. That said, in the past few years IBM has become a recognized industry leader and strong proponent of the software-as-a-service (SaaS) and cloud computing-based models. The flexibility of a SaaS approach allows for easy Web access to the expense management interface, faster solution implementation and less maintenance costs by eliminating multiple, disparate operating systems. With this on demand, services-based approach clients also typically experience easier adoption of new technology. And with an efficient, predictable pay-as-you-use cost structure, it’s more cost effective.

Do you have any new customer or partner wins that you want to share with our audience? If so, why did they select your company or product?
Our newest partners include travel vendors GetThere and Travelport. We believe these companies chose to collaborate with IBM, a trusted, established provider and industry leader who could offer a proven best-of-breed solution.

We are continually working with new clients in virtually every industry who believe in our commitment to delivering an automated, easy-to-implement and easy-to-use T&E reporting solution with GERS. (If you need more information about a solution for your particular industry, please contact us.)

This industry has been in a high growth mode for a couple of year now. What do you see happening with the industry, and the need for these types of solutions, over the next 12-18 months?
We fully expect the high growth to continue as there is still a large percentage of companies that have not yet adopted automated solutions, and the corporate directive to “do more with less” combined with an uncertain global economy has suddenly made expense management much more relevant. The industry and the solutions will continue to mature and evolve-just as we have seen mobile solutions and travel reservation integration become fairly standard for competitive expense management solutions.

Many companies still operate in silos with the travel, expense and sourcing departments all operating independently, but the trend of corporations moving to end-to-end solutions has already started. As more companies see travel more holistically, these three areas of the business will become more and more closely aligned. End-to-end travel and expense management is not just about tools but also about seeing the entire travel process while being able to bridge the gap between policy, booking, travel, expense reporting, reimbursement and travel sourcing.

Companies are quickly looking to strengthen their relationship with service providers rather than be kept at a distance with a software solution they are left to run themselves. Solution service providers should be experts in travel and expense management with respect to policy, sourcing and global expertise. As the largest traveling corporation in the world, IBM naturally has all of these attributes to offer and we leverage this expertise to the maximum benefit of all of our clients.

(* See www.btnonline.com and the study titled “The 2008 Corporate Traveler” for more information.)

Ted, thanks again for your joining our interview series. If any of our readers have any questions or comments, feel free to contact myself or IBM directly:
Ted Capeless
Client Solutions Executive

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  1. slimcane says:

    I have used GERS with two different companies now. The product states that saving paper is one of the benefits. I would argue that point. I still have to manually copy all receipts at the copy machine to then fax in a stack of Transmittal Page documents that the GERS system generates. My last expense report was 15 pages that had to first be printed such that then I could send the fax to our GERS system. Typically my expense reports are 5 to 6 pages with 3 of those being “Transmittal Page” documents from the GERS system itself. Paper savings is not a reason to use this system.