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Expense management solutions: Things are getting interesting

 

expense-management-solutionsIn Q4 of 2015 PayStream Advisors released its inaugural Travel and Expense Navigator, capping an exciting year in expense management. According to the firm, which has been working with companies to select and implement expense management solutions for more than 14 years, this is the first such analysis of these solutions. We believe that this report will become an invaluable resource for the increasing number of firms looking to automate this function. However, what we’re most excited about is its very existence.

 

This is a market that has been evolving rapidly, and the publication of this report signals that we’ve reached a tipping point. Companies of all sizes now have real options for taking the pain out of what has long been one of the most universally hated business processes. We’ll be hosting a webcast on solution evaluation with PayStream on February 23rd. Here, report author Jimmy LeFever shares his perspective on how this market has changed, and what that means for companies.

 

Coupa:
This is the first report of its kind for this solution category. Why now?

 

Jimmy:
We've seen a substantial growth in the number of organizations that are interested in automating expense management. There have been significant technology advances in the space. The only other ranking of expense management solutions that's out there is based on end user reviews. We saw that there was a definite market need for this sort of report, and since this is one of our strongest niches we thought this was a good area for us to contribute.

 

Coupa:
What are the changes you’ve seen in this market that most stand out for you?

 

Jimmy:
Using mobile devices for business applications was not happening 14 years ago. The mobile phone has become a necessary tool for business, and not just a consumer tool with consumer applications.

 

Coupa:
Is the increasing number of applications driving increased interest in automating expense management?

 

Jimmy: It’s not just expense management. Over the past 15 years, we've seen an uptick in interest in automation primarily from Fortune 2000 organizations looking to replace a broken ERP solution. That includes AP automation, electronic procurement, electronic sourcing, all the different finance back office processes.

 

The middle market has also greatly increased adoption and is far more interested in cloud-based back office business applications than they were 10 to 15 years ago.

 

And, many providers are offering multiple solutions. So maybe an IT manager or a CFO hears about AP automation, or procurement automation, and through those providers, they hear that there are also solutions for expense management. It's sort of a snowball effect.

 

Coupa: It sounds like this aligns with a larger overall trend you’ve called out in other reports, which is the cloud is bringing automation to a smaller-sized businesses.

 

Jimmy: That's right. But I think the biggest driver in this market is to make expense reports more effortless, so that highly-paid, highly-skilled business travelers aren't spending valuable time on expense management. A secondary driver is visibility into spend. Overall, the trend is to get a more holistic view on spend management.

 

Coupa: What are you seeing in the way of technology innovation?

 

Jimmy:  Some providers are just looking to automate expense management, but some are tying expense management in with all types of employee spending, and integrating with other back office processes for a more holistic approach to managing spend. I have seen a lot of innovation from some of these providers. Coupa is definitely one of them.

 

Coupa:
Were there any big surprises working on this report?

 

Jimmy:
Well, what’s interesting is that in no other business software industry that I know of is there one provider that controls what we estimate to be almost two-thirds of the market share. Concur was a solid 10 years ahead of pretty much every other provider for a long while just because they had been around longer. Almost every other provider has caught up with them or surpassed them in terms of functionality and capability. But they had the market to themselves for a long time.

 

Coupa:
What does this proliferation of solutions mean for this market? Is there something for everybody here?

 

Jimmy:
Yes. There's absolutely a solution for pretty much every organization. There are close to 40 solutions we've identified in the report. We chose the top 11 we could stand behind to score. We were familiar enough with their products to know that they were a viable solution for a number of different organizations. They had experience. They had resources. They've had successful rollouts with a certain threshold of organizations.

 

Coupa:
What do you see ahead for expense management solutions?

 

Jimmy:
I can tell you the direction that our Navigator is taking. We are eliminating the travel component and making more a holistic Spend Management Navigator covering all types of employee spend.

 

The travel booking component, pre-trip approval, those sort of functionalities are becoming commoditized. Solutions either connect with any travel management provider, or none at all. That’s no longer the focus. Providers now have to differentiate themselves on not just how simple expense report creation can be, but also the reporting, analytics, and visibility that the solution provides. It's not just expense reports from trips . . . it's spend management overall, any expense that an employee creates.