The IDC has published a report this month titled “The Business Value of SAP Concur Solutions for Optimizing Travel and Expense Operations” . Research for the white paper has been carried out by Kevin Permenter and Harsh Singh of IDC.
While the report has been commissioned by SAP Concur, and so naturally finds SAP Concur to be an expense management solution which has great value for businesses, the report also contains a lot of useful information regarding how the role of expense management is changing.
This week IgniteSAP will be providing a summary of the report with particular attention to what light it sheds on the development of SAP Concur.
It almost goes without saying that SAP Concur and the world of expense management applications are changing due to changes in the socio-economic environment. The prime reason for this is the global shift towards intelligent commerce and industry, with all of the associated technological changes: the proliferation of digital devices and end-points to the business network, greater integration across all business processes leading to the opportunity to find greater efficiencies in business operations, the move toward Software-as-a-Service and cloud provision.
This technological change is taking place in a business environment which is now fully investing in environmentally sustainable practice as the public now expects and selects products and services which can demonstrate environmentally sustainable credentials. This is far more obvious for products dealing with travel expenses, as carbon footprints for business travel need to be tracked, but also affects attitudes to expenses tracking and invoice processing.
Because society is (hopefully) finally emerging from lockdowns we have been through a paradigm shift in which the assumption of the need for business travel has been challenged as many employees were able to work entirely from home, and many meetings now take place over video calls.
So while travel for business is becoming necessary again, it will not be a return to the previous status quo.
Concur was originally conceived as a three-part integration of travel booking, expense management and invoice processing, which allowed finance teams to get a holistic view of spend, and simplify the expense reporting procedure. The white paper from IDC shows that while the fundamental value proposition of the company remains the same, the extent of data sources and the context for business has changed.
The report cites three key areas in which Concur can drive business value:
“Fostering greater business efficiencies in travel and expense management and providing significant time savings for professional staff”
“Increasing the productivity of finance and travel support staff responsible for processing business travel and expense reports”
“Enabling business travel savings based on the easier implementation of and compliance with organisational travel policies while also minimising data loss”.
These areas have not changed but the scale of the task and the way that business value is realised have changed in line with contextual pressures facing businesses.
Along with the most obvious recent change to business travel in the form of Covid-19 and the associated lockdowns, the report draws attention to other influences on expense management that have caused challenges for finance departments:
“Business Expense Mix is changing”
Advanced expense management capabilities are now more necessary to help organisations to deal with sudden shifts in the types of expenses, as with the forced shift to work from home. Deep integration with all other aspects of the businesses’ ERP systems will facilitate this agility.
“More Sustainability Features”
As we discussed above, the need to show compliances and a proactive role in addressing climate change is an absolute necessity. “Sustainability” in its widest sense can also refer to the health and welfare of employees, but the most direct way that travel and expense management solutions address sustainability is through carbon tracking, and reducing unnecessary travel.
“Higher Demand for Convergence”
Agility from integration occurs because centralised databases are made more accessible so that financial processes like AP, Expense, Tax, and Digital Payments become part of a more holistic budgeting and planning activity.
“Growth in Virtual Meetings/Events”
It is understood that meeting in person is best for generating rapport between businesses and customers or collaborators so the demand for that need will continue, but it is not absolutely essential any more. The substitution of face-to-face real-world business meetings with virtual meetings and video calls has now become universally recognised as a legitimate way to conduct business. Consequently budgets for travel will be subject to far more assessment in the future.
“Digital Payments Becoming Integral”
Digital payments systems are requiring new payment channels in order to simplify the payment process.
“Hybrid Working Models Proliferating”
Hybrid and remote working has added complexity to expense management, meaning finance teams now need to be able to adjust their auditing models and processes to suit a more fluid workforce.
The report goes on to discuss how the lack of agility among legacy T&E management systems pushed businesses to accelerate toward digital transformation of expense management. CFO’s now need more insight and control to deal with global events like pandemics and conflict. By moving away from legacy T&E systems managers are “reducing risks of noncompliant travellers or out-of-policy expenses by minimising manual manipulation of data”.
The white paper recommends a connected platform ecosystem where T&E solutions are connected to the system of record and external data sources. This means that CFO’s will have access to a more complete view of the business.
“By connecting business applications with budget tracking and pre-approval functions, organisations can proactively control spending before it happens and reduce noncompliant spending. With analytics and reporting tools support, business leaders can use accumulated data to drive policy changes and configurations to enhance compliance.”
When the CFO is given more information and control over strategy across T&E, ERP and CRM systems with intelligent and predictive processes, they can optimise and scale employee spend management: leading to improved agility and resilience.
When organisations have adopted intelligent and predictive processes that are integrated end-to-end they enable real-time analysis of spend. These data insights allow for continuous improvements and unlock time-saving measures like the use of virtual assistants, automation and machine learning.
The IDC report was based on the results from interviews with managers from organisations using SAP Concur Travel and Expense in a variety of sectors, including: “healthcare, retail, communication and media, energy, financial services, manufacturing, and travel and hospitality”.
Participants recognised the importance of keeping a close eye on T&E operations and employee spend which can be one of the most significant areas of cost to a business. The move away from manual expense approaches to integrated and automated methods reduced reporting time and errors: improving the T&E workflow. One of the advantages found to be specific to SAP Concur was the ease of use and the ability to scale the T&E operations to match the organisation’s rate of growth.
One director of financial systems in a media company highlighted the easy adoption and ease of use of Concur in comparison with other systems:
“First, we purchased another company that had an existing Concur contract. The second is that Concur is really the industry leader. We were on an outdated homegrown system. As we merged two very large companies together and did an analysis of tools, Concur’s was much superior, well known. It offered ease of use and adoption by users.”
A financial analyst working for the manufacturing sector was keen to point out the benefits of using a standard system for global operations:
“We had an audit process throughout the company to have better policies and workflow for traveling expenses, so we started to check other tools. We found that in other countries where we operated they used Concur and really liked the tool. Our goal was to have just one tool for the company and have all audit rules and policies inside of the tool and workflows. Previously, we were using another type of software, but it was really old school with paper receipts and glue in sheets…”
SAP Concur was shown to be used mostly for Intelligent Audit processes and Concur Request (for pre-approval). The participants emphasised four core benefits to adopting SAP Concur. These were:
User-friendly features led to increased policy compliance: “…in doing expense reports. Rules-based technology means employees don’t need to know travel policy in detail. If something is incorrect, the system provides alerts…”
A reduction in the number of lost receipts saved time for the finance team.
Better analytics improved visibility: “With analytics and dashboard reporting, we can look at spend, accruals, and budget by department… we’re able to look at our spend, aggregate it, and use it for negotiating with hotels and car rental companies…”
SAP Concur helped with attracting talent and retaining employees: “it can help with attracting and retaining people because they know the company strives as much as possible to make their lives easier by providing working aids and appropriate tools.”
Other benefits that were mentioned included the overall reduction of travel expenses (“we spent 30% less and travelled 10% more”), reduction of the time taken by employees to report travel expenses, and easier auditing capabilities leading to a 50% reduction on the duration of an auditing task. The reduction of time dealing with reporting and auditing by utilising automation and digitisation was demonstrated by IDC to lead to very substantial beneficial impacts on operational costs.
Another benefit of adopting SAP Concur reported by participants was that it enabled businesses to manage regulatory and internal policy compliance effectively.
“We had some basic policies before just to prevent abuse of the company funds, but now we have a much more detailed policy. We didn’t track any of this before, but now we follow it rigidly. I would say 100% are complying now”
Analysis by IDC of the overall Return on Investment (ROI) for participant’s use of SAP Concur among the largest organisations demonstrated an average three-year ROI of 628% with a break-even point occurring after five months.
The implementation of an integrated Travel and Expense system such as SAP Concur will be increasingly necessary in the years to come as more business value will need to be found through increased internal efficiency in all business processes. T&E has typically lagged behind other business processes in keeping up to speed with the pace of change in digitisation, so it is a clear target for those seeking to improve their bottom line.
With extra information about T&E operations, businesses are able to gain leverage in negotiations with their business travel providers: driving down costs overall.
T&E management was shown by IDC to work most effectively when it is fully integrated to an organisation’s ERP and CRM systems as the extended data network provides greater visibility for strategic thinking and also opens up the possibility of further automation and machine-learning supported technologies.
While finance teams should always drive for efficiency in business processes, this does not mean employees should be constantly asked to justify spend. The extra control afforded by automated reporting can be used to help employees spend less time concerned with expense reporting and compliance and more time thinking about doing their jobs to the best of their ability. This will lead to a happier and more productive workforce.
Those who are asked to use an expense management system (in the finance team or the wider workforce) must be given time and support to learn how to interact with it correctly, so training provision must be put in place as an extension of the implementation process if maximum value and return on investment is to be derived.
As the world gets back to business there will be more travel and more expenses, but it will not be the same world. Things have changed permanently, and while the fundamentals of business remain the same, we must take account of socio-economic changes and structure our business operations accordingly.
Travel and Expenses management is now part of a more connected set of business processes, and those who can interpret the wide variety of data available, and derive new value from these data streams will have a strategic advantage over their competitors.
Finance teams are increasingly required to be all-knowing and predict the future in order to be successful in their discipline, but if technology is applied correctly then it can work miracles. It is import to emphasise that the judicious application of investment in the right areas can save vast sums in the long term.
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As more companies fully digitise their operations the margin for error in business becomes increasingly thin so the market for those who can facilitate spend management will itself become larger and more competitive.
The report from IDC is an instructive sample of the SAP Concur customer base and demonstrates that companies are willing to spend substantially to be able to manage spend correctly. SAP professionals seeking to augment their skills would do well to consider becoming specialists in SAP Concur because saving money is not going out of fashion any time soon.
Are you considering your position as an SAP practitioner? If you would like to discuss the potential for you to maximise the return on your investment in SAP skills contact IgniteSAP and our team will be happy to help you.
