SAP Concur's Jim Lucier & Mike Koetting talk:
- Concur's strategic position within SAP's new Intelligent Spend Group, which includes SAP Ariba & Fieldglass
- Concur's growth outlook
- Concur's product road map
BTN chief editor Elizabeth West sat with freshly minted SAP Concur CEO Jim Lucier and chief product strategy officer Mike Koetting.
BTN: Jim, what are the strengths of SAP Concur as you walk into the CEO position?
Lucier: The culture of the company has always been focus No. 1. It's one of the remarkable things over the last nearly five years since the acquisition [by SAP] was announced: The culture's just gotten stronger. We've been lucky to have leaders who emphasized culture … [because] in the modern global war for talent, culture is what brings people and keeps people. Second, we've got a product mix that remains unique to this day. A truly integrated travel and expense product is not available, certainly not on a global basis. The breadth of our product line is extremely compelling. Third is that we have a lot of people who care deeply about the customer and how we can continue to focus on customer success. So those are the big strengths of the company. They're things that I've been involved in in various ways over time, and we're going to continue to emphasize those things.
BTN: You've been with Concur for 11 years. In what ways will you lead differently from your predecessors, change focus or bridge areas where you've found gaps?
Lucier: I don't think there are many gaps, in part because I've been on the executive team for a long time and so I would be indicting myself. I'm not coming in to change things dramatically. Our growth pillars remain our growth pillars, our culture remains our culture and we need to continue to invest in those things. That said, the timing of the announcement of the integrated spend group, our combination with Ariba and Fieldglass, is quite opportunistic. I do want to emphasize that we will continue to embrace SAP. [Concur has] been run as a stand-alone line of business for quite a while, but we have a lot to bring like a lot of cloud culture that complements SAP's incredible globalization capacity. There's a lot of cross-pollinating that can happen. And it's not that past leadership wasn't in favor of this, but it's now something we can talk about more openly, particularly as we combine under a comprehensive spend management business.
BTN: There's a lot of competition brewing in corporate travel booking technology. As you watch what the startups are doing, does it change Concur's development strategy?
Lucier: There's a lot of money getting poured into this space right now, and I'll be the first to say it's great to see more innovation coming in. It's healthy for everybody because it makes the tent bigger for customers looking to buy travel technology. That's good for our business, so I'm a big fan. In terms of how we respond, SAP Concur has a point of view about where business travel is going and what the solutions are. Under Mike [Koetting's] leadership, in particular, we have a three-year road map. [Other companies] coming in with a new product or feature is not going to influence where we think our product road map needs to go. We are going to focus more on what customers think than on what the competition is doing.
BTN: To that point, then, what do customers think?
Lucier: Customers are forever asking for new technologies around artificial intelligence and machine learning. That's something we've been doing for a number of years even before anyone called it by that name. But there's much more realization on the potential power of this, so the customers are asking for that dynamic. Traveler experience is another big one. We are hitting a tipping point [in travel management] where [buyers] have squeezed [out] most of the costs that can be squeezed, so experience is the next dynamic to work on. The focus on the traveler experience is in the heritage of our business and has been the magic of integrated travel and expense. From the company perspective, integrated travel and expense doesn't make that much sense: Travel rolls up to procurement and the metrics they're concerned about are cost savings, price and that sort of thing. Of course, expense goes in through accounts payable. They have a very different set of things they care about. It wasn't until you said, "Wait. From the business traveler's perspective, this is one process." Concur cleaned that up and delivered it as a single process for the business traveler. We were also very early into mobile, and we talk all the time about how Concur technology can help the traveler.
BTN: It occurs to me that SAP Concur has been talking about broader travel spend management and visibility since the advent of TripLink. Can one of you talk about those parallels and intersections and what's next for Concur?
Mike Koetting: The very foundation of our value proposition is spend management. We started this holistic view when we integrated travel and expense. Then, we took an honest look at what spend management was really going to require and made the investments and developed the technology to capture spend that was happening outside of just the one [agency] channel. That was eight years ago with TripLink, when it was heresy to even suggest [looking outside the channel]. But we just saw in a flash poll [that we conducted at the Global Business Travel Association convention] that fully 71 percent of travel buyers expect within the next 12 months to have a mechanism to capture off-channel spend. Collectively within SAP and the partnership with Ariba and Fieldglass, we all have this shared vision of delivering spend management in ways that are augmented by better analytics, machine learning, AI and customer experience. So I think you will see Concur continuing to elevate the experience and value of that core proposition of spend management and recognizing that as you evolve this idea of spend management, perhaps there's less magic in just automating a transaction. There may be more magic around the traveler experience around the breadth of transactions that you can capture and the number of channels that you can capture and the amount of content you can touch.
BTN: What about New Distribution Capability? Concur has integrated British Airways and Lufthansa content from outside the global distribution system. How much demand are you seeing for that?
Koetting: Part of our challenge and why it takes so long is our desire to integrate that with the TMC. So that is a non-GDS solution in Concur Travel that is designed and intended to enable integration with the TMC should the TMC be willing to pursue it. To the degree that you'd have clients who say it's less important that this [content] is integrated in the Concur Travel booking tool or the TMC, then we can point them to TripLink. BA has worked for a year now, and Lufthansa should be there very shortly.
Lucier: We are listening constantly to customers to understand where they want to go. I have anecdotal data from going out and talking to customers a lot. If you're impacted by a carrier that's moved [content out of the GDS], you're looking to access this content.
BTN: Where do you see the most growth?
Lucier: We've grown more in the last four years than we grew in the first 21 [years]. Our international business has grown really quickly and continues to. Second is small business, which is also international, but small business has been a growth engine for five years. The awareness [around] AI and machine learning has fueled our [existing] client business. We are making investments into helping customers see the value we are providing, and as they see more value, they tend to want to buy more. That's a third pillar and it's great. The fourth is the public sector. Our foray into the U.S. civilian government taught us an awful lot about what you need to do for, actually, every central government, so we are making a huge push there and have set up a team to pursue central government business around the world. It's a huge opportunity for us.