Once a dominant player in providing expense management systems, at least for very large expense programs, IBM is winding down Global Expense Reporting Solutions and giving way to the current leader in the space. Concur now aims to persuade IBM's clients, including some pretty big names, to switch over to its expense management system. At the same time, IBM's decision to choose Concur as a partner while it sunsets GERS could help it keep some BPO clients rather than driving them to competitors.
IBM this month acknowledged plans to cease operating GERS as an individual offering and instead will refer customers to Concur.
"IBM in that part of the business I think is not seeing a lot of growth," said Concur vice president of corporate strategy and investor relations Todd Friedman during a Wednesday presentation at a Raymond James investment conference. "It made sense for IBM to find a partner there and say, 'We are going to sunset our product, but rather than just let you go away, we are going to suggest you move to this one,' and maintain those relationships. If you are IBM, you'd much rather see customers go to Concur than Oracle or SAP, for obvious reasons."
IBM and Concur have declined to reveal the number of customers that use GERS. Friedman said those customers are "really solid, blue-chip customers that we would really love to have," and Concur COO Rajeev Singh recently told The Beat that they are "keen targets" for Concur.
"We understand that it's incumbent upon us to demonstrate value to each and every one of these customers to move them forward," Singh said. "These customers are part of a broader landscape of a universe that is still very underpenetrated. We look at the midmarket of our business and there's less than 5 to 10 percent penetration, [while the] enterprise and global customer base penetration rate is about 10 percent at the top end."
Singh added that the IBM partnership would provide a "smooth and orderly" transition for GERS customers interested in switching to Concur Expense, and that Concur also would facilitate integration with other IBM software for finance, procurement or accounting functions. When asked if GERS customers would receive special pricing or discounts for switching to Concur, Singh said pricing will be discussed during "individual conversations" with customers.
Noting that IBM's "significant customer base" of T&E clients primarily is composed of large enterprises, Singh said the transition will be a "multiyear process."