IBM, in a new campaign to exploit the tools it created to transform itself into an e-business company, announced last week that American Express Co. will market its electronic expense reporting system to thousands of small and midsize businesses.
Amex, in New York, will market a customized version of the IBM Web-based expense reporting and reconciliation tool as part of its American Express @ Work suite of online expense reporting and management productivity tools.
IBM Global Services, which is taking the lead in the initiative, will host the software for Amex at as-yet-undetermined data centers.
Under the agreement, "we provide the application and the sourcing and the e-business-on-demand part of it. They will have the expense management and card services tied to that," said Scott Smith, global executive of e-Workplaces at IGS, in Cambridge, Mass.
The American Express @ Work suite includes a series of online applications that automate Corporate Card and Corporate Purchasing Card administrative tasks and provide online access to MIS reports.
The new service, based on IBMs Java-based application, is expected to be available this month, according to Smith. Amex will offer two flavors of it: one for reporting travel and miscellaneous business expenses and the other for reconciling corporate purchases.
"Customers can do this on a per-demand basis—as much or as little as they need," said Smith. "That makes it more affordable and more predictable."
The IBM application has already been sold directly to large Fortune 1000 companies, including Xerox Corp., Chevron Corp. and Bristol- Myers Squibb Co. Those companies are managing and maintaining the software themselves, rather than accessing it in a hosting model, according to an IBM spokeswoman in Armonk, N.Y.
IBM itself used the application internally for hundreds of thousands of employees worldwide.
The potential cost and productivity savings of expense management automation tools such as the American Express @ Work Reconciliation tool can be significant. Boston-based market research company Aberdeen Group Inc. in a recent study found that the average cost to process an expense report can drop from about $45 to $5. At the same time, the average time to enter an expense report can drop from the 30- to 45-minute range to about 10 or 15 minutes. And the average time to settle an expense claim can drop from over a month to three days or less, according to Christa Degnan, an analyst at Aberdeen.
"For companies that rely heavily on their [Amex] Corporate Cards, this lets employees file expenses right online," Degnan said.
Amex will offer the online expense reporting application as a new service option to its existing Corporate Card services, and it will be integrated with Corporate Card data, according to an Amex spokeswoman.
Although Amex had worked with expense management automation vendor Concur Technologies Inc. in the past, it selected IGS for its infrastructure, capacity and global reach, the spokeswoman said.
The cost of the service will depend on a number of factors, but Amex thinks it will be "a very low entry cost for midsize companies," said the spokeswoman. The annual cost, including installation and monthly per-user fees, could be in the thousands. For a large company, the cost could be in the low tens of thousands, she said.
IGS is looking to extend its reach into the small and medium-size business market by partnering with a variety of third parties. To date, it has signed on with up to 140 partners. In marketing its own e-business productivity tools, IBM late last month announced an alliance with Amexs MarketMile to offer e-procurement services for midsize companies.