Steve Singh remembers it as “a moment of clarity” when he decided to change the direction of his expanse management company.
The CEO of Concur was sitting on a jet in the spring of 2000, next to his sleeping wife as the new couple flew off on their honeymoon. Not exactly the best timing to decide to turn your struggling company in a fresh direction.
But Singh had suddenly realized, as he read through his management reports, that Concur had to make radical changes and eliminate some side businesses that Singh, himself, had advocated that the company pursue just a few years before.
In 1993, chief technology officer Mike Hilton and president Rajeev Singh, Steve’s brother, had founded the company, which develops software that automates and manages travel and expense processing for its customers. Since then, the business has survived economic dips and corporate upheavals to grow quietly into a stealth expense management behemoth.
Much of that growth can be attributed to the decisions made by Steve Singh, who had held various positions with technology companies before becoming CEO of Concur in 1996. In his usual thoughtful and self-deprecating style, Singh jokes that he became the company’s chief executive because nobody else wanted the job. After four years of struggles, he believed he had finally hit on the way to build a long-term winner: Concur would drop the licensed software model and launch an on-demand, software-as-a-service, or “SaaS,” model in which companies paid only when they used the product.
Concur would also get out of the procurement and human resources areas, and stick to what it did best: developing and managing software that automates travel and expense management. While few thought there was much of a market for this kind of software, Singh always believed this emerging sector would eventually be worth billions of dollars.
He also knew his plan would face opposition. Many board members favored diversifying the company’s business model. At the time, a software company had never really tried the on-demand revenue model. Still, Singh just knew this was the right direction.
“I sat there and realized that I could choose to face my problems or ignore them,” Singh says of that airplane epiphany. “I chose to face them and make the necessary changes.”
The past eight years have proven Singh right. Every quarter since the shift in direction was implemented Concur’s revenues have climbed.
In fact, while other companies struggled in 2008, Concur has had an impressive 12 months, helping to earn Singh Most Influential Executive honors. The 900-employee firm grew its client list to more than 7,000 companies, including an increasingly large presence in Europe. It expects to post 2008 revenues of about $214 million, up more than 65 percent from 2007 revenue totals.
But even more impressive is the announcement in July that American Express, the nation’s largest corporate card supplier, was buying 6.4 million shares, or 13 percent, of Concur for $251 million. The move has secured Concur a prominent place in the travel expense industry and gives it a major advantage over competitors such as IBM.
American Express and Concur have also entered into a marketing alliance. Concur will exclusively promote American Express’s corporate cards to its clients. In return, American Express will exclusively promote Concur’s expense product to its customers: thousands of companies, including 60 percent of the Fortune 500, that handle the expense payment paperwork for millions of employees. To sweeten the deal, Concur is still free to collaborate with other corporate card issuers.
All these successes have earned Concur plenty of praise. Fortune magazine ranked Concur as the nation’s 54th fastest-growing company this year, based on revenue growth and earnings per share. Business travel publications have showered the Redmond company with awards, including The Beat, a well-respected travel industry magazine, naming Concur the most admired corporate travel technology provider in the business.
Singh’s vision is simple: within two years, employees at any company will never need to touch a piece of paper when it comes to planning or expensing work-related trips. It will all be done automatically with Concur’s technology, from picking the airline to paying for the taxi.
While such a vision now seems within reach, back in the dark days of 2000 and 2001, such growth was no certainty for Concur, and there were plenty of times when it appeared Singh’s gambit may have been wrong. After talking his 17-member board of directors into his new plan, Singh says he actually received death threats via e-mail. His thinly traded corporate stock went from a high of about $30 a share to a low of 28 cents a share during the next year. Eventually, all but two members of the board of directors would leave. Still, the company stayed on course, focusing on what it did best.
“Too many companies in the world try to solve too many problems,” Singh says. “You need to have a laser focus on what you do well and try to be great at one business function.”
As the global economy slows, Singh says he believes his niche industry will fare well. He adds that tourism and individual travel will drop, but he expects corporate travel to only flatten out or decline slightly. But even if the industry does nosedive, there are estimated to be between 25 million and 35 million small- and medium-size businesses in America, and no software company yet dominates the travel expense niche. Concur is in a strong position to continue to attract customers looking for the savings and efficiencies its system offers.
Despite all his success, Singh remains humble, enjoying the fact that Concur’s growth has gone relatively unnoticed by the general public.
When asked about his unassuming style, Singh, who has a penchant for philosophizing, responds with an old adage: “Those the gods would destroy, they first make proud.”