Dedicated T&E solution vs. FMS: Which is the smarter choice?

Financial management systems (FMS), such as those belonging to SAP and Oracle ERPs, have generally been adopted by enterprises as part of a larger ERP deal, as a bundle deal or otherwise. These solutions can handle everything from accounts payable to payroll, yet fall short in specific functions as an organisation’s requirement grows.

Indeed, that’s what we’re seeing in T&E management with tectonic shifts in the market such as rising costs, complex hybrid work arrangements, and an influx of business travel. Finance teams are facing tremendous pressure to control costs and keep employees happy—all while running on leaner teams.

Since adopting a new solution can be complicated and time-consuming, many organisations have proactively opted for more agile, dedicated solutions to meet their needs. A 2024 study by access management firm Okta found that 34% of US companies already rely on best-of-breed technology, up from 28% in 2019.

The question is: Is your T&E program future-proof or at risk of disruption from external factors?

The resurgence of business travel (and rising costs) in 2024 has had many organisations scrambling to manage travel expenses. Finance teams are updating T&E policies, upping enforcement, and renegotiating rates with hotels and airlines.

A recent Mastercard white paper confirmed this, revealing that 52% of survey respondents intend to spend at least $1 billion on travel alone in 2025. Further, cutting back on travel looks to not be an option as 43% of survey respondents believe that doing so will result in a 10% decrease in revenue and a 10% increase in employee turnover.

Finance leaders are integrating expense management with travel management to meet this new reality and prepare for future changes. For example, with an NDC-enabled (new distribution capability) T&E solution, organisations can book and reshop flights directly within the system knowing that they’re getting the best fares.

Having these capabilities to optimise T&E processes—and spend—can mean the difference between hitting and missing your performance targets.

Convenience is the biggest driver of policy compliance. And user experience (UX) determines convenience. On this front, it’s important to ensure that the UX for both the finance team and employees are equally positive.

For the finance team, it’s important that your T&E solution is intuitive and easy to use. Creating new business rules to reflect the latest policy changes shouldn’t take an IT request and two weeks. It should be easily customisable by the team without having to tinker with code, in five minutes.

For employees, eliminating much of the tedium associated with the expense process is key. For example, you could provision virtual cards with embedded spending rules to help employees avoid making out-of-policy purchases or give them an AI-powered mobile app that can automatically capture receipt details so that lost receipts are a thing of the past.

Is your FMS easy enough to use and have these capabilities? If not, UX may be a factor holding your team back.

The ability to quickly adapt and innovate is key in future-proofing any business function. But can your T&E solution keep up?

Because general-purpose FMSes are responsible for a host of critical finance functions, any attempts at innovation can be disruptive to its users’ operations. Stability and risk minimisation are prioritised over rapid innovation. Instead of incremental updates and enhancements every few weeks, upgrades typically follow a quarterly update schedule.

Indeed, Oracle’s FMS, Fusion Cloud Financials, only saw three updates in 2023, most of which are unrelated to T&E. Contrast that with Emburse’s enterprise T&E solution, Chrome River, which received 25 updates in 2023, nearly one every two weeks.

FMS customers would generally have to wait longer for new features and bug fixes. This may mean missing out on many new technologies and innovations, like AI-powered features, which could make a tangible difference to the team and the larger organisation.

Integration is key to eliminating manual data entry, streamlining processes, and ensuring high data accuracy.

Generally, both FMS and dedicated T&E solutions offer a wide range of integration options. But there are major differences between the two that you need to be mindful of.

To start, dedicated T&E solutions offer more relevant integrations, namely those in HR, payroll, finance, and especially travel. Integrating a T&E solution tends to be quicker, easier, and cheaper as the platform is less complex and unencumbered by a larger ERP platform. They are also more flexible and customisable, allowing them to be adapted to an organisation’s unique requirements.

It’s likely that an FMS can eventually be configured to integrate with all your platforms. But how long will it take, and at what cost? It’s equally as likely that an integration will fail simply due to the inherent complexity of the system, as anyone who’s experienced an implementation can attest to.

Either way, a solution’s integration capabilities are a key factor that should not be overlooked.