Earlier this winter, I wrote the first in a series of posts on Basware that I planned as an introduction to the Spend Management provider during the first quarter of the year. When I looked at the date last week, I realized that I had better get moving and finish (no pun intended) the series. In my initial post, I wrote that after spending a couple of hours looking at the software, "I was so impressed with their capabilities on the second P -- in P2P that is -- that they've made it to the top of my shortlist of recommendations in a bunch of discussions with practitioners looking at e-invoicing since then." And they continue to do so to this day. In this post, I'll continue to provide some background on Basware while starting to discuss some of my specific findings from digging into their applications and offerings. In the final post in the series that I'll publish tomorrow, I will describe the solution key takeaways that companies looking for general P2P and invoice automation capabilities should remember when it comes to Basware.
But first, let me return to this investigation with a bit of history. Basware has been around for quite some time. The company was founded as Baltic Accounting System only three years into Reagan's first term (back when Finland really did have to worry about its neighbor to the East flexing its red muscles). Fast forward over twenty years and Finland's former Soviet Baltic neighbors are capitalist democracies, a modest German software company managed to morph into a global ERP giant, and Basware became one of the leading providers in the fast growing P2P market, especially in the downstream invoice automation arena. While I want to keep the focus on Basware in this post, I can't help but share a bit of Finland's recent history and its relevance for the rest of the world in this era of expanding government, higher taxes and loose monetary policy. According to Wikipedia, "Until 1970 Finland and other Nordic countries had relatively low taxes, low regulation, and some of the highest income levels in the world. Then Nordic countries saw a dramatic change. In Finland, the number of bureaucrats and overall taxation were doubled between 1970 and 1990... and in 1991 Finland fell into a Great Depression-magnitude depression."
Still, throughout this big government inspired economic malaise, Basware prospered and grew. In a country as close-knit as Finland, Basware, like Nokia, was one of the limited number of growth oriented success stories throughout this period of rising socialism and regulation throughout the region. Basware now has 1700 customers (and 700,000 users) in over 50 countries -- not bad given its humble, regional beginnings. As a final aside before getting back to their products, I find it intriguing that nearly all vendors that started out like Basware, focusing on general ledger and back-office finance automation, were ultimately acquired or went out of business. But Basware managed to see the writing on the wall, morphing its focus to a specific set of accounts payable and procurement business processes rather than trying to maintain its place among larger ERP brethren. Smart move, in retrospect.
Today, Basware's core strength remains squarely with invoice automation and downstream procurement. Additionally, they also offer a range of other products that compete at various market levels relative to the competition. These include eProcurement, contract management, and as they term it, RFx management (not full-blown e-sourcing as the market thinks about it). But downstream procurement and invoice automation remains their sweet spot and is the primary opener to new accounts. From an invoice automation perspective, Basware focuses on helping companies both improve and streamline the overall process starting first with tools that focus on supplier enablement to get suppliers up and running in the system.
From an internal integration and implementation perspective, Basware can typically go live inside of 12 weeks with most clients (10 weeks is average). In companies with simple operations, going live can occur in less than a month or 6 to 8 weeks. Basware solutions come with integration connectors and adapters for over 200 ERP/back-office systems out of the box (Basware can typically add additional providers in a week to ten days as needed in situations with highly esoteric or home-grown systems). Once live, Basware's highly configurable invoice processing workflow enables companies to define specific workflow steps at virtually any level they would require starting with data capture for both paper and electronic documents (including invoices) through to invoice coding, invoice review, approval and payment transfer. It is truly one of the most configurable systems I've ever seen without requiring custom coding. In the words of an industry colleague who is very familiar with the product, it is "exceptionally engineered." I’m sure anyone taking a close look at the product -- especially in relation to the competition -- would agree.
As with other invoice automation tools, Basware's scan and data capture make use of OCR technology which, when I looked at it, appeared to give quite satisfactory results with very little manual intervention required on the invoice line-item level. The system is also self-learning over time, requiring even less manual intervention as it begins to adapt to each environment. The entire automation approach greatly reduces the amount of time that A/P must dedicate to the payables process, enabling companies to either reduce the number of employees focused on the payables process or reassign them to higher value areas (e.g., working capital management opportunities through better supplier / discount management). As an example, one large beverage company has reduced the number of invoices they touch manually in any capacity down to 7% of overall throughput. 93% of the time, the entire invoice coding, invoice review and invoice approval process is completely automated. Given Basware's European roots where cross border trade and VAT requirements drove many companies to adopt invoicing solutions earlier than in North America, the system is built from the ground up to operate in multi-tax, multi-organizational and multi-lingual environments. Perhaps that's no surprise, but what is, is how many Basware users are using invoice automation solutions to fundamentally transform how they treat the payables process (rather than just automating it), improving their overall payables performance and enabling new types of working capital management opportunities. Stay tuned for the final post in this series to learn more about how they're doing this.