In early fall -- way back during the first weeks of September -- I had the chance to catch up with some folks from the Basware team in London to learn more about the software provider's new offerings and strategy for 2010. I followed up with them again the following month, when I also conducted a detailed customer-reference call. During these discussions, it became quite clear to me that this was an organization with a really well thought-out strategy for capturing a larger percentage of the market for invoice automation/EIPP in 2010 and beyond. Moreover, it also became apparent that Basware was embracing a more open approach than most, one that places particular emphasis on connectivity partners to further improve the overall value proposition to prospects and customers. Starting today, I’ll tackle this topic in a series of posts highlighting the evolution of Basware’s strategy, and the types of results customers are seeing as a result of the products it has released to date.
In this first column in the series, I’ll provide some context behind some of Basware’s new capabilities and approaches to invoicing connectivity, not to mention sharing some illustrations about how Basware customers and suppliers are bridging the connectivity divide. But let me first say that my delay in getting this material up on Basware does not reflect its importance relative to other issues; I’ve simply gotten bogged down the past few months with all the vendor briefings and reference calls that I’ve had to work through. Moreover, if anyone ever suggested that Spend Matters sponsors get special treatment, this is proof that they most certainly do not, as my delay in sharing the latest news out of Basware and my thoughts on the subject shows. But enough background; let’s dig in.
For those who aren’t familiar with Basware, the company now counts over 1,500 organizations as clients. While many of these are headquartered in Europe, the company continues to invest globally, including significant expansion in North America. As of June, Basware was up to 750 employees globally and had 2008 sales of roughly $121M US ($130 million given current exchange rates), and I would expect a greater number in 2009. Basware's core strength really is what I describe as the "second P" in P2P. But in this case, the second P is not just "payment"; rather, it includes all the processes and workflows associated with automating the invoicing- and working-capital-management processes.
Basware also has solutions across the Spend Management spectrum including eProcurement, but where it really shines is in the downstream aspect of P2P. Interestingly, Basware’s latest financial breakdown suggests that its hottest growth area falls under what it describe as Automation Services (not professional services, mind you). Automation Services refer to all the back-office plumbing and enablement associated with driving throughput and visibility across a customer's e-invoicing environment.
The enterprise beneficiaries of these capabilities go beyond just procurement and finance (from a working-capital perspective). Rather, when companies have the ability to marry an integrated requisitioning-to-settle process with matching, approval, workflow, and visibility throughout the entire process, it enables the ability to drive to near 100% automation, eliminating paper even in highly complicated, cross-border environments. And by enabling such an environment equalizing for the lowest common denominator (i.e., smaller suppliers comfortable only in a paper world) using outsourced services (e.g., scan/capture), it becomes possible to move to a completely electronic environment as soon as a company is ready vs. waiting for its suppliers to hop on the digital invoicing bandwagon. This in turn reduces business risk by letting internal audit and risk-management teams better understand their overall exposure, which might start with a phased view into payment liabilities, but might also include supply risk based upon supplier invoicing, accuracy, and discount-behavior patterns.
Basware’s current invoice automation is based around what it describes as a packaged application for handling both PO and "orderless” invoices. It includes a range of connectivity and integration capabilities (e.g., preconfigured integration hooks to 200 different ERP environments). But beyond this capability, Basware is making a large push into the connectivity-services arena, aiming at both the e-invoicing and e-procurement markets. It provides, in its words, a single “pipe” for all invoices as well as global coverage and interoperability through a network of partners via Basware Connectivity, the name of their new new solution in this area.
On the surface, Basware’s Connectivity network may seem similar to those of its competitors such as Ariba, Oracle, Perfect, and Hubwoo (not to mention many others). These all provide a way of driving connectivity and document exchange/management outside of an expensive point-to-point EDI environment, but where Basware begins to look different is that it is not pitching its own network as an island. Rather, it is positioning it as a true hub-and-spoke model that interoperates with all of the key existing invoicing operators in different regional markets. Closed networks, in contrast, lack the same level of data connectivity, provide limited automated data-conversion services (between standards), and force a single point of connection between buyers and suppliers. This creates additional workstreams for both sides of the trading equation, who are most likely already connected to existing networks and invoicing-services providers.
What are the advantages and potential disadvantages of this for Basware customers? Check back and read Part 2 of this series next week to find out.
- Jason Busch