Basware and Lavante: Where Invoicing, Supplier Management and Audit Recovery Meet? (Part 3)

In the first two posts in this series looking at the recently announced relationship between Basware and Lavante (Part 1 and Part 2), I provided context behind the partnership announcement, including a 30,000 foot fly-by of the audit recovery market and how Lavante has introduced a solution originally designed to automate and improve upon traditional manual audit recovery tools into a broader supplier management role. In this conclusive final post, I'll provide a quick overview on the opportunity to bring this capability into an A/P or finance-focused customer base (i.e., the constituents of Basware's target market and current customers on a global basis).

Most traditional supplier information management vendors approaching the supplier management challenge have opted to focus on enabling specific tasks, largely centered on improving the procurement and auxiliary supplier management functions. These tasks and focus areas have included: supplier enablement (for eProcurement and general on-boarding), supplier diversity (both single and multi-tier management and tracking), supply risk reduction and visibility, CSR, supplier performance management, supplier development and supplier quality (note that not all of these are mutually exclusive). But few of these providers have targeted finance as a primary constituent or benefit of their supplier information management capabilities.

Lavante, in contrast, has sold into the sweet spot of the audit recovery market: finance organizations -- and to a lesser degree, finance adept procurement teams. This target market has led to a solution orientation that is in far greater alignment with Basware's traditional customer base (finance and A/P, in addition to procurement) than who their competitors target today based on the historical problems they've solved. If Basware succeeds, I can see a scenario with Lavante that would enable them to engage on a much more tactical savings and credit level outside of invoice automation and working capital management, introducing an expanded value proposition that will drive market differentiation in comparison to the sea of other invoice automation, supply chain finance and broader P2P toolsets.

Given the logical and close business fit, I suspect the only reason this was not an acquisition rather than a partnership is because of the need for both companies to get to know each other (and potentially the valuation hurdles involved, given the relatively low valuation multiples of Northern European software companies compared with fast-growth vendors in the US). But who knows -- with enough partnership traction, perhaps this deal could quickly become more strategic. In the meantime, stay tuned for further coverage of Lavante's solution set in July. We look forward to digging into their supplier and vendor file management and approach in more detail. We'll also be profiling some new and expanded areas from Basware as well. We also hope to cover PRGX's capabilities (with the newly gained Etesius toolset) later this summer and fall as well.

Jason Busch

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