Even though the hours of daylight are waning in the world's Northern-most countries, the level of innovation in Spend Management is not. I had the chance last week to drop by the headquarters of Basware and Trade Extensions, two companies that are pushing the limits of innovation in two separate and distinct markets: purchase-to-pay (P2P) and sourcing/optimization. Even though Basware is best known for its solutions in the invoice automation and broader electronic invoice presentment payment (EIPP) arena, it continues to look at broadening its footprint to build out from a strong regional dominance in its core area and significant global expansion and growth. During my visit, I listened to their product strategy and plans, including a continued focus on both enterprise software and an open network connectivity model, and it's clear to me that their finance-driven approach to procurement is one that others will seek to emulate in the future.
Currently, Basware has by far and away -- at least in this observer's view -- the most capable invoice automation solution in the market today. Yet their current capabilities further upstream in the eProcurement area generate different views, depending on the observer. One consultant I know that has done numerous P2P evaluations and implementations recently considers the upstream/downstream P2P gap in Basware's capabilities to be a current hindrance in broader suite deals (which are increasing relative to one-off modular implementations).
Yet it's also clear that Basware has broader ambitions and quite a few things up its sleeve as well. Incidentally, in the P2P arena, Basware is second to only Ariba in revenue, at least among best of breed providers (it's impossible to judge Ariba and Basware revenues compared to SAP and Oracle in the areas in which they compete because the ERPs often find creative ways of reporting revenue to the analysts on a product-by-product level). Regardless, one thing is clear when it comes to Basware: 2011 should be a fascinating year to watch from a combination of growth, global expansion and product/solution depth perspectives.
Trade Extensions is a much smaller vendor than Basware, focusing on an entirely different area: the intersection of strategic sourcing, total cost analysis and supply chain design. Even though like its competitor, CombineNet, Trade Extensions is best known for working with companies in the area of logistics optimization (from a sourcing perspective), they're doing some fascinating things in the areas of both direct materials and even professional services procurement. I look forward to sharing some of the more innovative use cases for optimization in non-traditional categories in the coming weeks as well as talking about how customers are increasingly factoring in areas such as working capital, service levels and other elements into the optimized sourcing equation.
During my short visit, I learned that Trade Extensions has won some very large customers in recent quarters, many of which remain unannounced. The customer list, even though not huge, is one of the most impressive I've seen given the size of their average customer (which is weighted heavily to the largest companies in the Global 2000). Curiously, even though Trade Extensions is capable of delivering both software and services -- and in general in the sourcing area, there has been a trend to greater self-service usage of tools in recent years -- they shared that they recently had a customer come back to them and ask if they could once again start running events on their behalf because they did not have any internal resources available. More data points like this in the coming quarters will suggest that the current jobless procurement recovery is contributing to a reversal of the trend of companies taking greater responsibility for building internal skill-sets for their most strategic spend categories.
In any event, with the launch of Spend Matters UK/Europe, I hope to cover European-based vendors more closely in 2011, including both Basware and Trade Extensions. In addition to numerous UK-based providers, others throughout Europe that I look forward to drilling down on more include IBX, Pool4Tool, Ivalua, B-Pack, and Xcitec.