In January, Basware announced its acquisition of First Businesspost, one of the top e-invoicing network and software providers in Germany. For our initial insight into the financial and high-level solution, customer, competitive and marketplace dynamics of the deal, check out our initial coverage. After the announcement, we also caught up with Purchasing Insight's Pete Loughlin, and he provided a few other observations. He said that two things about the transaction are fairly obvious, but elements might be lost on those not close to the e-invoicing market.
First, Pete told us that that transaction is "another sign of consolidation of players in Europe. It's really proof of the obvious and a continuation of a trend." Second, he called out the fact that "Germany is the biggest economy in Europe and 1stbp was a significant player within it." "In the German market they were important," Pete notes. He then remarked how the transaction represents an "important amplification of the openness message" that Basware is pushing. Pete suggests that "Basware are the biggest advocate of open networks," and it's his view that just as "consumers ultimately demanded openness in the wireless space (e.g., roaming), businesses will also come to expect similar flexibility and interoperability among e-invoicing and supplier network providers as well."
Part of enabling openness won't just come from how Basware creates and implements these "roaming" type of agreements with other providers. It's also how it can act as a conduit to rapidly bring suppliers onto its network to transact directly with Basware customers plus other affiliated networks and P2P software packages. Here, 1stbp offers a set of enabling technologies for supplier onboarding and transactional management/interchange that has the potential to accelerate broader adoption of true e-invoicing (not scan/capture or email/PDF/capture) of suppliers. Perhaps most interesting is the virtual printer toolset that 1stbp leveraged -- and now Basware is already starting to leverage -- across its global supply-side user base.
Basware shared with Spend Matters that "most virtual printer tools leverage an image presentation approach to capture data (e.g., OCR/image recognition), but with the 1stbp approach, when a supplier sends an invoice, it is never turned into a PDF or GIF file." Rather, "the print stream is transmitted through a gateway component and the data is mapped directly via the print stream itself, not the generated document that results from a print command. Because the approach is entirely based on the structural print stream rather than extracting data from an image (PDF, GIF, TIFF)...typically all that a supplier needs to do is test a print command against a pre-created template...which reduces supplier activation time from roughly a day to 30 minutes." The approach enables "most work to be done by the supplier themselves," which combined with the short timeframe to get suppliers up and running, can increase the percentage penetration of e-invoicing within a supply base. Spend Matters own analysis and our discussions with other experts and providers suggest that other similar virtual printer technologies can enable consonant outcomes.
We should also note that we haven't yet tried out this technology personally. Transcepta, a network/connectivity specialist based in the US, was gracious enough to take the time to onboard our firm as a supplier in their system, taking us through the simple process step-by-step. We have requested the same of Basware, but have not yet gone down this path, however we expect to in the coming weeks. We can provide a strong endorsement of the simplicity and thoroughness of what Transcepta has done for small suppliers and hope that Basware's solution is equally as painless.
Stay tuned as we conclude our analysis of the 1stbp transaction.