CEO Departures at SciQuest, Basware: Some Personal Musings

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There’s leadership change in the air at two of the larger procure-to-pay (P2P) technology providers.

Earlier today, SciQuest announced that Robert Bonavito had replaced Stephen Wiehe as CEO, coming on the heels of of Accel-KKR’s $509 million buyout of the provider earlier this summer.

And on Monday, Basware announced that Esa Tihilä, who had been CEO for the past five years, “during which time the Basware share price has more than doubled,” had stepped down and Vesa Tykkyläinen, who previously served as senior vice president of Basware’s Network Business, and before that was an executive at Nokia, had taken the helm.

In my personal view, the changes speak to the highly competitive nature of the procurement solutions market and the relative impatience of boards and owners to continue supporting leaders who may be running successful businesses but whose growth is not keeping up with the overall CAGR of the market, as well as materially trailing top performers. In addition, the leadership shifts also call into attention the need for providers to increasingly focus on execution at the top, especially from a top-down commercial leadership perspective to keep pace with peers with a tunnel-vision focus on growth.

I’ll share a few more observations before calling it a week (one that’s been an 8,000 mile one for me so far). As with the above, these views represent my own and do not necessarily represent that of my colleagues, Spend Matters or Azul Partners.

  • Basware arguably designed one of the strongest network-based payables and receivables financing strategies, covering both sides of the equation, including a network-enabled factoring (seller-led) model. But execution has been a long time in the making — further proof that P2P, tech-enabled trade financing offerings make perfect sense on paper but are really hard to execute in practice. In this case, might the delays have contributed to a shift at the top? Regardless, P2P financing uptake is hard to pull off in any case, as Basware’s peers will also attest to. Nothing new here.
  • SciQuest has such a clever set of assets and the right suite strategy, which we recently reviewed, but it has come up short from a commercial execution standpoint in putting all of the individual parts together into a cohesive whole that it could take to the market. Might new leadership speed the process? It would certainly benefit customers across the industry to have SciQuest become a more frequent source-to-pay (S2P) shortlist candidate.
  • Coupa has gotten some criticism from those I know who’ve read the S-1 for losing money. But in my view, you can’t argue with a CAGR approaching three figures, if that’s what the board and management team set out to do. I have many criticisms of Coupa (as I do of all providers), but the growth of a true SaaS/cloud business at these levels compared with the growth rates of SciQuest and Basware in the same markets showcase what’s possible for firms that are willing to invest to capture market share at a faster rate than peers. SciQuest (and its past CEO) obviously had stuck with a more conservative growth route, but Basware (and Esa) were caught in the middle, having articulated to the market it was shifting from a conservative, profit-centric strategy to one favoring greater sales and marketing investment.

And finally, might Coupa’s pending IPO and published numbers have contributed to either of the other sudden leadership changes?

What do you think? Am I off base here? As I see it, two CEO changes in one week among the largest procurement technology sector providers must be more than coincidence.

I welcome your thoughts, opinions and ideas.

First Voice

  1. Pierre Mitchell:

    Nice post Jason. I’ll chime in with my quick thoughts…
    Modern tech CEOs need to turn traditional org hierarchies 90 degrees to the customer – and flip the pyramid so that senior leadership provides support and creates a culture of collaboration/trust/openness/innovation without losing focus and accountability. Doing so through a period of major tech/architecture changes and acquisitions requires an even higher level of empathy and emotional intelligence to lead this transformation. When c-level leaders are unwilling or unable to do so, the best people leave and you begin a death spiral of sorts. I’ve personally lived through this a few times. This is when strong boards and investors need to make an intervention. I can’t speak for Basware, but Accel-KKR are very smart folks and their swift action tells me that they’re serious about turning things sideways – in a good way. I happen to know that there has been some dancing in many of the hallways down in Morrisville – and I can’t wait to see how things will evolve there with the new leadership.

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