Can Basware Get Its Mojo Back?

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On the solution level, there are a lot of things to really like about Basware’s products and direction. This fall, the Spend Matters analyst team collectively spent over a week reviewing and analyzing Basware: where its strong, where it needs to grow, how it needs to bring different pieces together to win against competitors and what types of organizations are likely to value its unique capabilities and finance-driven expertise.

Spend Matters PRO subscribers can read our full Vendor Snapshot below:

Those who take the time to read the analysis word-for-word will find it fairly exhaustive. And it’s clear we’re excited about where Basware’s can go and the mental space that it is trying to carve out in bringing to market a finance-driven philosophy around procure to pay (P2P). Yet recent news to come out of Basware, including potential restructuring/layoffs, couched under the somewhat hilarious euphemism of a “productivity programme,” points to headwinds rather than opportunity.

If You Build It, Don’t Bank on Them Coming (In Most Cases)

Software companies are not the sum of their products (only). The “best fit” products will only make their hands into the right set of customers if the stars align, unless the sales, marketing, channel/partnership/reseller, corporate development, product management, development and R&D teams are all operating in synch.

When you begin to step away from Basware’s solutions and the marketing group, which has done a commendable job putting together a storyline around them, the Finnish software company is more difficult to read. To this point, whether it can evolve quickly enough to capture market share at a pace that keeps up with the growth of key competitors such as Coupa, SAP Ariba and GEP and can carve out its own product mindshare (finance, treasury, working capital, etc.) niche for P2P is a question best debated over “sauna beers.”

Can Sauna Beers Help Basware Gets Its Mojo Back?

I’ve learned in my time in Finland (not to mention my favorite Russian-inspired sauna in Chicago) that a “sauna beer” is the perfect drink to prepare you for conversation on a topic with others. Let me explain. In the states and the U.K., there’s arguably too much of an emphasis now on craft beer and “real ale”, which often takes the center of conversation when drinking at a pub or another venue.

But a “sauna beer” is a beer that’s not too dear. Or strong. It’s not something you’d ever comment on — it’s a drink. As soon as you take a plunge into a cold summer lake or roll in the winter snow after being in the sauna, you’d forget the brand you just quaffed.

But a sauna beer is good for one thing: it gets the conversation going among all those joining in the sauna experience. This is important, especially in Finland, a culture that respects and values silence, given that talking can be a painful chore for some.

And Basware needs to overcome its “Finnishness” and talk more openly and honestly about where it needs to go as a team and what it stands for — at all levels. The recent management changes to emphasize execution-related efforts and cost cuts may appease investors and help smooth results, but they don’t get at the fundamental challenges Basware needs to solve as a global team.

So either fueled by sauna beers or simply town hall-type meetings, Basware needs to get its global team on the same page. I bet today, if you asked various employees, from different areas of the business, what Basware stood for and what made it different from the competition, you’d multiple answers. That’s not good.

The Path Forward

I personally believe that Basware would benefit either from true global alignment or the alternative, complete country/region decentralization, to compete effectively on a global basis. I actually think the latter would be most effective over the short term, given Basware’s legacy. Regardless, the firm needs to act more nimbly, including a bottoms-up market penetration strategy, as it has already proven that “big bang,” top-down efforts, such as the Arrowgrass partnership, will not necessarily be effective to enter new markets or market segments.

Beyond the alignment and decentralization question, Basware needs to be more memorable. Among some of its clients and partners we’ve spoken to over the years, Basware is seen too much like the old SAP — it’s a “vendor” in other words, and not necessarily one people get overly excited about working with. We can point to Coupa and Ariba, for example, and note how each is polarizing in different ways. Yet Basware is just “there.” As a brand and as an increasingly cloud-centric software company, the old Basware doesn’t inspire much.

And I’m not entirely sure what the new Basware stands for yet either (maybe others are — at least, I hope they are).

Granted, Basware has recently made the leap to a cloud-based P2P suite through bringing to market two (mostly) integrated products, one organically, and one through acquisition, that combined deliver a one-two punch with competitive e-invoicing/accounts payable automation and e-procurement capabilities. With these two solutions, Alusta and the product capabilities gained from Verian, which will ultimately be joined as “one” when put on a common code base, Basware has the foundation of something special in our view.

Yet good products alone don’t sell themselves, especially in an increasingly competitive global market. Even in the Nordic region, a market that Basware has led for years in the P2P area, is already seeing increased competition from Coupa, Synertrade, Ariba and even the Finnish post office (which is building a P2P footprint that should give Basware pause, given how close to home it is, and the fact it is, after all, the post office).

There’s good news, though.

In short, Basware has such potential with the assets it has already. And its marketing message of making P2P a finance-centric solution, bringing in working capital visibility, control and other elements into the “spend” and expenditure question, is smart, even if it does threaten procurement a bit (it should, for the right reasons).

But I believe that to realize the success that is possible and to fend off increasing local (and global) competition, Basware needs to embark upon more foundational changes than what it has let on about in recent press releases.

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First Voice

  1. Markus Lyyra:

    Good article, I can totally agree with some of your views.

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