More on the Basware / BravoSolution strategic partnership

Last week we featured the strategic partnership between BravoSolution and Basware - here are some further thoughts on the announcement.

The first point to note is that technical integration between the firms has clearly been considered quite carefully in terms of how the different product sets might fit together across an end to end source to pay process.

“Upon completion of a strategic sourcing initiative, the resulting contractual agreement can proactively be managed across its entire lifecycle and activated across the business by empowering … end users with easy, consumer-style purchasing systems to ensure preferred suppliers are used and negotiated savings realized … the effective creation and management of contract and catalog content are examples of key integration points for the partnership. The integration allows contracts strategically sourced in BravoSolution to become operational in the purchase-to-pay process through Basware".

It's also worth noting that this has been some time in the gestation period - eagle-eyed observers will have spotted Basware participating in the BravoSolution customer day more than two months ago, and the contact clearly goes back well before that.

A key driver is clearly the chance to have a shot at significant customer requirements for large scale end to end "source to pay" solutions - that is, those that combine purchase to pay transactional solutions with the strategic sourcing elements of analytics, sourcing and contract management. And the first success of this strategy has already been evident in the recent contract win with Finnair.

"Finnair has collaborated with Basware for many years in invoice processing and payment solutions, and is also currently implementing the complete Basware Purchase to Pay suite. As a next phase of this collaboration, Finnair is pleased to confirm that it is implementing BravoSolution's strategic sourcing solution to form an integrated Source-to-Pay solution based on the announced global partnership between Basware and BravoSolution," said Jari Huhtinen, Vice President, Procurement, Finnair Plc.

OK, the true tests will come when we move outside Basware's domestically loyal customer base. But we  might begin to see an emerging competitive picture for large international firms looking for full S2P providers. SAP /Ariba will be in there, and as they increase their suite capabilities rapidly, Coupa are likely to become another regular on the short lists. Oracle should be there but...  and IBM still have a few gaps in their strong in parts portfolio. (An acquisition or two could quickly change that).

Then Iasta, Zycus and a number of other regional players would love to move up into the mega league, so one or two more may make it, perhaps with some acquisitions or partnerships to strengthen their portfolio. But for the next couple of years, we might see quite a lot of  competitions featuring  SAP/Ariba versus Coupa versus BravoBasware in big blue chips.

However, whilst it would be easy to assume that this partnership must inevitably lead to a full merger or acquisition, that's not necessarily the case. The fairly similar size of the two firms might actually make it less likely. Basware would need to raise significant amounts of cash - or do something creative (cf. OB10 / Tungsten) to buy BravoSolution. Equally, Bravo's parent (an Italian industrial firm) might not see spending $300M plus to acquire Basware as the best use of their funds strategically.

We've also seen this week the announcement of Basware's partnership with Mastercard to provide an innovative new e-payment solution "that ensures suppliers are paid fast upon invoice approval, while also extending payment terms for buyers". We'll look into this further shortly, but it's another indication of Basware looking to be a much more high-profile player in the market, and of an exciting time in the procurement and supply chain solutions world!

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