Accounts Payable Content

2020 Predicaments and Predictions in Procure-to-Pay: Issues with E-Procurement, Invoice-to-Pay and AP Automation [PRO]

(Editor’s note: Spend Matters’ analysts are taking on the new year by looking at their areas of procurement technology to see what’s broken and what can and should be fixed this year. Here, analyst Xavier Olivera lays out the predicaments faced in the procure-to-pay sector. And for our PRO subscribers, this post also offers his predictions for 2020.)

The market for procure-to-pay (P2P) solutions — including its submarkets for e-procurement, invoice-to-pay and AP automation solutions — came a long way in the 2010s.

For e-procurement providers, we saw a strong focus on improving the overall user experience of their tools; a push to help organizations increase their percentage of spend under management; new approaches to identifying and eliminating maverick spending; and increased availability of intelligent analytics that can recommend strategies and action items that lead to better purchasing decisions.

Invoice-to-pay providers, for their part, didn’t sit still either. In fact, many solutions in the I2P and AP automation sectors evolved to better digitize and automate processes around invoice capture, validation and approval — primarily through the application of AI and machine learning to their tools.

That doesn’t mean there aren’t still problems, of course. So as we start 2020, we wanted to take a step back and look at two persistent predicaments in the P2P space that procurement organizations and their technology providers are facing:

* In e-procurement, there’s one problem in particular that will continue to plague vendors over time, requiring new capabilities and creativity to solve it: the need for procurement organizations to generate new savings year after year, especially when savings tend be viewed as related to sourcing while P2P is viewed as more transactional and focused more on efficiency savings.
* In I2P/AP automation, the real challenge is to support the broader organization's goal of improving cash flow and optimizing working capital while balancing the needs of suppliers, who want to be paid as soon as possible. Balancing these goals requires improvements in the current P2P solutions capabilities, such as by incorporating functionality for payment processing, supply chain financing, and the ability to move money worldwide at a lower cost (especially in cross-border payments).

We consider these two challenges critical not just for procurement transformation but also for supporting value creation across the whole business. So now that we are entering 2020, this Spend Matters PRO also offers some predictions in regards to these challenges for what we believe P2P providers will do this year — or at least we wish they would. Issues include the need for total costs to be calculated in e-procurement, and for better P2P answers to working capital, financing and payments.

Basware: Vendor Snapshot Update (Part 3) — Competitive and Summary Analysis [PRO]

Basware faces significant competition from multiple segments of the procure-to-pay market. It competes against a range of vendors, including ERP providers that offer e-procurement and supplier network capabilities (along with varying degrees, based on vendor, of e-invoicing capabilities). It also competes against e-invoicing and supplier enablement specialists, regional supplier network/e-invoicing providers, independent e-procurement providers and traditional AP automation and scan/capture providers.

As a trend, competition is increasing (not decreasing) for Basware, which represents a challenge given the lack of brand awareness within procurement and P2P. Further, the marketing effort it has expended thus far in the trade financing area (which has not yet resulted in material payables or receivables financing volume) and the fact Basware is largely unknown in North America as an e-procurement provider also represents hurdles from a competitor perspective.

This final installment of our three-part Spend Matters PRO Vendor Snapshot Update series covering Basware offers a competitive analysis and comparison with other procure-to-pay, AP automation and supplier network providers. It also includes a SWOT analysis and summary evaluation and selection considerations. Part 1 and Part 2 of this Update series provided a company and deep-dive solution overview, product strengths and weaknesses, and a recommended fit analysis for what types of organizations should consider Basware’s product line.

Basware: Vendor Snapshot Update (Part 2) — Product Strengths & Weaknesses [PRO]

contingent workforce

Basware, a Nordic procure-to-pay (P2P) provider that until recently adopted a conservative global growth strategy, is not as well known outside its customer base for its set of differentiated and robust capabilities, especially in the AP automation, e-invoicing and supplier network areas. Through its acquisition of Verian, it added sufficient e-procurement capability to compete against other best-in-class purchasing technology providers (previously, its cloud-based Alusta platform, which forms the basis of its AP automation and invoicing capability, was not competitive in the e-procurement market against specialized providers). In the trade financing area, we have applauded Basware in the past for taking a highly strategic approach in partnerships to both payables and receivables financing. And we now applaud its more competitive approach in adding partnerships to its multi-funder capability and “on demand” programs.

This Spend Matters PRO Vendor Snapshot Update (Part 2) explores Basware’s strengths and weaknesses in the P2P, supplier network and trade financing areas, providing facts and expert analysis to help organizations decide if they should shortlist the vendor as a potential provider. Part 1 looked at updates since our 2016 brief, offering a company and detailed solution overview, as well as a recommended fit suggestion for what types of organizations should consider Basware. Part 3 will include analysis and commentary.

Basware: Vendor Snapshot Update (Part 1) — Background & Solution Overview [PRO]

FM Global Resilience Index

Basware is one of the largest technology providers in the global procurement and accounts payable software market. Founded in 1985 in Espoo, Finland, as Baltic Accounting Systems to deliver enterprise finance software solutions, the company has grown from a small-country player to a global platform that processes over 650 billion euros annually (2018). It has been public since 2000 and is traded on the NASDAQ OMX Helsinki Ltd. as BAS1V.

The company also manages one of the largest e-invoicing and B2B commerce networks, and Basware supports its global customer base through an operational footprint that spans more than 175 countries on six continents and includes more than 100 partners and resellers. Yet while Basware has greatly improved its e-procurement capabilities, its great strength against peers remains its invoice-to-pay and business network capabilities, as we show in our SolutionMap vendor rankings. Basware also stands out in the procure-to-pay space, with its increased use of machine learning technology.

This Spend Matters PRO Vendor Snapshot Update looks at Basware’s developments since our 2016 series on it. It explores Basware’s P2P and network capabilities, including strengths and weaknesses in the market, providing facts and expert analysis to help procurement organizations decide if they should shortlist the vendor. Part 1 of our analysis provides a company and detailed solution overview, as well as a summary recommended fit suggestion for what types of organizations should consider Basware. The remainder of this three-part series will offer details on strengths/weaknesses, a user-selection guide, user interface (UI/UX) analysis, competitive alternatives and evaluation, and selection considerations.

Why would Medius buy Wax Digital? (Part 3: Strategy and competitive landscape analysis for AP automation and invoice-to-pay)

This Spend Matters Nexus research brief explores the potential competitive impact of the Medius and Wax Digital combination on the AP automation and invoice-to-pay markets. It also explores the strategies that some providers within these groups are already pursuing (or may pursue) in response to customer requirements, competitive pressures and the desire to expand the overall total addressable market, or TAM, for the AP automation sector and related opportunities.

AP automation and invoice-to-pay vendors compete in a market that is growing and changing by the day. This market counts AP specialists such as Accrualify, AvidXChange, Beanworks, SAP Concur, Symbeo, MineralTree, Medius, Yooz and dozens of others, as well as broader procure-to-pay providers such as Basware, Corcentric, Coupa, Oracle, SAP Ariba and Tradeshift. I previously described this market as “hot, hot, hot.” And I stand by that hyperbole.

Some of these providers have chosen to focus on the core of AP workflow and invoice processing; others have coupled AP automation with adjacent areas (e.g., payments and/or financing); and still others are more dramatically attempting to expand the value proposition that links AP to broader finance (and even procurement) functions through expanded modules and capability, including to procurement.

If you are just coming up to speed on the Wax Digital-Medius combination, start here with this Nexus series — (Part 1: Company backgrounds, product strengths/weaknesses, deal rationale) and (Part 2: Wax strengths, customers, integration considerations). Free Spend Matters’ news coverage of the deal can be found here and here.

Jason Busch serves as Managing Director of Spend Matters Nexus, a research and advisory group that works with sponsors, CEOs and boards on due diligence, M&A strategy and product strategy. Spend Matters and Spend Matters Nexus are owned by Azul Partners. Disclosure: Azul Partners served as an adviser to Marlin Equity in the Wax-Medius transaction.

Why would Medius buy Wax Digital? (Part 2: Wax strengths, customers, integration considerations)

Yesterday, AP automation specialist Medius announced it was acquiring Wax Digital, the UK-based source-to-pay suite provider. Together, they hope to carve out a unique niche in targeting procurement and finance organizations primarily in Europe and North America (although both have global customers and users).

In Part 1 of this Spend Matters Nexus series, we provided an overview and introduction to Wax Digital and Medius, touched on the product strengths and weaknesses for Wax, and explored the rationale for the transaction.

As we continue our analysis today, we add in the customer voice to the mix, specifically focusing on Wax Digital’s economic buyers (e.g., CPOs, procurement VPs, etc.) and what they think about the solution, because customer feedback is one way we score solutions for our free vendor ranking system, SolutionMap. We also will go deeper on some of the more specific strengths of the solution at the platform and functional levels, and explore how this might affect users of the combined solution. And we’ll look at integration touchpoints for Wax and Medius.

Later this week and next, we will continue our exploration of the combination, delving into the impact on the competitive landscape, including an analysis of how the combination may affect competitive AP automation and invoice-to-pay vendors as well as procure-to-pay and source-to-pay suites. Finally we will explore how the total addressable market (TAM) expands when combining finance and procurement together. TAM is a key metric that sponsors use to analyze investment opportunities.

Jason Busch serves as Managing Director of Spend Matters Nexus, a research and advisory group that works with sponsors, CEOs and boards on due diligence, M&A strategy and product strategy. Spend Matters and Spend Matters Nexus are owned by Azul Partners. Disclosure: Azul Partners served as an adviser to Marlin Equity in this transaction.

Tradeshift: Vendor Snapshot Update (Part 1) — Background and Solution Overview [PRO]

Tradeshift is a cloud platform that connects buyers and suppliers with the goal of digitizing supply chain relationships, processes and information, while also enabling everyday procure-to-pay activities. Its capabilities span the buying of goods and services through to financing and payment — and significant capability in between, especially in the invoice-to-pay area.

In addition to providing its own procure-to-pay modules, Tradeshift offers an open integration framework that allows other technology firms (and customers) to integrate and/or development third-party apps, primarily centered on supplier connectivity, transaction enablement and collaboration. Tradeshift can even integrate alternative procure-to-pay providers in cases where specific enabling capability is desired.

This three-part Spend Matters PRO analysis provides an update on Tradeshift capabilities, both as a platform-as-a-service (PaaS) provider and as an e-procurement and invoice-to-pay technology vendor.

The updates since last year's review include information about real-time collaboration; a single sign-on; centralized access to POs, invoices, etc.; an AI-assisted chatbot named Ada; buying topics about GPOs and direct materials; global support; and new sections on payments/trade financing, analytics, services, integration and technology like blockchain.

The PRO analysis is designed to provide facts and expert analysis to help procurement and finance organizations make informed decisions about whether they should consider Tradeshift for both traditional “in-the-box” procure-to-pay requirements as well as unique marketplace/platform-type digital initiatives.

Part 1 of our analysis provides a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Tradeshift as a complement to other procurement and finance solutions. The remaining parts of this research brief will cover product strengths and weaknesses, competitor and SWOT analyses, and insider evaluation and selection considerations.

How the Traditional Role of the CFO is Becoming More Digital, Data Driven, and Strategic


The role of the CFO has changed dramatically in recent years, primarily affected by the large-scale introduction of digital practices in the work environment. Traditionally the role of finance leaders has been confined to finance optimization tasks, but they now find themselves confronting new challenges and becoming increasingly involved in the overall strategy of the company. They are realizing that if they optimize finance processes such as invoice processing (AP) and access the data housed in the AP department, they will be better able to manage cash, control spend, contribute to profits, and mitigate risk. And they will find ways to use the data to make more strategic decisions. This changing role is reflected by 10 major transformations.

Defining AP Automation Functional Requirements (Part 5: Payment Options and Early Payment Financing) [PRO]


In the last installment of this five-part Spend Matters PRO series on accounts payable automation, we’ll list the functional requirements for payment options, like P-cards and financing programs.

AP automation capabilities vary dramatically between different software providers, and the capabilities a finance or procurement organization will require to support the automation of AP processes also vary materially, based not only on company size but a broad range of other factors. These include organizational complexity, invoice capturing requirements (e.g., paper, PDF, electronic, etc.), systems complexity, systems integration, industry, EDI integration/support, payment/financing capabilities, treasury integration/working capital management, geography and compliance requirements — to name just a few.

To understand how different providers stack up against these (and other) categories of requirements, the quarterly Invoice-to-Pay SolutionMap Insider report can provide significant insight. And to create a one-to-one map between business requirements for AP automation and vendor functionality capability, SolutionMap Accelerator can dramatically speed up the vendor shortlisting and selection process, even allowing companies to “skip the RFI” entirely.

This series defines AP automation requirements from a functional perspective to put AP, finance and purchasing professionals in the driver’s seat when they evaluate the available supply market for AP automation to fit their needs (either on a standalone basis or as a specific component of broader invoice-to-pay, procure-to-pay or source-to-pay solutions). Click to see our SolutionMap rankings of vendors in each category.

Part 1 of this series investigated core invoicing requirements for AP automation and some of the criteria that Global 2000 and middle market organizations should consider when selecting solutions (i.e., invoicing set-up, paper scan/capture support and e-invoicing).

In Part 2, we turned our attention to an additional set of AP automation functional requirements, including AP process, invoicing validations, workflow, collaboration and integration requirements.

In Part 3, we looked at the final set of AP automation topics: invoicing mobility, invoicing compliance and invoicing analytics.

In Part 4, we examined AP automation functions related to payment systems and methods, payment partnerships, payment processing and payment analytics.

Now, let’s look at payment options and early payment financing.

Tipalti and the Accounts Payable Automation Market: Now Officially Hot, Hot, Hot!


Earlier this week, you may have seen that Tipalti raised $76 million in a Series D funding round. For those who do not know Tipalti, it is one of a variety of accounts payable automation (and payment providers) in the B2B market.

With a primary emphasis on middle market companies, Tipalti’s AP automation competitors include both broader procure-to-pay vendors that also come down market (e.g., Basware, Corcentric, Coupa, SAP Ariba, Tradeshift, etc.) and a diverse set of accounts payable automation specialists, including Accrualify, AvidXChange, Beanworks, SAP Concur, Symbeo, MineralTree, MediusFlow, Yooz and dozens of others.

It’s our view that Tipalti’s funding round is proof positive that the AP automation market is truly hot.

A look into the future: AP automation and Basware’s roadmap

AP automation holds a lot of promise for businesses that want to reduce manual tasks, improve insights into transactions and create value for customers. But the choices of procurement software can be dizzying. In a previous article in this series, we looked at how and why digital transformation will vastly reshape procurement and finance roles. In this article, we’ll examine how one provider is addressing that change.

We asked Basware’s analyst relations specialist Jeff Meredith to discuss what future capabilities the suite provider sees on the horizon. Basware’s roadmap includes more developments in spend analytics, better ways to identify risks, and an increased focus on the supplier experience. Spend Matters' procure-to-pay specialist Xavier Olivera offers a market perspective afforded by assessing demos and doing interviews for SolutionMap, which ranks more than 50 procurement providers.

Mastercard Track adds payment features in bid to disrupt B2B market


Mastercard is ramping up its effort to be a player in the B2B payments market by adding payment tools for Mastercard Track, its product launched in 2018 that intends to make inroads into the procure-to-pay technology space.

This week, Mastercard Track announced in a press release that it has added the product Business Payment Service, describing it as “a single connection bringing together multiple payment types, greater control and richer data to optimize B2B transactions for both suppliers and buyers.”

Automation of accounts payable and facilitating payments are hot topics in P2P, and Spend Matters’ analysts have been covering the issues with our PRO subscription series defining AP automation and an in-depth look at Mastercard Track, introducing its capabilities and analyzing its potential to disrupt the market.