When I first started researching and covering procurement, it was rare to find an article in a popular newspaper or magazine about the area. But now, it seems to happen at least once a week. Just this weekend, The New York Times published a highly insightful piece on the high-interest, high-stakes world of purchase order financing. According to the story, "It is a relatively new line of business ... and a twist on the ancient and much larger practice of factoring, in which a business sells an invoice at a discount to get its money faster, providing the factoring company with a hefty fee." But, "Purchase-order financing, though similar to factoring, is further up the financial food chain. Purchase orders are written guarantees from a buyer that it is committed to purchasing a product. By financing purchase orders ... [the lender] essentially pays the factory to manufacture the goods."

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In the first of this two-part series on the new enterprise spend analysis product from Rosslyn Analytics, I tackled some of its spend visibility basics, such as how does the solution handle data, acquisition/management, enrichment, and basic spend queries. In this second and final part of the series, I’ll focus on what makes this solution stand out from a crowded field of spend analysis players. But before we get into specifics, it's worth restating (as Rosslyn articulated to me to me earlier in the month, and as other competitors in the sector also have told me of late) that the current and recent deal environment has been very strong. My own intelligence confirms this. So what's clear is that the overall pie slice of the spend analysis market is growing at a rate that is significantly above and beyond that of what industry analysts predicted. In fact, I'd wager than in 2010 we could easily see an overall sector CAGR exceeding 25% (potentially 50%, if you factor in some of the new capabilities, services, and content that spend analysis providers are bringing to bear, which don't necessarily fit how we've come to define spend visibility tools in the past). Which brings me to some of the areas that make Rosslyn Analytics jump out from the pack.

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In the first column in this series highlighting Basware's latest connectivity offerings, I talked on a high level about how this offering fits in the context of Basware's overall P2P footprint. In today's analysis we'll go deeper, examining how Basware's open connectivity solution works in practice, which will explain why the solution represents the company's fastest growing offering and revenue line item. In short, the solution's flexibility and ability to sit on top of other invoicing and document exchanges/clearinghouses/networks has enabled Basware to position its connectivity solutions as a complement to other investments that both buyers and suppliers in a particular customer procurement and payment ecosystem have already made.

Historically, especially on a global and cross-border basis, it has been very challenging for companies to connect all of their suppliers through a single approach, let alone a single network. Basware’s connectivity solutions aim to change this and, in doing so, provide a more complete solution that increases the overall efficiency of A/P organizations, driving new levels of visibility, operational cost reduction, and working capital visibility and levers. Not to mention driving a greater percentage of invoicing activity to a virtual, e-invoicing environment.

As one example, consider how in less than five years Lloyds has shifted the great majority of their invoicing down an electronic path. While today, they still must handle 233,000 paper invoices per year, they now receive roughly 80% of their activity virtually, or some 1.163 million e-invoices per year. This has resulted in a high A/P efficiency level. Consider that a single FTE can manage 129,000 invoices per year at Lloyds and that 9 A/P resources handle all of the firm's invoicing requirements. And compare this with more typical top performing A/P department with electronic workflow which handle roughly 35,000 invoices per year according to Hackett Group and Basware.

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In early fall -- way back during the first weeks of September -- I had the chance to catch up with some folks from the Basware team in London to learn more about the software provider's new offerings and strategy for 2010. I followed up with them again the following month, when I also conducted a detailed customer-reference call. During these discussions, it became quite clear to me that this was an organization with a really well thought-out strategy for capturing a larger percentage of the market for invoice automation/EIPP in 2010 and beyond. Moreover, it also became apparent that Basware was embracing a more open approach than most, one that places particular emphasis on connectivity partners to further improve the overall value proposition to prospects and customers. Starting today, I’ll tackle this topic in a series of posts highlighting the evolution of Basware’s strategy, and the types of results customers are seeing as a result of the products it has released to date.

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There seems to be a fallacy on the provider side of the Spend Management market that On-Demand or SaaS business models do not require the same level of expert third-party services and implementation support as installed solutions. More and more, I see a number of vendors -- even those hawking both cloud and enterprise variants of their applications -- pitching themselves as one-stop shops to prospective customers. For some areas of the Spend Management sector, these arguments have some merit (e.g., for spend visibility, I see absolutely no reason to have three or four separate entities running around -- even under the same contract -- to make a solution work; that's a recipe for coming up short and/or spending too much). But when it comes to other areas of the Spend Management equation, there are numerous reason why the consulting and SI implementation ecosystem still matters. I'll toss out three here:

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