strategy until end of 2015
aims for accelerated global growth
Basware announced the updated strategy in September 2012. The updated strategy for 2013-2015 focuses on accelerated global growth both organically and through acquisitions, which facilitates positive development of operating profit margin.
Basware's strategy in brief:
The key objectives include accelerated growth in the transaction volume, strengthening our market position in selected key markets, more accurate segmenting of our services and products to companies of all sizes, with particular attention on small and medium-sized enterprises, developing customer loyalty, and improving the company’s profitability.
150 million transactions in 2015
By the end of 2015, Basware aims to become the largest business commerce network for buyers and suppliers. Basware’s objective is to reach 150 million transactions in 2015.
Basware’s long-term objectives for net sales and operating profit remain unchanged. The long-term objective is to grow 15-30 percent in net sales annually boosted by over 50 percent growth in Automation Services. The company's long-term objective for operating profit margin is 15-20 percent of net sales, improving towards the end of the period. The share of recurring revenue is aimed to grow to 70 percent of net sales, with Software as a Service (SaaS) and electronic invoicing contributing most to the growth, thus improving the profitability.
Market leadership of Purchase-to-Pay solutions globally
Today, Basware is the global market leader in Purchase-to-Pay (P2P) solutions with close to 2,000 software and SaaS customers in Invoice Automation and Procurement and approximately 800,000 active organizations transacting through the Basware supplier and buyer network for invoices and purchase messages. Basware’s focus markets - the P2P software and e-invoicing markets - are expected to grow substantially over the next few years, especially in the geographical areas where Basware is already well-positioned.
Basware’s business is based on automating procurement and accounts payable and receivable processes within and between organizations. Basware offers all products and services through a global cloud. The services are hosted in a few key locations, which meet the highest service level requirements of private and public organizations.
Basware is the global product category leader in P2P. The company’s product and services strategy is geared around category leadership. In the center of product strategy is Alusta, launched in early 2012, that is a cloud-based flexible platform for P2P technology, built on open standard. Alusta is strongly offered as a service and supports Basware’s strategic transformation to a services company. The demand for both SaaS services and cloud-based services is expected to increase in the future.
Renewed sales & marketing model
Basware will intensify its go-to-market activities in order to reach higher growth by segmenting customers by size and by buyers’ and suppliers’ organizations. Special attention will be placed on small and medium-sized organizations. Company’s go-to-market activities are expanded with channel and online sales on top of direct sales. Basware is looking for partners that are providing outsourcing services for financial processes for global organizations. The company is looking for service providers and accounting firms as partners for small and medium-sized organizations. Such partners act as Virtual Operators or Sales Agents. Additionally, the company will support organic growth through acquisitions.
Basware’s solutions and services are
available globally. The company aims to increase its global presence by
increasing its service provisioning and delivery activities for supplier
customers while putting additional emphasis on sales on selected key markets
for getting a higher share in P2P software and services business. These markets
offer significant upside potential for the company in terms of market share and
transaction volume, organically and in the form of potential acquisitions.
In the strategy period, Basware aims to significantly increase the number of new customers for its products and services. Basware will support new customer acquisition by centralizing and automating the marketing lead generation process, thus creating an increasing number of actionable leads for sales operations.
Improving profitability during the strategy period
Realizing the strategy will improve the profitability of the company in several ways over the strategy period. The benefits of the new strategic profitability drivers are partially offset by investments required for the growth.
- SaaS and electronic invoicing offer the benefits of a scalable business model where technical platforms can take up new customers without having to invest into infrastructure in the same proportion that the revenue grows
- Partner and online channel will contribute positively to the profitability in the long run. Strong investments in Basware’s online channel will be carried out during the strategy period.
- Delivering standardized products and services enables optimum resource utilization and scalable processes across the company.
- Basware will continue expanding the use of lower cost base sourcing of resources in its operations globally for the needs of the growing business. In addition to the current R&D and transaction services production, use of offshoring will continue in customer support, project delivery and internal support functions.