Category Archives: Vendor Review

Is MRO Inventory Bogging You Down? Maybe You Need a Bit of Xtivity? Part I

Inventory optimization is tough, but maintenance, repair, and operations inventory management is even tougher because the parts just sit there until they are needed — and sometimes, either due to proper maintenance or just good luck, the critical part you are stockpiling for your production line sits on the shelf three times longer than expected while other times the critical part has to be replaced twice as often as the vendor who sold you the machine told you it would have to be.

The last thing you want to do is get the stock levels wrong because inventory is expensive. In addition to the capital that is tied up in the inventory, there are the facility storage costs (which include rent, overhead expenses for services like security, and property taxes) and the possession costs that include, but are not limited to, clerical costs (to track the inventory), insurance (to insure the inventory as a whole), theft (as the insurance policy will have a deductible and a maximum claim), taxes (when the organization takes possession), deterioration (as some inventory will get damaged or spoil), depreciation (as most components decrease in value over time), and obsolescence (if the inventory cannot be used in time). Having inventory sit idle is very costly.

To make matters worse, many of these parts are very expensive and often have no residual value if unused. Whereas unpopular consumer packaged goods can often be sold at fire-sale prices which will allow you to recover some of their cost, this is not always so with MRO. This is because the parts are typically only useable within a particular machine on your production line and by the time you shut it down, chances are that the supplier is no longer selling the machine and most of the suppliers’ other customers are no longer using the machine as well. In addition, many MRO parts and supplies, especially in the chemical, pharmaceutical, and high-tech industries, have specific storage requirements (cool, dry, etc.) and this makes the storage cost even pricier than for regular (consumer) goods.

With typical inventory carrying cost eating up approximately 25% to 40% of a company’s annual inventory investment, the last thing you want is too much inventory, especially since certain MRO categories with special storage requirements and a high risk of obsolescence can have amortized inventory carrying costs that are close to the total value of the inventory! Unless you like having millions tied up in inventory, you need to make sure that you optimize your MRO inventory to the best of your ability. If you can’t do that, don’t rely on creativity — that won’t be enough because just one wrong JIT (Just in Time) decision can bring your entire production line down for days and cost you Millions of dollars. If you don’t have a suitable platform and the expertise in house, don’t rely on creativity. Apply a little Xtivity instead.

Basware: P2P for the Global “E” Part IV

In today’s post, we continue our introduction to Basware, a Finnish provider of enterprise finance solutions that serves the global e-Commerce, P2P, and AP Automation marketplace with over 2,000 international customers that collectively do business with over 1 Million companies in over 100 countries. In Part II we discussed the AP Automation and Invoice Processing solutions, the full Purchase-to-Pay process coverage from the Procurement and AP perspective, and the full compliance with e-Commerce, Taxation and Digital Signature Requirements that they offer in over 50 countries. Then, in Part III, we discussed the Basware Commerce Network (BCN). An open commerce network that connects almost 1 Million companies in over 100 countries through 170 partner networks, the BCN currently delivers over 60 Million e-invoices per year with a combined value in excess of $420 Billion and Basware expects to be processing over 150 Million e-invoices a year by the end of 2015 with a combined value in excess of $1 Trillion dollars. Part of this increase will be as a result of Basware’s new partnership with Mastercard, which provides suppliers’ a guaranteed payment once the invoice has been approved, and an early payment option as well. In addition, buyers can have extended payment time if they need it. In addition, cross-border payments, which take over a week on average, are simplified and generally executed at a reduced cost to both parties.

Today we are going to focus on their analytics capability, called Basware Analytics. Basware built their analytics platform on top of Tableau Software‘s Data Visualization Engine, a high-performance data engine designed to allow for real-time data analysis, visualization, and reporting. Using this engine as a foundation, they focussed on designing an analytics application that was useable by the average Spend Management professional and that presented that professional with over 80% of the information across the P2P cycle that a Spend Management professional needs immediately upon log-in.

Over time, Basware has built a suite of package reports that cover 80% of a Spend Management and Finance organization’s need for process and spend visibility to drive process efficiency. In addition, they provide a suite of templates that can be easily altered in such a way that, in most organizations, users are able to build reports that quickly cover most of the reporting needs not covered out-of-the-box within a few hours of deployment, and gradually build reports, possibly with the help of Basware’s services organization, that will let them achieve the remaining 20%.

The solution was designed from an AP and Procurement perspective and in addition to standard procurement reports which include, but are not limited to, total spend, geographical spend by organization or cost centre, top suppliers, top products, invoices received, procurement KPIs, and maverick spend, there are accounts payable reports which include, but are not limited to, invoices received, invoices received with or without a contract or PO, cash flow analysis, spend by supplier analysis, AP KPIs, AP Process and Cycle Times, and AP Financial metrics. Each report allows for real-time drill down and filtering on any dimension. Because the underlying analysis engine has been built to sit on top of all invoiced spend and related P2P data, the platform can address spend visibility, supplier performance, procurement performance, contract compliance, catalog coverage, cash forecasting and management, accounts payable and invoice management. With the visibility provided, you can dive into opportunity identification, process optimization, and rationalization.

Users can access the template behind any report and quickly customize it by adding or removing available dimensions, customizing filters, and tweaking the layout. A user can select which of the available data sources1 (which have been mapped to a common schema) she wants to use, specify the dimensions of interest (to build the cube), define the default ranges and allowable filters, choose the graph types, and modify the layout. The application supports all of the standard graphs and charts, including cloud charts (which is great for looking at search term history or the most common products and/or services being bought) and tree-maps, which give a quick visual representation as to which supplier, cost centre, product, etc. is accounting for the most (maverick) spend. It’s one of few, and most effective, implementations of cloud charts and tree maps that SI has seen to date.

The user does not require any technical skills to modify the templates to adjust or create new reports. This solution is optimal for giving more people within the organization real-time access to spend and process metrics, and allows the Procurement and Finance organizations to begin their spend analysis journey immediately. (In addition, if the user needs help or wants to add custom data sources, Basware has professional services personnel in North America, Europe, and Asia Pacific and offers a broad suite of support services, including supplier activation/onboarding, in 10 languages: English, Finnish, Swedish, Norwegian, Danish, Dutch, German, French, Spanish, and Portuguese.)

1 Even though reports are limited to Basware’s data sources out of the box, the customer has an option to extend the reporting solution to other data sources through the use of other Tableau Software tools leveraged by Basware.

Basware: P2P for the Global “E” Part III

In yesterday’s post, we continued our introduction to Basware, a Finnish provider of enterprise finance solutions that serves the global e-Commerce, P2P, and AP Automation marketplace with over 2,000 international customers that collectively do business with over 1 Million companies in over 100 countries. Yesterday, we focussed on the AP automation and invoice processing capabilities. Today we are going to discuss the e-Invoicing functionality and the Basware Commerce Network.

The Basware Commerce Network (BCN) is an open commerce network that connects to almost 1 Million companies in over 100 countries through over 170 partner networks which include B2BE, Cortex, Crediflow, Crossgate, Danske Bank, Edisoft, Elemica, GHX, GXS, Hubspan, Tradex, Unified Post, Ximantix and over 150 others. Customers on the Basware Commerce Network can send and receive e-Invoices and e-Documents to any company connected to the BCN through one of the partner networks free of charge1. The BCN, which has implemented tax compliance in more than 50 countries, currently delivers over 60 Million e-Invoices per year (with a combined value in excess of $420 Billion) and Basware expects to be processing over 150 Million e-Invoices a year by the end of 2015 (which will have a combined value in excess of 1 Trillion dollars).

A key feature of the BCN is that it was designed to be used by, and equally support, senders and receivers. Note that we are not using the standard terminology of buyers and suppliers because, whereas some networks were designed to be buyer centric and support the buyer who is receiving tens (or hundreds) of thousands of invoices a year, the solution was designed for companies who are receiving tens (or hundreds) of thousands of invoices a year and for companies who are sending out tens (or hundreds) of thousands of invoices a year. Since Basware started out as a enterprise finance platform, and not an e-Procurement platform, they have a unique take on P2P and design their solutions to enable both senders and receivers (and suppliers and buyers) equally. As a result, the solution is just as likely to be acquired by a large (CPG) manufacturer or apparel distributor which only receives a few invoices for raw materials but sends out ten to one hundred times as many to its customer base of all sizes that orders frequently and in small amounts.

Another key feature is that when the BCN is working flawlessly, it’s invisible. The entire point of the network is automatic delivery and automation of e-Invoice and other e-Document processing, which will either be done through a module in Basware’s application suite or your existing ERP, MRP, or AP solution. As per our last post, Basware has already integrated with over 250 ERP, MRP, AP, and other back-office systems and, if you already have a system for processing the e-Invoices, purchase orders, and other e-Documents sent over the network, it will push the documents into (and pull the appropriate documents and confirmations from) those systems. If your existing system is “plugged in” to the network, you’ll never have to use the portal2. Typically, a person in the receiving party will only log into the portal to verify that an invoice has been received when he gets a call from an individual in the sending party3 (and does not have access to the processing system — for example, the supplier might call up the account rep to ask if the invoice was received instead of someone in Accounts Payable). And typically the only senders who will sign into the portal are small suppliers who haven’t integrated the BCN into their Accounts Receivable / Back Office invoice management software and want to send an invoice over the BCN (to insure prompt receipt, processing, and payment capability).

With the BCN, it’s possible for an organization to achieve 100% e-Invoice penetration. Because the BCN supports receipt of invoices by EDI, XML, inter-operator networks, direct connect, virtual printer, Scan-and-Capture, Cloud-scan, e-mail (Lite)4 and even keyed-in by the supplier, which covers every methodology a supplier may use to send an invoice, customers of the BCN can achieve 100% paper-free invoice processing (and have in countries with strict e-Invoicing requirements, such as Brazil, Finland, Sweden and Norway). Note that they have multiple scan solutions — you can scan it and key it in locally through the BCN portal, and attach the scan; you can have it sent to your OCR provider that is plugged into the BCN; or use Basware’s Cloudscan which will take the scan, process it, and push it into your e-Invoice solution, flagging any exceptions or scanning issues that need to be manually addressed.

The supplier portal is designed to be quick and easy to use, and is divided into four main sections, current work-view, inbox, sent and purchase orders. In the current-workflow, the supplier sees all of the incoming events that need to be processed; in the inbox, the supplier sees the incoming purchasing orders, associated messages, and status updates from the buyer; in the sent tab, the supplier sees the invoices they sent through the network, associated messages and status updates they provided; and in the purchase order tab they can search purchase orders and dive into the details of the purchase order, view line items, retrieve attached files, view the processing history, and pull up associated invoices that they sent to the buyer.

Since the network is designed to integrate with the buyer’s current ERP, MRP, AP and back-office systems and Basware P2P modules, the buyer portal is equally minimal and easy to use. The buyer can log in to search and view incoming invoices, send messages or queries to the supplier about those invoices, and run reports on the invoices in the system to query the number, and ids, of open invoices, invoices by supplier, invoices unpaid, etc. Since there was no need to duplicate the functionality in the other Basware modules and/or the other back-office systems currently in place in most customer organizations, Basware designed the portal to support quick and simple confirmational queries and messaging between the buyer and supplier, and it does this quite well. In addition, all discussions are included in the audit trail and can be retrieved at any time.

And the proof of the value is in the e-Invoice pudding it supports. A Major Engineering firm in the Netherlands that was receiving over 150,000 (paper) invoices a year was able to replace over 50% of these paper invoices with e-Invoices in less than six months and automatically match more than 80% of them, which translated into a 60% reduction in manpower required for invoice processing (which had an associated cost of 6.5 FTEs). A leading energy company in Europe which received over 700,000 (paper) invoices a year was able to convert over 50% of its suppliers to e-Invoices in six months by partnering with Basware to help it with a global supplier activation (on-boarding) program. A leading mining, construction, oil & gas, and pulp and paper company in Brazil was able to achieve 100% e-Invoice penetration with the help of Basware which, with its Cloudscan solution, was able to help the company help its suppliers push 100% of its 200,000 plus annual invoice volume through the BCN. And it’s not just buyers who have invested heavily in the BCN. One of the largest CPG companies (with a market cap in excess of 30 Billion) uses the platform to send over 400,000 invoices electronically in Scandinavia and nearby countries in the EU. No matter how big your e-Invoicing need, Basware and its BCN can handle the volume.

1 Free of charge is conditional on delivery mechanism used. Portal (invoice key-in and PO flip) and sending e-invoices via email are free for the supplier and a buyer can receive e-Invoices through the portal free of charge from a sender.

2 However, you still may want to use the value added services of the portal which include, but are not limited to, tracking invoice status and collaborating with your business partners.

3 Who could log into the supplier portal to get the same information, but, due to technical issues on the supplier side, is unable to do so at that particular point in time.

4 Scan-and-capture refers to in-house scanning and OCR (optical character recognition), cloud-scan refers to outsourced scan-and-capture, and e-mail Lite is Basware’s solution for receiving invoices via e-mail.

Basware: P2P for the Global “E” Part II

Late last fall, we introduced you to Basware, Procure-to-Pay for the Global “E”. Founded in 1985 in Espoo, Finland (as Baltic Accounting Systems), Basware has been delivering enterprise finance solutions for almost 30 years. Since its humble beginnings, it has grown to one of the largest global players in the Procure-to-Pay marketplace with over 2,000 international customers that collectively do business with over 1 Million companies in over 100 countries. In order to support this global customer base, Basware has had to create an operational footprint that spans over 50 countries on 6 continents which includes over 100 partner and resellers, including MasterCard and BravoSolution.

In our initial post, we noted that one of the most unique features of the platform is the fact that it spans the full AP and P2P cycles, whereas many of the smaller P2P and e-Procurement platforms are Procurement centric, with little support for AP. From the procurement side, the platform contains modules for analytics, basic sourcing, contract management, catalog management, e-Procurement, and e-Invoicing. From the AP side, the platform contains modules for e-Invoice Receipt (through the Basware Commerce Network), e-Invoice Processing, e-Invoice Matching, e-Payment, and Analytics. Furthermore, all modules are integrated with a consistent look-and-feel and all modules are available on top of Basware’s new cloud-based Alusa platform that supports (multi-)enterprise private cloud instances.

In that post, we noted we would dive deeper into AP automation and (e-)Invoice processing, matching, and payment capabilities; the Basware Commerce Network (BCN); and the associated analytics in later posts. This is the first post in that series, focussing on the AP automation and invoice processing capabilities.

The invoicing module, which works pretty much as you would expect based upon standard definitions and features implemented by their North American counterparts, has a few unique features that deserve to be highlighted. Namely:

  • full compliance with e-Commerce, Taxation, and Digital Signature Requirements in over 50 countries
  • full Purchase-to-Pay process coverage from the Procurement and the AP perspective
  • integrated plans and workflows

Even though North America might be behind when it comes to e-Commerce and digital signatures, and many of the North American Procurement providers might be behind when it comes to recognition of the various types of taxes and tax codes that exist around the world, Basware, which has been supporting (e-)commerce around the world for over a decade, is up to date on all of the digital signature requirements, tax codes, and audit trail requirements. With Basware’s solution, chances are you’re ready to conduct business in every country you operate in out-of-the-box. Basware has already been integrated with over 250 ERP, MRP, AP, and other back-office systems and e-Document/e-Invoice formats supported include, but are not limited to, Finvoice, Teapps, E2B, eHF, OIOXML, cXML, EDIFACT, UN/Cefact, CSV, EDI ANSI X12 (810), Svefaktura, OIOUBL, UBL, openTrans, and SAP iDOC.

Since the Procurement module directly integrates with the AP module, as soon as the invoice is received, it can not only be automatically matched (against any and all e-Documents that are appropriate), automatically processed for approval using the appropriate user-defined rules, and routed as required for error processing or manual approval, but analyzed from a financial perspective. What is the cash-flow impact of paying early, on time, or late? How long is it taking to get through the manual processing queue versus average processing time and what impact is it having on average cycle time? Are the payment terms in line with organizational standards?

One interesting capability of the AP Automation solution (which includes Basware Invoice, Basware Match-Orders, Basware Match-Plans, Basware Mobile, and Basware Analytics) is the ability to create and manage payment plans. Basware has found that 8% to 15% of invoices in an average organization are both ‘orderless’ and recurring. In order to handle these situations, Basware created plans that can be used to define a recurring invoice and special processing rules for dealing with them. For example, a cell phone bill will come in every month the cell phone is active. There is no reason that it can’t be automatically approved every month if it is within the expected and approved amount for the employee whom the cell-phone is assigned to. For example, the user can be assigned a base plan amount and a variable amount for long-distance charges, data charges, and/or roaming charges. If the amounts are within the maximums, or tolerances, the invoice can be automatically approved. If not, then the invoice will need to be routed to the employee’s supervisor or the budget manager for approval. All of this can be captured in a plan. The plan can define the source of the invoice, the purpose of the invoice, the different line items and charges that can occur on the invoice, different tolerances and limits for the base amount and variable amount, different approval routings for each rule violation, and an appropriate workflow, among other features. In addition, invoices can be flipped into plans. Furthermore, if an invoice contains additional or unexpected line items, they will be pulled out into separate cost allocations, which can then be added to the plan if required. Manual handling of the recurring invoice disappears completely if everything about the invoice is in-line with expectations and is minimized otherwise.

Finally, Basware estimates that it’s e-Invoice solution will bring a best-in-class €10.90 per invoice (and $17 USD) through its Basware Commerce Network, which will be covered in more detail in our next post.

B2BConnex – Connecting Companies the World Over Part II

In our last post, which re-introduced you to B2BConnex, a solution for e-Document Management that was designed to automate the end-to-end purchasing process and targeted at small and mid-sized manufacturing organizations still mired in the world of ERP.

We noted that, since our first posts on e-Document Management and automating the end-to-end purchasing process back in the 2010 time-frame, they have been hard at work and have increased the number of supported document types, added scorecard corrective action reporting (SCAR), the ability to have multiple configurations of the software for different geographies/countries/divisions/departments/plants, an improved shopping cart solution, more integration options out of the box, more usability features, and considerably more customization capability. We then dived into some of the new usability features, UI streamlining, reporting capability and some of the new configuration capabilities.

Today we are going to discuss the improved shopping cart, integration options, configuration options, and a few of the workflows more in depth.

Their catalog-based shopping cart works like you would expect, with the ability to search an individual catalog or all catalogs and be presented with a list of matching products complete with images, (partial) descriptions, price (with volume break) fields, default order quantity and add-to-cart button(s). One unique feature is that the application not only supports multiple languages, but allows each product to be associated with custom descriptions in any language the buyer or supplier chooses. This allows a buying organization to present the same catalog and interface to its users around the world, who can then select the language they want to see results in if the default language isn’t their native language. In addition, currency is also configurable and can be changed by the user as well. When the user goes to check out, the system automatically generates a purchase order template where the user can override the default billing, billing contact, shipping, shipping contact, and (requested) shipping method. Once the user confirms the order, the order, broken down by supplier, will be sent back to the client’s sales order system to generate an order there. Then, through the ERP’s fulfilment functions, the order can be used to generate one or more Purchase Orders which can be sent to the supplier through the B2BConnex Direct platform or Supplier Portal.

Once the supplier receives the PO, they can immediately accept it as is and return a Sales Order Acknowledgement, or, if they can’t deliver (all) of the requested items (at once), they can request modifications to delivery dates and order quantities and even request substitutions. In addition, if the supplier can deliver some products now and some products later, the supplier can split the line items and define the quantity that can be delivered now and the quantity that can be delivered later, each with associated delivery dates, and send the PO back with a modification request.

While the catalog-based shopping cart looks plain and simple with its “old-school” PO style, it’s actually quite sophisticated as it plugs into the B2BConnex Direct platform, which can deliver the purchase orders using a variety of methods, including, but not limited to, delivery through the B2B Supplier Portal, EDI to the supplier’s ERP, and XML or EDI (X12) to the supplier’s order management software. And all of this is configurable by the client in the sophisticated administration panel that allows the customer to define the document types supported, the delivery methods required (down to the plant level if need be), and any required mappings to translate from one format to another (which is important if the customer uses their own units of measure, abbreviations, or terminology and not what is expected in the EDI standard, for example).

In addition, there is a lot of security built in. Not only is there no capability by the supplier or buyer to change fields they have not been given access to (unlike there was in a big system that shall not be named that, for years, didn’t pull in the contract price data from the database but just assumed whatever was in the XML was correct), but there is a lot of security to prevent cross-site scripting, SQL injection, and other common and uncommon hack attacks.

Another neat feature is credit limits, which can be configured for each supplier per order and on aggregate and allow the buyer to be alerted when an order will surpass a credit limit and possibly be rejected by the supplier until Accounts Payable brings the buyer’s account up to date.

Their B2BConnex Direct platform, which functions as their native data mapping middleware, allows them to not only translate document types from one format and standard to another very easily, but also provides an API that they can use to integrate into just about any ERP, finance, procurement, or back-office system of relevance with respect to one of the many e-Document types that are natively supported which include, but are not limited to, RFQs, purchase orders, sales order acknowledgements, ship notices, delivery schedules, goods receipts, invoices, payment reports, payment receipts, RMAs (return merchandise authorizations), and inventory forecasts.

The B2BConnex platform, like the B2BConnex Customer (Buyer) and Supplier Portals, are very configurable — each document type that is sent from and/or delivered to each location can have its own delivery format. For example, if you have one plant offshore that still isn’t on the enterprise ERP, and can’t accept EDI, you can have EDI documents delivered to all plants except that one, which can be required to use the portal.

In addition, customers can manage their own profiles and user base, deciding who has access to what parts of the system and add and remove accounts as necessary. The last thing you want is to have to wait for a vendor to add or remove an account every time someone joins or leaves your organization. While a number of modern systems have this feature, there are still systems out there that work on named-user licenses (and as a solution buyer, you have to watch out for that).

In a nutshell, even though the B2BConnex solution employs an old-school look, it is actually a very modern SaaS application under the covers and definitely worth looking into if you are a small-or-mid-sized organization that is still in the ERP world and need a better solution.