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Face to Face with Esa Tihilä – CEO Basware

esa tihiliaQ: There seems to be a new focus on SMEs in Basware – what’s the driver behind this?

A: Well, yes – it’s a part of the overall strategy. SMEs form the backbone of most of the world’s workforce and are going to be key in getting the various economies out of recession. A major part of that is enablement – ie enabling them to work faster, with improved processes and access to a more visible, far-reaching network. Historically organisations might have associated Basware with large enterprise ERP implementations, but today, we’re looking at a much more connected workplace and need to offer a totally end-to-end solution – including easy supplier activation.

Q: Yes, and as a large number of suppliers fall into the SME category, I guess that’s where the new focus comes in?

A: Exactly, yes. For example, if I look at just one of our larger clients, they have a supplier network of 50,000 – providing easy reach into that makes perfect business sense for all parties involved. Get it right, and everyone’s happy.

Q: So would you call yourself a global operator in a way that others can’t?

A: Well, there are plenty of solution providers who market themselves as global – but who aren’t really. Not when you look closely. Basware takes the time and trouble to make sure our solutions work within the current legislation of each party involved across the transactions and currently operate in around 75 – 80 countries worldwide, most of which with access to the product in their own language. On top of that, we’ve made a point in forming partnerships with other solution providers who are able to complement the Basware product and enhance our client’s experience.

Q: You were recently invited to participate in the current debate on e-invoicing within the European Commission, what’s your personal opinion on the new legislation coming into play in January 2013? Do you think it will make e-invoicing easier, less complicated – with a corresponding increase in adoption?

A: Well, I certainly hope that will be the case, but it’s more about the Commission really taking e-invoicing seriously and promoting best practice across the entire Purchase to Pay process. I believe the difference now is that e-invoicing is being driven by the economy. It’s no longer a luxury or a “nice to have” – the advantages to be had by e-invoicing are huge, and so it becomes an imperative.

The idea behind the changes to the existing EU legislation is to make it more flexible and accessible, and yet robust enough to be compliant, free from error and fraud. This had led to some organisations complaining that this is just another level of confusion, saying it’s simply not clear. But I think they’re missing the point – they need to flip their thought process. In other words flexibility = inclusion, not confusion.

Q: Bearing in mind that e-invoicing is not exactly a new concept – what’s the hang up with paper? Why the stubborn attachment?

A: I think there are a few different factors at play to be honest. Firstly I think that organisations do not go through their working day concentrating on how much paper comes in or out of their offices – and where an organisation may have several different centres, the margins saved within each may not be large. Of course, the combined savings can become very large indeed – but in a decentralised system those savings can be hard to see.
Secondly, it’s human nature to stick to what we know, and if a system works “well enough” then often that is difficult to overcome. However, things are changing and we’ve seen the growth of e-invoicing and other best practice applications – such as dynamic discounting and an interest in supply chain finance mushroom over the last year – partly driven as I said earlier by current economic circumstances.

Q: Yes, and I suppose that’s where effective change management comes in. I recently overheard someone at a conference whisper to their work colleague; “but we don’t want to pay suppliers early” and I imagine it will take some level of education to get the message across that in fact holding onto the money can actually have a negative impact on the bottom line when compared to a more dynamic approach to managing cash flow.

A: Precisely.

Q So what do you see as the future for Basware and what do you see as the major challenge in the months/years ahead?

As far as the challenges go, I think there’s a lot of transformation going on – which means constant change where we’re asking people to develop and evolve – especially with an increased drive to create new partnerships and acquisitions.

In terms of the future – well what can I say… there’s a great future for Basware! We’ve been in the market since 1997 and know it in detail. More to the point, we know the chaos. There isn’t a situation where we’ll find ourselves surprised – and in terms of implementation and new product creation that’s an incredible advantage to have.

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