IDC MarketScapeIDC MarketScape: Worldwide SaaS and Cloud-Enabled AccountsPayable Applications 2019 Vendor AssessmentKevin PermenterFrank Della RosaMark ThomasonTHIS IDC MARKETSCAPE EXCERPT FEATURES BASWAREIDC MARKETSCAPE FIGUREFIGURE 1IDC MarketScape Worldwide SaaS and Cloud-Enabled Accounts Payable ApplicationsVendor AssessmentSource: IDC, 2019January 2019, IDC #US44753119ee

Please see the Appendix for detailed methodology, market definition, and scoring criteria.IN THIS EXCERPTThe content for this excerpt was taken directly IDC MarketScape: Worldwide SaaS and Cloud-EnabledAccounts Payable Applications 2019 Vendor Assessment (Doc # US44753119). All or parts of thefollowing sections are included in this excerpt: IDC Opinion, IDC MarketScape Vendor InclusionCriteria, Essential Guidance, Vendor Summary Profile, Appendix and Learn More. Also included isFigure 1.IDC OPINIONDigital Transformation Driving ChangeDigital transformation (DX) is fundamentally changing financial applications, thereby allowing businessesto transform their decision making, which is enhancing their business outcomes significantly in the digitaleconomy. Digital transformation is an enterprisewide, board-level, strategic reality for companies wishingto remain relevant or maintain or enhance their leadership position in the digital economy. Digitallytransformed businesses have a repeatable set of practices and disciplines used to leverage newbusiness, 3rd Platform technology, and operating models to disrupt businesses, customers, and marketsin pursuit of business performance and growth. DX is driving businesses to rethink their technologystrategy and that includes moving beyond their legacy finance and back-office systems.SaaS and Cloud-Enabled Software Driving InvestmentInstead of continuing to invest in antiquated on-premises systems, leading DX businesses have turnedtheir focus to software as a service (SaaS) and cloud-enabled software because they need flexible andagile financial applications that are relatively easy to implement, configure, and update. As a result, thedemand for cloud-based accounting applications (accounts receivable [AR] and accounts payable[AP]) continues to grow because of the ability of these applications to access and analyze massiveamounts of data in near real time. With speed and scale as guiding factors to winning businessglobally, businesses want and need more from their accounting applications than ever before, and thatincludes using the most up-to-date and advanced systems found in the market. SaaS and cloudenabled accounting applications enable growing businesses to be more agile and responsive to rapidlychanging business dynamics. SaaS and cloud-enabled systems are adaptive to dynamic regulatoryand reporting environments, which is why this IDC MarketScape for accounts payable applications isextremely important as a technology vendor guide for today's CFO, the financial team, and IT buyers.Accounts PayableEvery business has to manage two essential money functions: money coming in (salesrevenue/accounts receivable) and money going out (accounts payable). In today's fast-paced globalbusiness environment, successfully managing the accounts payable process is essential. Moreover,as the digital economy continues to develop, the AP function will play a larger forward-facing role:interacting with clients and customers as part of the digital value chain. As such, the AP functionimpacts your customer's experience with your brand. The accounts payable function can be complexand fraught with inefficiencies for companies of all sizes. During our interactions with AP professionals,the following issues were top of mind: 2019 IDC#US44753119e2

Manual processes: Today, there are still thousands of companies of all sizes with overlymanual and complex AP workflows. As a result, these processes become exceedinglyinefficient (consuming precious resources and returning delayed approvals), with a multitudeof errors and limited fraud detection capabilities. Moreover, manually driven processes withinAP can lead to inflexibility and a lack of agility, which can be extremely harmful to a company'sability to maneuver in the increasingly dynamic digital economy. Visibility issues: AP managers are constantly being forced to retrace their steps in effort to findlost invoices, digitize paper invoices, and/or verify previous AP transactions. This leads to APresources looking backward at past transactions instead of looking forward, which negativelyimpacts the company's efficiency and effectiveness. Resource restraints: In many growing companies, AP professionals are being asked toprocess greater transaction volumes with the same resources. This, especially in the case offast-growing companies, puts an unbelievable strain on the bandwidth of AP professionals.This can often lead to heightened chances for errors, missed invoices, miscommunication, andsupplier issues. Lost discounts: Companies with inefficient AP processes often lose opportunities to takeadvantage of early payment discounts. These discounts can positively impact theorganization's cash flow and represent an opportunity for the AP function to contribute directlyto the company's bottom line.The Role of Technology in APThe AP process is also critically important within the organization. Accounts payable is also changingrapidly with the introduction of new AP technologies. The AP process touches upon: Purchase orders (POs; standard PO, contract PO, blanket PO, and planned PO) Suppliers and vendors invoices (invoice creation and customization) Contracts and statement of work (contract life-cycle management) Agreements with vendors and independent contractors (vendor relations and compliance) Discounts (2% in 10 days, Net 30, etc.)AP workflows are quickly changing as part of digital transformation initiatives. This shift will also bringforth a new chapter in the evolving story of AP software applications. This is a new chapter within APsoftware applications, which will be characterized by the following: AP robots: Robotic process automation (RPA) is a technology tool that is driving digitaltransformation for AP workflows. With RPA, AP managers are better able to cope with thedemands of forecasting, error reconciliation, approval/exception resolution, and data reporting. Machine learning. Recently, companies have turned to structured machine learning to speedup/streamline key financial processes, including AP automation, invoice reconciliation, and taxcompliance. In addition, early adopters of machine learning have been able to eliminate alarge amount of time spent on manual tasking while decreasing the error rates. Embedded intelligence: Roughly 80% of today's AP professionals' time is spent on lower-leveltasks such as manually process enterprise invoices and invoice matching. Artificial intelligenceis being used to automate many of these lower-level tasks — freeing up valuable organizationalresources to focus on higher-level strategic tasks. Optical character recognition (OCR): One of the major pain points for AP managers is dealingwith the mountain of paper invoices. It can be tedious and time consuming to enter thoseinvoices manually. Also, the information on those invoices can be used (if efficiently 2019 IDC#US44753119e3

processed) to drive real cash flow and forecasting insights. OCR is being used by businessesto capture the value information left on invoices and streamline the process. Blockchain: It is still early days for blockchain within AP applications; there is a lot of resourceand energy being put into the exploration of blockchain. Cryptocurrency: Currently, there is a rapidly growing number of vendors acceptingcryptocurrency payments, which carries the potential to profoundly impact the AP process.The goal of this document is to provide potential software customers with a list of AP softwarecompanies that have taken great strides to address the previously listed challenges. We have profiledand assessed their capabilities to support the complicated area of accounts payable.IDC MARKETSCAPE VENDOR INCLUSION CRITERIAThe vendor inclusion list for this document was selected to accurately depict the vendors that are mostrepresentative of any given AP functional buyer's selection list. Vendors were further investigated toensure that their offerings qualified as "SaaS or cloud enabled," and the vendor had won recent deals.Also, the companies included must be standalone software vendors. Specifically, AP software must beable to be purchased and implemented separate from other financial software. The software packageshad to possess core AP functionality including invoice entry, payment capabilities, vendormanagement capabilities, and reporting capabilities. Preference was given to companies with revenueof more than 50 million and/or that were on our watch list of companies within this market.ADVICE FOR TECHNOLOGY BUYERSAccounting applications are evolving rapidly as vendors are investing research and developmentdollars into bolstering, augmenting and, in some cases, redesigning their AR and AP applications. As aresult, it is extremely important for end users to understand how vendors and their solutions arepositioned currently as well as how those vendors and their solutions may be positioned in the nextthree to five years.Innovation is an essential part of the "buy" decision, and, in turn, a guiding factor in our vendorresearch was the current capabilities of the 3rd Platform and innovation accelerators in addition to thestrategic and investment direction. It is the critical buyers that are looking for a technology partner thatcan take them well into the future and meet the speed key according to business needs.Several vendors outlined in this research study have a broader focus for their AP software packages.Other vendors are focused on serving organizations in vertical industries such as manufacturing, retail,healthcare, wholesale/distribution, public sector, or professional services. The vendors vary widely insize, experience, levels of support, sales model, and focus on the market.Before making purchasing decisions on SaaS and cloud-enabled accounts payable software,businesses should consider the following questions: Levels of experience successfully implementing financial solutions: Does the vendor haveexperience with my type of product, service, and company size? Is the vendor knowledgeable about financial regulations and guidelines both locally andglobally as they affect my company? 2019 IDC#US44753119e4

Does the vendor understand the regulations that will impact my business? How are theseregulations reflected in my current product, and how will it change in the future? What levels of support are available, and are they geographically available for my business? What are my internal support resources and capabilities? Should I hire a third party to plan and assist with the implementation of the solution? Is the vendor financially able to provide needed support? Can the vendor support neededinvestment in the development of future financial software requirements? Is the vendor committed to this market in the long term? Is the ROI achievable? Does the vendor have a track record of meeting the ROI requirements? Can the vendor or partners support my foreign operations? Can the vendor integrate with my company's other IT systems and those of my partners? Is the product available anywhere and anytime? Is the product updated frequently enough for my business needs? What new innovations is the vendor considering? How and when will innovation impact mybusiness? When will the financial DX use cases be built out in the product? How will it impact mybusiness processes and outcomes? What is the vendor's strategic investment outlook for the next three to five years? Why? Howwill that change and enhance my business? Will the vendor be a partner, helping my business grow now and in the long term?This IDC MarketScape vendor assessment assists in answering these questions and others. Therehave been a few high-profile acquisitions that have dramatically reshaped the market landscape for APsolutions. IDC expects that continued consolidation and specialization by niche may occur as themarket matures.VENDOR SUMMARY PROFILESThis section briefly explains IDC's key observations resulting in a vendor's position in the IDCMarketScape. While every vendor is evaluated against each of the criteria outlined in the Appendix,the description here provides a summary of each vendor's strengths and challenges.BaswareAfter a thorough evaluation of Basware's offerings and strategy, IDC has positioned the company inthe Leader category of this IDC MarketScape for SaaS and cloud-enabled accounts payableapplications.Basware offers the largest open business network in the world and is the global leader in providingnetworked purchase-to-pay solutions, e-invoicing and innovative financing services. Basware'stechnology empowers organizations with 100% spend visibility by enabling the capture of all financialdata across the procurement, finance, accounts payable, and accounts receivable functions. Baswareis a global company doing business in more than 100 countries. Quick facts about Basware: 2019 IDC#US44753119e5

Employees: 1,500 Total number of clients: 2,700 customersGlobalization: Supports sales in over 100 countries and 25 languagesIndustry focus: All verticalsIdeal customer size: Midmarket (firms with 500 employees) to enterprise (firms with 1,000 employees)SaaS: A multitenant deployment at the application, database, and cloud infrastructure layersPricing model: License fees charged as annual subscription fees based on application typeand number of transactionsLargest customer: Multiple customers with over 10,000 usersPartner ecosystem: 100 organizations in its partner networks with integrations to 250 ERPsystemsInteresting stat/fact: Traded on the Helsinki Stock Exchange (BAS1V: HE)Strengths Technology platform: Basware has invested a tremendous amount of resources towardinnovation. Basware is leveraging machine learning to automate non-PO invoices. Baswareoffers an intelligent algorithm to identify invoices that are at risk of late payment. Basware isleveraging user data to create specific benchmarks e-invoice rate, spend under control,percentage automatically matched, percentage paid on time, and percentage touchlessprocessing so that companies can see how they compare against top performers. Integration: Basware's strengths of integration to 250 different ERP systems and financialdriven focus have enabled organizations to improve working capital while aiding accountspayable and procurement professionals.Challenges Customer support: Basware references wanted faster response times for help tickets and aquicker resolution to those tickets. Basware, during discussions with their executives, isdevoting additional resources to its customer support operation. Global market presence: Basware has a significant presence across Europe and is working toexpand its global market presence within the rapidly growing regional markets of LatinAmerica and Asia/Pacific. In addition, Basware has had some success in the U.S. market as itrepresents the company's fastest-growing market outside of Europe.Consider Basware WhenConsider Basware when you are looking for an AP automation platform that is capable of handlingcomplex, global organizations with multiple ERP systems and a variety of invoice types (not justindirect but direct, services invoices, logistics invoices, etc.). You may want to consider Basware if youare looking for a company with expertise in the complex European payables market.APPENDIXReading an IDC MarketScape GraphFor the purposes of this analysis, IDC divided potential key measures for success into two primarycategories: capabilities and strategies. 2019 IDC#US44753119e6

Positioning on the y-axis reflects the vendor's current capabilities and menu of services and how wellaligned the vendor is to customer needs. The capabilities category focuses on the capabilities of thecompany and product today, here and now. Under this category, IDC analysts will look at how well avendor is building/delivering capabilities that enable the vendor to execute its chosen strategy in themarket.Positioning on the x-axis, or strategies axis, indicates how well the vendor's future strategy aligns withwhat customers will require in three to five years. The strategies category focuses on high-leveldecisions and underlying assumptions about offerings, customer segments, and business and go-tomarket plans for the next three to five years.The size of the individual vendor markers in the IDC MarketScape represents the market share of eachindividual vendor within the specific market segment being assessed.IDC MarketScape MethodologyIDC MarketScape criteria selection, weightings, and vendor scores represent well-researched IDCjudgment about the market and specific vendors. IDC analysts tailor the range of standard characteristicsby which vendors are measured through structured discussions, surveys, and interviews with marketleaders, participants, and end users. Market weightings are based on user interviews, buyer surveys, andthe input of IDC experts in each market. IDC analysts base individual vendor scores, and ultimatelyvendor positions on the IDC MarketScape, on detailed surveys and interviews with the vendors, publiclyavailable information, and end-user experiences in an effort to provide an accurate and consistentassessment of each vendor's characteristics, behavior, and capability.Market DefinitionFinancial applications are designed to support accounting, financial, and treasury and riskmanagement functions. The financial and accounting submarket is discussed in the section thatfollows.Financial and AccountingAccounting software supports general financial management business processes such as accountspayable, accounts receivable, general ledger, and fixed asset accounting, as well as more specializedfunctions such as credit and collections management and automation, dispute resolution, expensemanagement, lease management, project accounting and costing, tax and revenue management andreporting, nonprofit fund accounting, point of sale, and transactional financial reporting and businessintelligence embedded into accounting applications. Financial and accounting solutions are used byindividuals to manage personal finances and small businesses, as well as by organizations of all sizesto manage organizational finances. 2019 IDC#US44753119e7

LEARN MORERelated Research Finance: Real-Time Insights and Guidance in the Digital Economy (IDC #US44414218,November 2018) IDC's Worldwide Digital Transformation Use Case Taxonomy, 2018: Finance (IDC#US44247318, September 2018) IDC's Forecast Scenario Assumptions for the ICT Markets and Historical Market Values andExchange Rates, Version 2, 2018 (IDC #US44304718, September 2018) CFO Digital Transformation Is a Mandate for Overall Business Success (IDC #US43991418,June 2018) Financial Applications and Artificial Intelligence: Impact and Challenges (IDC #US43590916,March 2018) New Revenue Recognition Rules: ASC 606 — Beauty or Beast? (IDC #US43590416, March2018) IDC Market Glance: Financial Applications, 1Q18 (IDC #US43573416, February 2018) IDC MarketScape: Worldwide SaaS and Cloud-Enabled Finance and Accounting Applications2017 Vendor Assessment (IDC #US42218017, September 2017) Market Analysis Perspective: Worldwide Financial Applications, 2017 (IDC #US43031316,September 2017) IDC's Worldwide IoT Software Platform Taxonomy, 2017 (IDC #US42811316, August 2017) Worldwide Financial Applications Forecast, 2017–2021: The Shift to Intelligent Applications(IDC #US42830016, July 2017) Worldwide Financial Applications Market Shares, 2016: Innovative Vendors Driving Demand(IDC #US42830216, July 2017)SynopsisThis IDC study provides an assessment of the most prominent SaaS and cloud-enabled accountspayable application software solutions and discusses what criteria are most important for companies toconsider when selecting a system."AP workflows are quickly changing as part of digital transformation initiatives. AP are rapidly adoptingnew technologies to cope with the new market dynamics. As digital transformation continues to evolvewithin AP functions, the importance of machine learning, big data and analytics, and even blockchainwill increase rapidly," said Kevin M. Permenter, senior research analyst, Enterprise Applications. 2019 IDC#US44753119e8

About IDCInternational Data Corporation (IDC) is the premier global provider of market intelligence, advisoryservices, and events for the information technology, telecommunications and consumer technologymarkets. IDC helps IT professionals, business executives, and the investment community make factbased decisions on technology purchases and business strategy. More than 1,100 IDC analystsprovide global, regional, and local expertise on technology and industry opportunities and trends inover 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clientsachieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technologymedia, research, and events company.Global Headquarters5 Speen StreetFramingham, MA 01701USA508.872.8200Twitter: @IDCidc-community.comwww.idc.comCopyright and Trademark NoticeThis IDC research document was published as part of an IDC continuous intelligence service, providing writtenresearch, analyst interactions, telebriefings, and conferences. Visit to learn more about IDCsubscription and consulting services. To view a list of IDC offices worldwide, visit Pleasecontact the IDC Hotline at 800.343.4952, ext. 7988 (or 1.508.988.7988) or [email protected] for information onapplying the price of this document toward the purchase of an IDC service or for information on additional copiesor web rights. IDC and IDC MarketScape are trademarks of International Data Group, Inc.Copyright 2019 IDC. Reproduction is forbidden unless authorized. All rights reserved.

January 2019, IDC #US44753119ee IDC MarketScape IDC MarketScape: Worldwide SaaS and Cloud-Enabled Accounts . to drive real cash flow and forecasting insights. OCR is being used by businesses . retail, healthcare, wholesale/distribution, public sector, or professional services. The vendors vary widely in