E-Invoicing Market in Europe 2012-2016

2012-2016 E-Invoicing Market in Europe

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01. Executive Summary.................................................1

02. Scope of the Report.................................................3

02.1 Market Overview ........................................................................ 3

02.2 Product Offerings ........................................................................ 3

03. Market Research Methodology ............................4

03.1 Market Research Process ........................................................ 4

03.2 Research Design ......................................................................... 4

03.3 Research Methodology ............................................................ 5

04. List of Abbreviations ................................................6

05. Introduction ..............................................................7

06. Market Landscape ..................................................9

06.1 E-invoicing Market in Europe as a Segment of

the Global E-invoicing Market ............................................... 9

06.2 Market Size and Forecast....................................................... 11

06.3 Five Forces Analysis ................................................................. 13

07. End-user Segmentation by Company Size ...... 14

08. Key Leading Countries......................................... 15

08.1 UK .................................................................................................. 15

08.2 Germany ..................................................................................... 15

08.3 Denmark ..................................................................................... 16

09. Buying Criteria ....................................................... 17

CONTENTS

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10. Market Growth Drivers ......................................... 18

11. Drivers and their Impact ...................................... 20

12. Market Challenges ............................................... 21

13. Impact of Drivers and Challenges ..................... 23

14. Market Trends ........................................................ 24

15. Trends and their Impact....................................... 26

16. Vendor Landscape............................................... 27

16.1 Competitive Scenario ............................................................. 27

16.2 Market Share Analysis 2012 .................................................. 27

16.3 Other Prominent Vendors....................................................... 29

17. Key Vendor Analysis ............................................ 31

17.1 Ariba Inc. .................................................................................... 31

17.1.1 Business Overview.......................................................................... 31

17.1.2 Business Segmentation .................................................................. 32

17.1.3 Product Portfolio ............................................................................ 33

17.1.4 Key Information ............................................................................. 33

17.1.5 SWOT Analysis ................................................................................ 34

17.2 Basware Corp. ........................................................................... 35



17.2.3 Key Information ............................................................................. 37

17.2.4 SWOT Analysis ................................................................................ 38

17.3 Esker SA ....................................................................................... 39







17.3.3 Key Information ............................................................................. 42

17.3.4 SWOT Analysis ................................................................................ 43

17.4 Tieto Oyj ...................................................................................... 44



17.4.3 Key Information ............................................................................. 46

17.4.4 Sales by Industry Segment ............................................................. 46

17.4.5 Sales by Service Segment.............................................................. 47

17.4.6 SWOT Analysis ................................................................................ 48

18. Other Reports in this Series .................................. 49





Exhibit 1: Market Research Methodology..........................................4

Exhibit 2: E-invoicing Market in Europe as a Segment of

the Global E-invoicing Market 2012 ..................................9

Exhibit 3: E-invoicing Market in Europe 2012-2016 (US$

billion)...................................................................................11

Exhibit 4: E-invoicing Market in Europe by End-user

Segmentation Based on Company Size 2012 ................14

Exhibit 5: E-invoicing Market in Europe by Vendor

Segmentation 2012.............................................................28

Exhibit 6: Business Segmentation of Ariba Inc.................................32

Exhibit 7: Product Portfolio of Ariba Inc. ...........................................33

Exhibit 8: Business Segmentation of Basware Corp. .......................36

Exhibit 9: Product Portfolio of Esker SA..............................................40

Exhibit 10: Business Segmentation of Esker SA ..................................41

Exhibit 12: Business Segmentation of Tieto Oyj .................................45

Exhibit 13: Sales of Tieto by Industry Segment...................................46

Exhibit 14: Sales of Tieto by Service Segment ...................................47

EXHIBITS




E-Invoicing Market in Europe 1

01. Executive Summary

Market Revenue

(US$ billion)

Market Growth Rate (%) CAGR (%)

2012 2016 2012 2016 2012-2016

1.56 2.82 15.00 16.53 15.95

Key Leading Countries 2012 (%)

UK 12-14

Germany 9-11

Denmark 6-8

Key Customer Segments 2012 Key Buying Criteria

Large Enterprises 76.58 Affordability

SMEs 23.42 Usability

Reliability

Security





Key Market Drivers Key Market Challenges Key Market Trends

Need to Automate Invoicing

Process and Reduce

Operational Costs

Complexity Involved in

Electronic Purchasing Process

Emergence of Cloud

Computing

Need for Improved Business

Productivity

Lack of Internal Cross-

functional Collaboration

Increasing Demand from

Several Sectors

Increased Adoption of E-

invoicing by SMEs

Lack of Employee Training Need to Converge Vendor

Capabilities

Need to Reduce Overall Time

to Market

Data Security Concerns Stringent E-invoicing

Regulations

Language Barrier

Competitive Landscape

Key Vendors 2012 Market Share (%)

Basware Corp. 7-9

Ariba Inc. 4-6

Esker SA 3-5

Tieto Oyj 2-3





02. Scope of the Report

02.1 Market Overview

This report covers the present scenario and the growth prospects of the E-invoicing market in

Europe for the period 2012-2016. To calculate the market size, the report considers revenue

generated by e-invoicing service providers in Europe. The report also presents the vendor

landscape and a corresponding detailed analysis of the top four vendors in the market. In

addition, it discusses the major drivers that influence the growth of the E-invoicing market in

Europe. It also outlines the challenges faced by the vendors and the market at large, as well as

the key trends that are emerging in the market.

02.2 Product Offerings

Some of the products offered by the major vendors in the E-invoicing market in Europe are listed

below:

Company Products Offered

Ariba Inc. Ariba Invoice Presentment and Payment

Basware Corp. Basware E-invoicing

Basware Invoice Automation

Esker SA Esker DeliveryWare

Tieto Oyj Tieto E-invoicing





03. Market Research Methodology

03.1 Market Research Process

TechNavio identifies the key opportunities in leading markets and develops various

methodologies for data collection and analysis. The micro, meso, and macroeconomic

indicators of the market are studied to ascertain the dynamics of the market.

03.2 Research Design

TechNavios reports are based on in-depth qualitative and quantitative analyses of several

markets. The qualitative analysis involves the application of a variety of projection and sampling

techniques, whereas the quantitative analysis involves primary interviews, surveys, and vendor

briefings. The data thus gathered is validated through experts' opinions. Based on research

results and technical insights, TechNavio analysts refine the existing methodologies to analyze

the individual aspects of the market.

Exhibit 1: Market Research Methodology

Source: TechNavio Analysis

E-inv oicing Market in

Europe 2012-2016





TechNavio analysts gather inputs from vendors and industry experts and verify the information

collected with databases, financial reports, industry papers, and other secondary sources. The

impact of global economic conditions and other macroeconomic indicators are also

considered while assessing the market.

03.3 Research Methodology

TechNavio analysts have adopted primary as well as secondary research techniques to

ascertain the size and vendor landscape of the E-invoicing market in Europe. The information

has been obtained using a combination of the bottom-up and top-down approaches and in-

house market modeling tools. The data has then been corroborated with data obtained from

market participants and stakeholders across the value chain, including vendors, service

providers, distributors, re-sellers, and end-users.





04. List of Abbreviations

APAC - Asia Pacific

EMEA - Europe, Middle East, and Africa

MEA - Middle East and Africa

PDA - Personal Digital Assistant

SaaS - Software as a Service

SMEs - Small and Medium-sized Enterprises





05. Introduction

E-invoicing is the exchange of bills and related invoice documents between enterprises and

their clients in an integrated electronic format, usually using the internet. Also known as e-billing,

e-invoicing is a part of electronic data interchange transactions that include data from the

enterprise in a format that can be integrated into the client's financial system without the

interference of a financial administrator. Enterprises are increasingly using e-invoicing solutions to

simplify and automate the process of creating, sending, and receiving invoices. E -invoicing

offers a cost-effective solution that eliminates paper-based manual invoicing and replaces it

with a more reliable and faster invoicing system.

The E-invoicing market in Europe was the largest market in the Global E-invoicing market in 2012.

The key leading countries in the market are the UK, Germany, and Denmark. The market is highly

fragmented with just a few dominant players. Some of the leading players in this market are

Ariba Inc., Basware Corp., Esker SA, and Tieto Oyj. The E-invoicing market in Europe is expected

to grow at a CAGR of 15.95 percent during the period 2012-2016.

The growth of the E-invoicing market in Europe is driven by many factors. One of the major

drivers in the market is the need to automate the invoicing process and reduce operational

costs. E-invoicing enables companies to automate invoice generation and enhance the overall

business process. It also reduces the total operational cost s and the time spent on the

purchasing process. Another key driver in the market is the need for improved business

productivity.

Despite the presence of strong drivers, the growth of the E-invoicing market in Europe is curtailed

by some serious growth inhibitors. The complexity involved in an electronic purchasing process is

one of the major challenges confronting the market. The integration of e-invoicing solutions with

existing business systems such as accounting and human resources systems can be more

complex than anticipated. Another major challenge in the market is the lack of interna l cross-

functional collaboration.

Despite the presence of serious challenges, the E-invoicing market in Europe is expected to grow

moderately due to the presence of certain emerging trends that could negate the effect of the

challenges to some extent. One such trend is the emergence of cloud computing. Enterprises

across the globe are increasingly adopting cloud computing for their requirements. Enterprises

have discovered the cost benefits associated with adopting cloud-based services, as they offer

various advantages such as rapid scalability, easy access, uninterrupted service, and flexibility.

These factors are responsible for the higher adoption of cloud services, and organizations are





slowly moving their products and services into cloud storage systems. Another major trend in the

market is the increasing demand from several sectors. Thus, the combined effect of various

emerging trends is expected to have a positive impact on the E-invoicing market in Europe

during the forecast period.





06. Market Landscape

06.1 E-invoicing Market in Europe as a Segment of the Global E-invoicing Market

The Global E-invoicing market was valued at US$3.4 billion in 2012. Europe dominated the Global

E-invoicing market with a share of 45.88 percent. The main reason for the increased adoption of

e-invoicing solutions in Europe is the need for improved business productivity. Enterprises in

Europe are not only archiving their traditional accounting, human resources, sales, and

production records, but they are also storing web pages, e-mails, interactive and collaboration

records, images, presentations, documents, and spreadsheets. Content that was previously

recorded in hard copies is increasingly being scanned, digitized, and stored in digital content

storage and archival systems to reduce paperwork and improve workflow. E-invoicing has

gained importance because organizations can organize and reuse customer-related

information across their business to increase productivity and efficiency and ensure secure

record retention.

Exhibit 2: E-invoicing Market in Europe as a Segment of the Global E-invoicing

Market 2012


The E-invoicing market in the Americas accounted for 37.00 percent of the global market in

2012. The Americas contributed US$1.26 billion to the market in 2012. The Americas was followed





by the APAC region with a market share of 9.00 percent. Although the E-invoicing market in the

APAC region is still in its nascent stage, it is growing at a rapid pace and is expected to

dominate the Global E-invoicing market in the next few years. In 2012, the APAC region

accounted for a 9.00 percent share of the market and generated US$0.31 billion from sales of e-

invoicing solutions. Some of the factors that are propelling the growth of the E-invoicing market

in the APAC region are the need for organizations to reduce the cost of invoicing, the increasing

number of acquisitions by existing e-invoicing vendors, the increased awareness about e-

invoicing, and the increasing demand for these solutions in emerging markets such as China and

India. The MEA region accounted for an 8.12 percent share of the global market in 2012.





06.2 Market Size and Forecast

The E-invoicing market in Europe was valued at US$1.56 billion in 2012 and is expected to reach

US$2.82 billion by 2016, growing at a CAGR of 15.95 percent during the period 2012-2016. In 2012,

the market grew at an annual rate of 15.00 percent. The increased focus on reducing carbon

footprints and increased use of green technologies are the drivers in the current business

environment. E-invoicing caters to these factors by significantly reducing the usage of natural

resources such as paper and increasing the efficiency of business processes. However, the

market is expected to witness an increase in its grow th rate. The market will grow at a rate of

15.38 percent in 2013 and 15.56 percent in 2014, and it is expected to witness an improvement in

its growth rate and grow at a rate of 16.35 percent in 2015 and 16.53 percent in 2016.

Exhibit 3: E-invoicing Market in Europe 2012-2016 (US$ billion)


Many enterprises are realizing the importance of using e-invoicing in their business operations.

Enterprises are discovering that they need e-invoicing to enhance the overall purchasing and

payment processes. SMEs, large enterprises, and government organizations are the major end-

users in the market. E-invoicing helps enterprises reduce the costs associated with, and improve

the efficiency of, the invoicing process. While some of the vendors in the market are offering

standalone software products, others are offering embedded solutions as part of their business

suites.





In addition, there has been an increase in awareness among consumers about the various

products and services available in the market, and consumers are becoming more

sophisticated than ever. Customers are also increasingly using the internet not only for

entertainment and information, but also to make purchases online. Hence, to meet the

requirements of these customers, companies are shifting their marketing focus from a product-

centric approach to a consumer-centric approach. This encourages companies to adopt e-

invoicing solutions to provide their target audience with a more sophisticated purchasing

experience in real time.





06.3 Five Forces Analysis

Threat of Rivalry

(High)

There is intense competition among the existing players to

provide better services based on the needs of end-

users.

Bargaining Power of Suppliers

(Low)

The consolidation trend among e-invoicing vendors has reduced the bargaining

power of suppliers.

Bargaining Power of Buyers

(High)

As the market is fragmented, buyers have a number of options to choose from.

Threat of New Entrants

(Medium)

New vendors offering innovative additional features within the e-invoicing platform

represent a threat to the existing vendors in the market.

Threat of Substitutes

(Medium)

There is no direct substitute for e-invoicing serv ices.

However, companies can opt for traditional paper-based invoicing serv ices.





07. End-user Segmentation by Company Size

Large enterprises are the major end-users of e-invoicing solutions in Europe. The Large Enterprises

segment accounts for the majority of the revenue in the E-invoicing market in Europe. In 2012,

this segment accounted for 76.58 percent of the market.

The need to reduce carbon footprints has increased the usage of e-invoicing among large

enterprises. Further, e-invoicing enhances the collaboration among the different business

processes and helps in compiling data to obtain the desired outcome. As a result, the carbon

footprint of enterprises is reduced. A slight increase in the adoption of e-invoicing reduces the

usage of approximately 700,000 trees, which in turn reduces carbon dioxide emissions. Such

environmental benefits boost the corporate social responsibility programs of user organizations.

Exhibit 4: E-invoicing Market in Europe by End-user Segmentation Based on

Company Size 2012


The SMEs segment held a significant share in this market in 2012 and is growing at a high rate. In

2012, this segment accounted for 23.42 percent of the E-invoicing market in Europe. With the

advent of cloud computing technology that offers huge storage space for structured invoice

data, cloud-based e-invoicing solutions are increasingly being deployed by SMEs.





08. Key Leading Countries

The leading countries in the E-invoicing market in Europe 2012 are shown below:

08.1 UK

The stringent e-invoicing regulations of the government are the major factors that drive the E-

invoicing market in the UK. However, the complexity involved in the e-invoicing process is a

major hindrance to the growth of this market.

08.2 Germany

The need to enhance the invoicing process drives the E-invoicing market in the Germany.

However, the increased competition among the vendors in this market poses a significant

challenge to its growth.

Major Driver

Stringent E-invoicing Regulations of the Government

Major Challenge

Complexity Involved in E-invoicing Process

Major Trend

Increased Adoption by SMEs

UK

12-14 percent

Germany

9-11 percent

Denmark

6-8 percent





08.3 Denmark

The fact that e-invoicing has been made mandatory by the government drives the E-invoicing

market in Denmark. However, difficulty in selecting the right solution from a wide variety of

options hampers the growth of this market considerably.

Major Driver

Need to Enhance Invoicing Process

Major Challenge

Intense Competition among Vendors

Major Trend

Increase in Mergers and Acquisitions

Major Driver

E-invoicing Made Mandatory by the Government

Major Challenge

Difficulty in Selecting the Right Solution from a Wide Variety of Options

Major Trend

Entry of New Vendors





09. Buying Criteria

Parameter Details End-user Segments Significance Attached

Affordability

The price of the solutions

and their associated

services should be

affordable

SMEs

Large Enterprises

Government

Organizations

Usability

The solutions should be

easy to use and have self-

explanatory applications

and interfaces

SMEs

Large Enterprises

Government

Organizations

Reliability

The integrity and the

consistency of the

solutions and all their

transactions

SMEs

Large Enterprises

Government

Organizations

Security

The ability of the solutions

to provide a secure and

safe infrastructure

environment

SMEs

Large Enterprises

Government

Organizations

Key

The impact of the buying criteria is graded on the basis of the intensity and the duration of their

impact on the current market landscape. The magnitude of the impact has been categorized

as described below:

Low - Negligible or no impact on the market landscape

Medium - Medium-level impact on the market

High - Very high impact with radical influence on the growth of the market

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5





10. Market Growth Drivers

The growth of the E-invoicing market in Europe is driven by many factors. One of the major

drivers in the market is the need to automate the invoicing process and reduce operational

costs. E-invoicing enables companies within or across organizations to automate invoice

generation and enhance the overall business process. It also reduces the total operational cost s

and the time spent on the purchasing process. Another key driver in the market is the need for

improved business productivity.

Some of the major drivers in the E-invoicing market in Europe are discussed below:

Need to Automate Invoicing Process and Reduce Operational Cost s

Need for Improved Business Productivity

Increased Adoption of E-invoicing by SMEs

Need to Reduce Overall Time to Market

Need to Automate Invoicing Process and Reduce Operational Costs

One of the main drivers of the E-invoicing market in Europe is the need to automate the

invoicing process. E-invoicing enables companies within or across organizations to automate

invoice generation and enhance the overall business process. It eliminates paper processing,

reduces failed payments and processing errors, accelerates the purchasing process, and

improves customer relations. Hence, e-invoicing reduces the total operational costs and the

time spent on the purchasing process. This indirectly helps in increasing the production rate.

Need for Improved Business Productivity

The increased need to improve business productivity and gain competitive advantages such as

optimization of capacity, reduction of lead time and cost, and increased profit through

developing IT infrastructure are the major factors propelling the market forward. E-invoicing

solutions improve an organizations processes by improving quality control and inventory control;

this in turn improves the productivity and efficiency of the firm. As a result of the increased

importance of scalable IT systems, enterprises are looking for business solutions that can

accelerate the growth of an organization. In the last few years, some companies have

deployed e-invoicing solutions that integrate with the organization's enterprise resource planning

systems and help them improve efficiency and productivity, which in turn helps them meet their

business demands very quickly and remain competitive.





Increased Adoption of E-invoicing by SMEs

Earlier, SMEs had limited options when seeking to adopt a system that would ensure optimal

business performance. This was because they did not require or could not afford all the features

of enterprise-class systems. Their options were limited to freeware, low -end or open-source

solutions that mainly focused on server or network monitoring. In the last few years, many SMEs

have become increasingly aware of the significance of having a solution that preserves their

brand reputation and enhances the business process. Some new vendors in the e-invoicing

space are aware of this opportunity, and they have recently entered t he market with offerings

that are positioned to capitalize on this trend. The combination of these new vendors' pricing

models and the capabilities and ease of management that their solutions offer makes these

products appealing, especially to SMEs.

Need to Reduce Overall Time to Market

In the modern business environment, the delivery of a product or a service by an organization

involves the interaction of several internal departments, which consumes a lot of time. An

effective e-invoicing solution can help organizations reduce the time required for service

delivery. Moreover, improving the time to market necessitates the streamlining of critical business

processes which involve communication and collaboration among employees, customers,

suppliers, and partners. An e-invoicing solution enables companies to get a comprehensive view

of documents in real time, thereby helping them share information, discuss issues, and provide

solutions in much less time.





11. Drivers and their Impact

Driver

Impact on End-user Category

SMEs Large Enterprises Government

Organizations

Need to Automate

Invoicing Process and

Reduce Operational Costs

Need for Improved

Business Productivity


invoicing by SMEs

Need to Reduce Overall

Time to Market

Drivers

Impact on Geography

UK Germany Denmark

Need to Automate

Invoicing Process and

Reduce Operational Costs

Need for Improved

Business Productivity


invoicing by SMEs

Need to Reduce Overall

Time to Market

Key

The impact of the drivers is graded on the basis of the intensity and duration of their impact on

the current market landscape. The magnitude of the impact has been categorized as

described below:




Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5

Low High 1 2 3 4 5





12. Market Challenges

Despite the presence of strong drivers, the growth of the E-invoicing market in Europe is curtailed

by some serious growth inhibitors. The complexity involved in an electronic purchasing process is

one of the major challenges confronting the market. The integration of e-invoicing solutions with

existing business systems such as accounting and human resources systems can be more

complex than anticipated. Another major challenge in the market is the lack of internal cross-

functional collaboration.

Some of the major challenges in the E-invoicing market in Europe are discussed below:

Complexity Involved in Electronic Purchasing Process

Lack of Internal Cross-functional Collaboration

Lack of Employee Training

Data Security Concerns

Language Barrier

Complexity Involved in Electronic Purchasing Process

Creating and maintaining product data electronically and enabling suppliers to support

electronic transactions increase the complexity of the purchasing process. Generally, there is a

limitation in the ability of e-invoicing to address various types and ranges of purchasing activities.

Organizations are facing difficulty in managing electronic catalogs with thousands of products

and providing employees with the right mix of products and sufficient information about them.

The process of providing employees with access to product -related information can be

complicated because it necessitates the use of additional tools. In addition, the integration of e-

invoicing solutions with existing business systems such as accounting and human resources

systems can be more complex than anticipated.

Lack of Internal Cross-functional Collaboration

In order for an e-invoicing solution to be effective, various departments in an organization such

as IT, finance, marketing, and human resources need to work in collaboration with each other

and contribute equally to e-invoicing. The inability of various departments to cooperate with

each other results in decreased visibility of operations. This leads to poor business results. This lack

of internal collaboration is a challenge for organizations when there is increased need to

maintain good collaboration among cross-functional departments for business success.





Lack of Employee Training

Many companies do not opt for e-invoicing because of the constant need to train employees.

Several organizations do not budget for training as a part of their process of adopting e-

invoicing solutions. In some cases, systems have gone unused as employees continue work ing

on their older systems, including paper-based systems. Thus, proper training of employees is

required to ensure the efficient utilization of e-invoicing solutions. In addition, the market vendors

are coming up with value additions; although this may increase the efficiency of the solutions, it

also necessitates additional training of staff. Hence, thorough training requirements sometimes

deter end-users from opting for e-invoicing.

Data Security Concerns

The security of customer data in e-invoicing is a key component. It is necessary to assign access

permission to specific groups so that alteration and modification of access to customers '

documents in the system is restricted. Enterprises are always concerned about their data security

and related issues when using e-invoicing solutions. This concern is greater when the tool is

installed using SaaS-based solutions. During the deployment of SaaS-based e-invoicing solutions,

the customer data resides in the cloud servers of vendors, which increases the security concerns.

In a multi-tenant model, there is always a risk of information leakage, which could result in the

misuse or manipulation of data. For organizations, the security of customer data is a vital aspect

of cloud infrastructure and applications. In addition, many enterprises are concerned about

data loss and misuse by IT professionals who install the tools. Data security and privacy are a big

concern for many organizations. Hence, it is very important for SaaS-based e-invoicing vendors

to provide strong security solutions for storing and managing the confidential data related to

customers.

Language Barrier

Language is the most obvious element of cultural diversity. There are 23 languages in Europe.

Therefore, the business language of organizations in Europe is different. For instance, some

European countries such as Switzerland, France, and Germany find difficulty in using English as a

business language. In Europe, the business language of many large enterprises is English , while

their suppliers find it difficult to embrace English because of the diversity in language used on

invoices. Therefore, this is one of the major challenges confronting the E-invoicing market in

Europe.





13. Impact of Drivers and Challenges

Key

The impact of the drivers and challenges is graded on the basis of the intensity and duration of

their impact on the current market landscape. The magnitude of the impact has been

categorized as described below:



Moderately High - Significant impact on the growth of the market






14. Market Trends

Despite the presence of serious challenges, the E-invoicing market in Europe is expected to grow

moderately due to the presence of certain emerging trends that could negate the effect of the

challenges to some extent. One such trend is the emergence of cloud computing. Enterprises

across the globe are increasingly adopting cloud computing for their requirements. Enterprises

have discovered the cost benefits associated with adopting cloud-based services, as they offer

various advantages such as rapid scalability, easy access, uninterrupted service, and flexibility.

These factors are responsible for the higher adoption of cloud services, and organizations are

slowly moving their products and services into cloud storage systems. Another major trend in the

market is the increasing demand from several sectors.

Some of the major trends emerging in the E-invoicing market in Europe are discussed below:

Emergence of Cloud Computing

Increasing Demand from Several Sectors

Need to Converge Vendor Capabilities

Stringent E-invoicing Regulations

Emergence of Cloud Computing

The emergence of cloud-based solutions has enabled organizations to increase their efficiency

and reduce the cost of setting up valuable IT infrastructure. However, many organizations are still

analyzing the feasibility and relevance of cloud computing solutions in their IT operations. The

cloud-based model for e-invoicing offers a pay-per-use model, which provides cost-effective

access to the e-invoicing solution at any time and from any place by multiple users. Although

many enterprises have increased understanding of the benefits of cloud-based e-invoicing, a

number of concerns and risks, particularly in relation to data sharing and data security, are

affecting the adoption of such solutions. However, the E-invoicing market in Europe is witnessing

a trend where many vendors in the market have begun to offer their solutions through cloud-

based models to expand their services and enter new markets.

Increasing Demand from Several Sectors

Though large sectors such as Retail, Telecom, Government, and Financial Services are the m ajor

end-users of e-invoicing solutions, the E-invoicing market in Europe is witnessing increasing

demand from different sectors such as Healthcare, Logistics, Utilities, and Manufacturing. Many

enterprises in these sectors have realized the importance of e-invoicing and they are

increasingly adopting it. However, the Retail sector is considered as an early adopter of this

technology and is known for investing heavily in IT. Additionally, the Telecom sector follows the





Retail sector very closely in terms of market penetration and technology development. The

Financial Services sector is growing at a higher rate and is expected to increase its market share

in the near future. Moreover, this sector is demanding high-end technology to provide

advanced services to its clients.

Need to Converge Vendor Capabilities

The E-invoicing market in Europe has become very competitive as a result of the evolution of

technological innovations and the varying needs of end-users. This has led to increased

adoption of open-source software by enterprises and the emergence of small vendors, because

of which the market is expected to remain dynamic in the near future. This results in intense

competition among the vendors, thereby forcing them to consolidate their capabilities to

remain competitive and to serve organizations that require comprehensive e-invoicing solutions.

This is acting as a short-term challenge for the E-invoicing market in Europe.

Stringent E-invoicing Regulations

In several European countries, e-invoicing has become mandatory as a measure to reduce the

usage of paper. E-invoicing also helps in cost reduction as it eliminates the cost of buying paper.

Therefore, governments in Europe have made it mandatory to receive invoices electronically.

Several European companies have accepted the mandate of adopting e-invoicing solutions.

For instance, most of the organizations in Finland utilize e-invoicing solutions instead of using

paper invoices. This is one of the major trends which will further increase the adoption of e-

invoicing in Europe.





15. Trends and their Impact

Key

The impact of the trends is graded on the basis of the intensity and duration of their impact on

the current market landscape. The magnitude of the impact has been categorized as

described below:








16. Vendor Landscape

16.1 Competitive Scenario

The E-invoicing market in Europe is highly fragmented, which creates opportunities for mergers

and acquisitions. The vendors in the market provide innovative e-invoicing solutions with a multi-

channel integration capability that connects users through a variety of devices such as laptops,

mobile devices, and PDAs. The market is dominated by four vendors that together accounted

for 19-21 percent of the market in 2012.

In addition, the market is witnessing the entry of many pure-play SaaS-based e-invoicing

solutions providers that are competing with the large open-source solutions providers. As a result,

the market is getting more fragmented, leading to the presence of a large number of vendors.

Moreover, organizations are assessing the vendors based on their technical knowhow about e-

invoicing solutions and the degree of superiority in their product offerings. This enables them to

compete more effectively with the larger vendors, resulting in intense competition in the market.

However, consolidation and attrition are anticipated in the near future, which will increase the

complexity for organizations wishing to select the right e-invoicing solutions to meet their

requirements.

The top four vendors in the E-invoicing market in Europe are described below:

Company Description

Ariba Inc. Global spend management solutions provider

Basware Corp. Global enterprise purchase-to-pay and financial

management solutions provider

Esker SA France-based document process automation software

applications provider

Tieto Oyj Global provider of IT consulting and IT services

16.2 Market Share Analysis 2012

Basware Corp. is also a major vendor in the E-invoicing market in Europe and it had a share of 7-

9 percent in 2012. The company offers SaaS-based e-invoicing and purchase-to-pay solutions. Its

business operations are divided into four major segments: License Sales, Maintenance,

Professional Services, and Automation Services. It has operations in more than 50 countries and





markets its products in a number of countries in Europe, Russia, North America, and the APAC

region. The company has acquired several vendors in the past to establish itself in the E-invoicing

market. Some of the notable mergers and acquisitions are listed below:

Date Company Name Description

January 18, 2012 First

Businesspost

GmbH

Leading provider of e-invoicing in Germany

October 5, 2012 Certipost NV Leading provider of electronic document

exchange solutions in Europe

Ariba Inc. is a major vendor in the E-invoicing market in Europe and it had a share of 4-6 percent

in 2012. The company is a subsidiary of SAP AG. It offers a wide range of solutions such as spend

management solutions, procurement solutions, financial solutions, supplier solutions, and

contract management solutions. It has business operations in more than 20 countries. It employs

more than 2,500 customers in more than 40 offices operating across the globe.

Exhibit 5: E-invoicing Market in Europe by Vendor Segmentation 2012






Esker SA is another major vendor in the E-invoicing market in Europe and it had a share of 3-5

percent in 2012. The company started as a software consulting company that designed

software applications in order to eliminate the usage of paper from business management

processes such as accounts payable, accounts receivable, and sales order processing. The

company serves the Manufacturing, Life Sciences, Financial, Retail, IT, Telecom, Public, Utilities

and Energy, and Travel and Transportation sectors.

Tieto Oyj is another major vendor in the E-invoicing market in Europe and it had a share of 2-3

percent in 2012. The company is a leading provider of IT and product engineering services. It has

operations in more than 20 countries. The company has a strong presence in Europe. Its service

offerings have been developed to meet the requirements of customers across the globe.

16.3 Other Prominent Vendors

Some of the other major vendors in the E-invoicing market in Europe are described below:

Company Description

Fundtech FSC Ltd. Global electronic invoicing and payment

solutions provider

GXS Corp. Global provider of business-to-business cloud

integration services

IBM Corp. Global technology and consulting company

Itella Corp. Global financial administration process and

logistics services provider

Swiss Post Solutions Global information process solutions provider

TradeShift Inc. Global e-invoicing solutions provider

Fundtech FSC Ltd. was another vendor in the E-invoicing market in Europe in 2012. The company

was founded in 1993 and is headquartered in the Bangor, UK. It offers payment solutions and e-

invoicing solutions to the Financial Services sector. The company's product portfolio includes

payments, cash management, financial messaging, and merchant services. It has business

operations in the Americas, the EMEA region, and the APAC region.

IBM Corp. is another vendor in the E-invoicing market in Europe. In 2010, the company acquired

Sterling Commerce from AT&T Corp. for US$1.4 billion and obtained strong business-to-business





integration capabilities as a result of the acquisition. It has the advantages of an ext ensive

geographical spread, partner relationships with re-sellers, and technological partner

relationships with giant players. Being a major enterprise resource planning software provider, its

e-invoicing solution is expected to have the ability to integrate better with the existing systems.

Additionally, its extensive geographical reach, financial strength, and partnership network s have

helped it gain a significant market share and a strong position in the E-invoicing market.

Itella Corp. was another vendor in the E-invoicing market in Europe in 2012. The company was

founded in 1638 and is headquartered in Helsinki, Finland. It offers a wide range of solutions such

as customer relationship marketing, invoice management, logistics, and e-mail communications.

The company's operations are divided into three business divisions:

Itella Mail Communications

Itella Information

Itella Logistics.

GXS Corp. was another vendor in the E-invoicing market in Europe in 2012. The company was

founded in 2002 and is headquartered in Gaithersburg, Maryland, US. It is a global leader in

business-to-business cloud integration services. It has operations worldwide, including the US, the

EMEA region, and the APAC region. The company offers cloud computing platforms for

automating and monitoring business processes. It also provides messaging services for business

documents such as purchase orders, images, invoices, and other files.

Swiss Post Solutions is another vendor in the E-invoicing market in Europe. The company was

founded in 1849 and is headquartered in Bern, Switzerland. It serves the Financial, Media, Travel,

Logistics, Transport and Distribution, and Publishing sectors. It has operations across the US, the

EMEA region, and the APAC region; however, it generates a significant amount of revenue from

the UK, the Netherlands, and Scandinavia.

TradeShift Inc. was another vendor in the E-invoicing market in Europe in 2012. The company was

founded in 2009 and is headquartered in San Francisco, California ,US. It serves small companies

and enterprises. It has additional offices in Copenhagen, Denmark, and London, England, UK. In

March 2012, the company released an invoice processing product called CloudScan.





17. Key Vendor Analysis

17.1 Ariba Inc.

17.1.1 Business Overview

Together with its subsidiaries, Ariba Inc. provides collaborative business commerce solutions that

facilitate the buying and selling of goods and services. The company started its business with the

innovative idea of using the internet to facilitate and im prove the procurement processes of

organizations. It combines various technologies to optimize the commerce lifecycle with web-

based community technology in its solutions. Using these solutions, customers can connect and

collaborate with a global network of trading partners. It also helps organizations enhance their

cash flow and operations in a cloud-based environment. The company was acquired by SAP

AG, a German business software provider, for US$4.3 billion in October 2012.

The company also offers invoice management services, invoice conversion services, payment

management services, and global invoicing and compliance services. It provides its services to

the Financial sector for procurement functions, treasury-related operations, and sales and

marketing operations. It is the only vendor that combines leading spend management and

contract management solutions with global consulting and category expertise. In 2007, it

acquired Procuri Inc., a privately-held provider of SaaS sourcing and contract management

solutions, to broaden its cloud offering. The company serves the Automotive, Banking,

Parameter Description

Type Public

Industry IT Services & Consulting

Founded 1996

Headquarters Sunnyvale ,California, US

Revenue US$517 million (FY2012)

Employees 2,432 (2011)





Construction, Chemicals, Energy, Education, Manufacturing, Healthcare, Media and

Entertainment, Retail, and Telecom sectors.

17.1.2 Business Segmentation

Exhibit 6: Business Segmentation of Ariba Inc.


Ariba Inc.

Discount Management

Payment Management

Invoice Management

Receivables Financing

Supply Chain Finance

Scanning and Workflow Systems





17.1.3 Product Portfolio

Exhibit 7: Product Portfolio of Ariba Inc.


17.1.4 Key Information

Company Details Description

Product Portfolio Ariba Invoice Presentment and Payment

Key Acquisition May 2012: Acquired by SAP AG, the leader in the Global

Enterprise Applications market, for US$4.3 billion

Key Customers Bajaj Auto Ltd.

Dabur India Ltd.

eBay Inc.

Procter & Gamble Co.

Ariba Inc.

Contract Management

Ariba Buyer Application

Ariba Category

Procurement

Ariba Travel and Expense

Ariba Procure-to-

Pay

Procurement and Expense

Ariba Contract

Workbench

Ariba Contract

Compliance

Ariba Contract

Management

Invoice and Payment

Ariba Invoice Presentment

Ariba Payment

Supplier Management

Ariba Supplier Connectiv ity

Ariba Supplier Network

Spend Analysis

Ariba Analysis

Ariba Data Enrichment

Ariba Spend Visibility

Sourcing

Ariba Sourcing

Ariba Supplier Performance Management

Ariba Category

Management

Ariba Sourcing On-

demand





17.1.5 SWOT Analysis

Strengths

Ariba is one of the leading vendors in

the E-invoicing market in Europe.

The company has seven business

segments, with a strong position in each

segment.

It provides a strong goods procurement and supplier network through its cloud

model.

Its products offer the most functional and best user experience.

It has a dedicated R&D div ision of more

than 330 employees.

Weaknesses

The company lacks an in-house

Management Consulting div ision.

It is highly dependent on the market in

North America; it receives more than 50

percent of its revenue from North

American enterprises.

Opportunities

The company can focus on the emerging markets, particularly those in

Brazil, Russia, India, and China, to

enhance its business presence.

The economic slowdown has increased the demand for technology-enabled

efficiency solutions.

Threats

The company faces a threat to its market share because of the intense

competition among the top vendors.





17.2 Basware Corp.


Basware Corp. is a leading provider of enterprise purchase-to-pay and financial management

solutions in Europe. With more than 1,500 clients and 1 million users in more than 60 countries, it is

one of the leading providers of purchase-to-pay solutions. Its enterprise purchase-to-pay solution

automates procurement, accounts payable, and travel and expense management processes.

It also offers a solution for invoice automation, including invoice data capture, invoice

matching, review and approval, and payment transfer and archiving.

The company's procurement solutions include purchase management solutions, sourcing and

procurement solutions, contract lifecycle management solutions, and supplier portals. In

addition, it provides data capture solutions, including enterprise imaging and mailroom

automation solutions. The company also offers consulting services, customer support services,

and training services.


Type Public

Industry Accounting and Finance Software

Founded 1985

Headquarters Espoo, Finland

Revenue US$149.7 million (FY2012)

Employees Approximately 1,423 (2012)






Exhibit 8: Business Segmentation of Basware Corp.


Ba

swa

re C

orp

. Purchase-to-

Pay

Procurement

Invoice Automation

Travel and Expense

E-invoicing

Virtual Printer

E-mail

Invoice Basic

Supplier Portal

Customer Activation

Supplier Activation

CloudScan

Archiving







Product Portfolio Basware E-invoicing

Basware Invoice Automation

Key Acquisition October 5, 2012: Acquired the E-invoicing business and

network of Cetipost N.V., a global electronic document

exchange solutions provider, for US$23.98 million

Key Customers ABB Ltd.

Europcar SA

Metso Oyj

Toshiba Corp.

UniCredit Group






Strengths

Basware is the leader in the E-invoicing

market in Europe.

The company is well known for its

supplier management and its

integration capability with other

applications.

It prov ides invoice automation even for

purchases without commercial

documents.

Its open network strategy enables

customers to connect more quickly with

their supplier base.

The major part of its revenue is generated from the Scandinavian

region.

Weaknesses

The company lacks a product strategy

in developing and promoting its solutions.

Opportunities

The company can expand its business to the emerging markets in the APAC

region.

The increasing demand for e-invoicing

in the Government sector provides an opportunity for it to increase its market

share.

Threats

The increased competition might force the company to reduce the price of its

e-invoicing offerings to retain its market

share.





17.3 Esker SA


Esker SA is one of the leading providers of document process automation solutions that enable

organizations to eliminate paper-based business processes. The company has operations in a

number of countries such as the US, the UK, Germany, Spain, Australia, Malaysia, and Singapore.

Its product categories include document process automation solutions, fax server and fax

services, and host access solutions. Its document process automation solutions include Esker

DeliveryWare and Esker on Demand, which simplify paper-based processes. The company also

offers fax server products, including Esker Fax, Esker Fax for Notes, and VSI-Fax software and

services, which automate the sending and receiving of facsimile documents. Its host access

portfolio of products includes Tun Plus and SmarTerm software and services, which enable

personal computers and internet users to communicate with host computers and access shared

data. It also provides mail services, which include production mailing and desktop mailing.

The company offers a wide range of solutions such as cash conversion cycles, fax servers, fax

services, and mail services.


Type Private

Industry Technology

Founded 1985

Headquarters Lyon, France

Revenue US$47 million (FY2012)

Employees Approximately 275 (2012)





Exhibit 9: Product Portfolio of Esker SA


Esker SA

Cash Conversion

Cycles

Order-to-Cash

Procure-to-Pay

Fax Servers

Production Faxing

Desktop Faxing

Fax Services

Esker Fax for Exchange

Esker Fax for Notes

Mail Services

Production Mailing

Desktop Mailing






Exhibit 10: Business Segmentation of Esker SA


Esker SA

Esker DeliveryWare

Esker on Demand

Fax Servers

Fax Services

Mail Services

Host Access







Product Portfolio Esker DeliveryWare

Key Highlight 2012: Recognized as the world leader in automated

sales order processing solutions for SAP systems

Key Customers AGF Belgium Bank SA

Allergan Inc.

eFunds Corp.

GE Healthcare

Sallie Mae Inc.

Vector Ltd.






Strengths

Esker is one of the leading prov iders of

e-invoicing solutions.

The company's on-demand e-invoicing

solution is well-recognized and it has a

strong presence in the E-invoicing

market in Europe.

It is the worldwide leader in prov iding

document process automation

solutions.

Its solutions offer ease of use and

implementation benefits.

It has a very clear pricing strategy for its

solutions.

Weaknesses

The company has fewer partnerships

with system integrators than its peers such as Ariba.

Opportunities

The company can increase its focus on cloud-based solutions and attract the

SMEs segment.

It can restructure its strategy regarding

design to cut costs and make it leaner.

Threats

Enhanced solutions from companies such as Basware and Ariba could pose

a threat to the company's market share.

It faces a threat from specialized

e-invoicing vendors.





17.4 Tieto Oyj


Tieto Oyj is an IT consulting and IT services company headquartered in Helsinki, Finland. The

company serves the Financial, Manufacturing, Retail and Logistics, Public, Healthcare, Telecom,

Media, and Energy sectors. It has a number of subsidiaries in countries such as Austria, Canada,

Belgium, China, the Czech Republic, Denmark, Germany, Estonia, Lithuania, Italy, Norway,

Spain, and Poland. It has operations in 23 countries with a strong position in Sweden and Finland.

It offers a wide range of services to a large number of business segments such as Application

Management, Business and IT Consulting, Business Process Services, Enterprise Applications,

Information Management, and Infrastructure Solutions and Services.

The company's operations are divided into four divisions:

Managed Services

Consulting and System Integration

Industry Products

Product Engineering Services.


Type Public

Industry IT Services and Consulting

Founded 1968

Headquarters Helsinki, Finland

Revenue US$2.40 billion (FY2012)

Employees 16,537 (2012)






Exhibit 12: Business Segmentation of Tieto Oyj


Tieto Oyj

Industry Products

Product Engineering Services

Consulting and System Integration

Managed Services







Product Portfolio Tieto E-invoicing

Key Highlight December 18, 2012: Tieto launched cloud services for

both the Enterprise sector and the Public sector in order

to improve its operational efficiency

Key Customers Apoteket AB

Metsa Tissue Oyj

Nordea Bank AB

Outokumpu Oyj

Pohjola Bank plc

Wipak Oy

17.4.4 Sales by Industry Segment

Exhibit 13: Sales of Tieto by Industry Segment






17.4.5 Sales by Service Segment

Exhibit 14: Sales of Tieto by Serv ice Segment







Strengths

Tieto is a major vendor in the E-invoicing market in Europe.

The company has a global presence

and a good foothold in the Nordic markets such as Sweden and Finland.

It has a large customer base in sectors

such as Finance, Public, Retail, Healthcare, Telecom, and Media.

It operates in four business segments:

Industry Products, Consulting and

System Integration, Managed Serv ices, and Product Engineering Serv ices.

Weaknesses

The company lacks skilled staff for the implementation of e-invoicing solutions.

It lacks a strong collaboration strategy

for effective integration with related technologies.

Opportunities

The company's branding and popularity

in the market and its innovation-driven

culture make it easy for it to approach its huge customer base.

There is a huge opportunity for it to

further increase its revenue in the E-invoicing market by entering emerging

markets.

Threats

The company faces a threat to its

market share from niche players that

are witnessing strong growth rates.





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E-Invoicing Market in Europe 2012-2016