Our market

Expertise and understanding provide advantages

Our competitive advantage is our understanding of the customer’s commercial operations and business processes, combined with proprietary solutions. Our leading status in the development of integrated solutions for the major business systems of SAP and Oracle is particularly robust, which gives us an extremely strong position as the market develops quickly. A significant number of inquiries to Gartner reveal that organizations that have implemented – or are in the process of implementing – an ERP system are struggling to realize its potential benefits in improving AP paper invoice processing. Some firms have resorted to best-of-breed solutions, while others continue to struggle with largely manual processes. Organizations looking to improve their AP processes must understand the strengths and limitations of ERP suites in this area, and should not automatically assume that an ERP suite will solve all their paper invoice challenges*. Obtaining ROI from content management technologies isn’t always easy, but capture can be a high-value investment area. Paper invoice automation solutions can augment existing ERP AP solutions by expanding the scope of control into process management through workflow routing and approval processes, matching solutions and analytics. Together with customers and partners, we have also developed solutions to integrate capture into Microsoft SharePoint, which is a business platform for collaboration and information exchange that is growing quickly on the market. ReadSoft is a Microsoft Gold Certified Partner. We also have the most advanced platform on the market, which gives us unparalleled flexibility in terms of adapting our systems. According to Paystream Advisors’ “Invoice Automation Benchmarking Report” from 2010, ReadSoft’s invoice-management solution is highly scalable, which according to them means that it can easily meet the invoice processing requirements of companies of all sizes. According to Paystream Advisors, this is clearly proven by the fact that ReadSoft has a diversified customer base that ranges from global corporate groups to local companies. With establishments in 16 countries and partners in a further 70 markets, our global presence enables us to offer strong support during installation and operation.

Greater demand generates growth

This segment is expected to grow by an average of 8 percent in the next few years. There are several factors that indicate this:

• The investment quickly pays for itself once integrated with the business process. The clearest example of this has been invoice processing, which when linked to procurement management, usually pays for itself within one year. This is an area in which we have long been the world leader.
• Data capture is used for a growing number of types of incoming documents, mainly fax and e-mail. This benefits us since we have well-developed technology for managing all kinds of documents.
• There is greater integration of Business Process Management and data capture. This has already begun with invoice processing, but Harvey Spencer believes that greater integration with other business processes such as loan processing, claims management and administration will provide more added value and generate growth in the entire market. Here, we are already far ahead and have products with this functionality.
• A greater insight into the fact that trend towards electronic invoices is slower than expected means that a need for efficient processing of paper invoices still remains. This will drive the growth of data capture. However, many invoices are sent by e-mail to reduce printing costs and software for data capture is used to process them. This parallel development benefits us since we have a well-developed technology for processing both paper invoices and other formats such as PDF, Smart XML and electronic invoices through electronic brokers.

Expanded market

According to an American analyst firm, the need of finance departments for automated invoice processing and electronic document management constitutes a constantly growing market where their customers need help with needs analyses and the selection of suppliers. The same consulting firm has considerable experience of helping its clients with this process and they have noted an increase in the number of large customers that are implementing solutions to automate the processing of supplier invoices. The Hackett Group has conducted a poll that indicates major growth potential in the market for automated invoice processing. Only 17 percent of companies currently use both automated invoice processing and content extraction as their primary method for processing paper invoices.

Centralized administration benefits global suppliers

Another reason for the growth is that the transactions being made are increasing since they are increasingly being signed for centrally at global groups. This trend, in turn, is driven by the fact that many international companies are focusing on enhancing the efficiency of their administration by concentrating it to a few global centers, known as Shared Service Centers (SSC). Doing this efficiently requires process-integrated automated document management for financial information and other types of documents. This creates advantages for major suppliers with a global presence and that have the resources to handle more extensive systems, and this benefits ReadSoft. ReadSoft already has over 100 Shared Service Center customers worldwide. According to a recent study by Gartner, SSC deployments are predicted to grow by 23 percent over the next three to five years. According to The Hackett Group, world-class performers have a processing cost per procurement order that is about 92 percent lower than the average. The cost per invoice also declined by 12 percent for these companies between 2008 and 2009. These companies are also increasingly utilizing automated processes in conjunction with invoice processing. As many as 80 percent use electronic or paperless transactions, which can be compared to 22 percent among the companies that are not high performers, according to The Hackett Group’s definition. For a median company, this corresponds to a potential savings margin of about USD 2 to 3 million in terms of the total administration of purchases. Based on The Hackett Group’s definition of what constitutes a world-class performer, ReadSoft is currently working with a number of customers to create solutions that help achieve this level and thus ensure world-class cost efficiency.

Growth accelerates

Despite a tough market and lower growth, the total market for data capture, including products, services and maintenance, increased to nearly USD 2 billion between 2008 and 2009. Taking into account exchange-rate fluctuations, this corresponds to growth of slightly more than 2 percent, which is lower than the year before. However, by the third quarter of 2010, growth had accelerated and reached approximately 11 percent. The US, Latin America and Asia are experiencing stronger growth, which was strengthened by the euro’s lower valuation against the US dollar. At the same time, there continued to be considerable economic uncertainty both in the US and the European market. Manufacturers that have clearly defined solutions targeted at specific industries achieved more success than the generalists, which is an indication that our target-group thinking continues to be a successful strategy. According to Harvey Spencer’s assessment, annual growth was calculated at about 11 percent through 2013, when the global market is expected to have slightly more than USD 3 billion in sales.

Increased demand

More than 80 percent of all information that a company receives is unstructured. An estimated USD 25 to 30 billion is spent each year on gathering, interpreting and entering business information. Most of this is still done manually on computers. However, there is a trend towards increasing automation of document management, mainly due to a continuously growing share of digitized information and higher personnel costs. Even though a large share of the manual data entry has been relocated to low-cost countries, such as China and India, wage costs have also begun to rise in these countries along with the development of the domestic economies. As a result of accelerating development and intensifying global competition, there is an increasing need for companies to improve the interaction of various departments, acquire more information faster, and continuously cut costs. The need to oversee document processing and integrate document management throughout the company’s organization is also increasing Requirements for transparency and being able to monitor business events in real time also increase the need to be able to extract and process information from business documents as early as possible. This benefits us since we can offer comprehensive solutions that capture, interpret and classify information which can be easily integrated with major established business systems. A development is also taking place in society whereby citizens’ demands for access to information is increasing. Different countries are implementing rules for e-governance at the national and local level to increase transparency, at the same time as individual confidentiality is being safeguarded. This is where a division arises between those who are computer proficient and those who are not, in terms of the use of electronic correspondence. This leads to a need to understand, manage and control all unstructured information more efficiently. It must be managed with the same speed and efficiency as information that is generated and delivered electronically, while simultaneously reducing costs.

Higher security requirements

The global economy is driving the development of regulations that are not limited by borders and will prevent financial crime and other improprieties. Consequently, companies with global operations must increasingly install shared systems that follow a certain standard, which benefits the market for automatic document management. One example is Basel II, which stipulates that every bank that conducts business in different countries must have risk management systems.

Other examples include the US Patriot Act, which affects all companies that export to the US and all people living in the US who have a bank account abroad. The US corporate code, the Sarbanes-Oxley Act (SOX), affects companies in the US and the rest of the world. In the EU, directives have been issued that will harmonize various kinds of business operations within the entire union. Regulations similar to SOX are also in effect in Japan. This results in IT systems gradually becoming more similar in all countries, a trend that primarily benefits ReadSoft that can offer multinational corporations both standardized document management solutions and global support.