Basware in 2013: Transition to Software as a Service SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Basware in 2013: Transition to Software as a Service
In 2013 Basware, the Finland-based e-invoice operator and Enterprise Resource Planning (ERP) software vendor, was going through a large and critical transition: moving from selling and installing licensed software to selling Software as a Service (SaaS). Basware, which sold automated Purchase-to-Pay solutions for Business-to-Business to 2,000 Nordic and global clients, was responding to a sharp decline in those sales in the previous few years; more and more customers were switching to competitors that offered SaaS.(With SaaS, vendors stored a client's data in an external server or in the cloud, and maintained the software and relevant hardware.) Transitioning to SaaS required the a??114 million company simultaneously to transform its strategy, business model, technology and culture; and the change process was bumpy. SaaS customers paid as they used services, rather than upfront as they did with the licensed software and installation business; that difference had an immediate negative impact on Basware's revenue stream. The company's new SaaS technology would be best in breed when it was complete, but it was taking longer than expected to be ready. Basware also needed to reorganize as a global organization, its sales people needed to be retrained or transitioned out, and its culture needed to adjust to match these rapid changes. At the same time, Basware's e-invoice operator business was booming. In 2013, there were an estimated 63 million transactions across the Basware Commerce Network, and the company expected to hit 150 million transactions by the end of 2015. Speed was the name of the game for Basware, as each transaction brought in money and because the network's size was Basware's competitive advantage. Although the software and e-invoicing businesses were two separate businesses, they were synergistic. The more customers moved from paper to e-invoicing, the more they would be able to use the full functionality of Basware's automated software solutions.
Swot Analysis of "Basware in 2013: Transition to Software as a Service" written by Robert A. Burgelman, Debra Schifrin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Basware Saas facing as an external strategic factors. Some of the topics covered in Basware in 2013: Transition to Software as a Service case study are - Strategic Management Strategies, Competitive strategy, IT and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Basware in 2013: Transition to Software as a Service casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing commodity prices, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China,
challanges to central banks by blockchain based private currencies, wage bills are increasing, etc
Introduction to SWOT Analysis of Basware in 2013: Transition to Software as a Service
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Basware in 2013: Transition to Software as a Service case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Basware Saas, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Basware Saas operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Basware in 2013: Transition to Software as a Service can be done for the following purposes –
1. Strategic planning using facts provided in Basware in 2013: Transition to Software as a Service case study
2. Improving business portfolio management of Basware Saas
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Basware Saas
Strengths Basware in 2013: Transition to Software as a Service | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Basware Saas in Basware in 2013: Transition to Software as a Service Harvard Business Review case study are -
Effective Research and Development (R&D)
– Basware Saas has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Basware in 2013: Transition to Software as a Service - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Leadership & Managing People industry
– Basware in 2013: Transition to Software as a Service firm has clearly differentiated products in the market place. This has enabled Basware Saas to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Basware Saas to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Basware Saas is present in almost all the verticals within the industry. This has provided firm in Basware in 2013: Transition to Software as a Service case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Analytics focus
– Basware Saas is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Robert A. Burgelman, Debra Schifrin can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Superior customer experience
– The customer experience strategy of Basware Saas in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Basware Saas
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Basware Saas does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Basware Saas are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Basware Saas digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Basware Saas has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to lead change in Leadership & Managing People field
– Basware Saas is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Basware Saas in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Basware Saas has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Basware Saas to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Basware Saas in the sector have low bargaining power. Basware in 2013: Transition to Software as a Service has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Basware Saas to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Basware Saas is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Basware in 2013: Transition to Software as a Service | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Basware in 2013: Transition to Software as a Service are -
Slow decision making process
– As mentioned earlier in the report, Basware Saas has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Basware Saas even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Workers concerns about automation
– As automation is fast increasing in the segment, Basware Saas needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Increasing silos among functional specialists
– The organizational structure of Basware Saas is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Basware Saas needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Basware Saas to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Basware in 2013: Transition to Software as a Service has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Basware Saas 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Basware in 2013: Transition to Software as a Service that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Basware in 2013: Transition to Software as a Service can leverage the sales team experience to cultivate customer relationships as Basware Saas is planning to shift buying processes online.
Need for greater diversity
– Basware Saas has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Basware Saas supply chain. Even after few cautionary changes mentioned in the HBR case study - Basware in 2013: Transition to Software as a Service, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Basware Saas vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Basware Saas has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Lack of clear differentiation of Basware Saas products
– To increase the profitability and margins on the products, Basware Saas needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Basware Saas, firm in the HBR case study Basware in 2013: Transition to Software as a Service needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Basware in 2013: Transition to Software as a Service HBR case study mentions - Basware Saas takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Basware in 2013: Transition to Software as a Service | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Basware in 2013: Transition to Software as a Service are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Basware Saas can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Basware Saas can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Basware Saas can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Basware Saas to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Building a culture of innovation
– managers at Basware Saas can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Better consumer reach
– The expansion of the 5G network will help Basware Saas to increase its market reach. Basware Saas will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Basware Saas can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Basware in 2013: Transition to Software as a Service, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Basware Saas in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Loyalty marketing
– Basware Saas has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Basware Saas can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Basware Saas can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Basware Saas can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Creating value in data economy
– The success of analytics program of Basware Saas has opened avenues for new revenue streams for the organization in the industry. This can help Basware Saas to build a more holistic ecosystem as suggested in the Basware in 2013: Transition to Software as a Service case study. Basware Saas can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Basware Saas in the consumer business. Now Basware Saas can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Basware in 2013: Transition to Software as a Service External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Basware in 2013: Transition to Software as a Service are -
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Basware Saas can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Basware Saas has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Basware Saas needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Shortening product life cycle
– it is one of the major threat that Basware Saas is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Basware Saas.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Basware Saas with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Basware Saas in the Leadership & Managing People sector and impact the bottomline of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Basware Saas needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Basware Saas high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Basware Saas needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Consumer confidence and its impact on Basware Saas demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Stagnating economy with rate increase
– Basware Saas can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Basware in 2013: Transition to Software as a Service, Basware Saas may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Weighted SWOT Analysis of Basware in 2013: Transition to Software as a Service Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Basware in 2013: Transition to Software as a Service needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Basware in 2013: Transition to Software as a Service is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Basware in 2013: Transition to Software as a Service is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Basware in 2013: Transition to Software as a Service is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Basware Saas needs to make to build a sustainable competitive advantage.
