Basware & LightSource: Procurement Modernisation Done Right

The last few years have taught many finance leaders that the risks in their supplier base and payment flows can hurt them much faster than a missed savings target ever could. 

“Cost still matters,” says Donna Wilczek, Chief Product and Technology Officer at Basware.

“It always will. But it isn't the whole job anymore.”

The biggest risk to procurement isn't overspending. It's missing a payment to a strategic supplier and having them stop shipping to you.

“Operations have to keep running,” says Donna. 

Donna Wilczek, Chief Product and Technology Officer at Basware. Credit: Donna Wilczek LinkedIn

“If a critical supplier walks because they didn't get paid on time, that's not a finance problem anymore; that's the business at risk. And on top of all that, there's a tsunami of government regulation hitting finance teams right now. Falling behind isn't a missed-deadline problem; it's a you-can't-transact-in-that-market problem.”

As a result, compliance has gone from a back-office checkbox to something that determines whether the business can operate at all.

Put this together and the mandate now is about control and resilience. 

“Cutting costs gives you a one-time win. Building an operation that protects the relationships the business actually runs on, that keeps paying off,” says Donna. 

The biggest risk to procurement is missing a payment to a strategic supplier and having them stop shipping to you. Credit: Basware

The gap between policy and reality

Procurement has been asked to do things that it hasn’t been confronted with before. 

Today, organisations are being asked to track global trade and tariffs, predict wars and shipping crises, to compete with foreign companies that have a huge leg up from governmental backing and all while being asked to do more with the same team.

One way procurement leaders are tackling these challenges is the use of real-time visibility into their data.

Cost still matters. It always will. But it isn't the whole job anymore

Donna Wilczek, Chief Product and Technology Officer at Basware

Five years ago, real-time visibility meant a dashboard that was already a day old, but today it is catching duplicates, flagging supplier risks and actually seeing invoices that don't fit the tidy version of the process.

“Here's the thing most people won't say out loud. ‘No PO, no pay’ is a great policy on paper, but a meaningful share of what AP processes every day arrives with no PO, no contract, nothing behind it,” says Donna. 

“And this isn't a maturity problem. We see it inside some of the largest, most sophisticated procurement organisations in the world, the ones running every major system out there. The policy says one thing and the daily reality is another. Real-time data is what lets you see that gap instead of pretending it isn't there.

“The shift isn't about speed, because speed on its own just gets you to bad decisions faster. It's about having data you can act on instead of data you can only look at.”

Real-time data is what lets you see that gap instead of pretending it isn't there. Credit: Getty Images

How AI can deliver measurable ROI

AI systems have made it easier than ever to analyse, combine and even agentically pull data across datasets.

But Spencer Penn, CEO and Co-Founder of LightSource, highlights that you get out what you put in: “There’s a feedback loop from spend analytics and decision-making. If you only look at your spend once a year, or once a quarter, that’s the speed at which you’re reacting to changing conditions within the business. If you are able to see daily dashboards, or better yet fully real time, then you can actually make decisions at that same speed.”

Adding to Spencer’s comments, Donna says: “Real ROI when it comes to AI shows up in a few specific places. Duplicate payment detection, coding accuracy, straight-through processing rates. HCR ManorCare cut two million in annual overpayments. Those are hard numbers out of production systems, not projections.”

But she warns that the hype surrounding AI is everything that can’t show its workings: “71% of finance leaders say they'd reject an AI output they can't explain, and they're right to. Enterprise AI is held to a higher standard than consumer AI. If a solution can't show you the decision trail, what the AI did, why it did it and what the override looked like, finance leaders shouldn't trust it. Explainability isn't a nice-to-have. It's the price of entry.”

Spencer Penn, CEO and Co-Founder at LightSource. Credit: LightSource

Getting modernisation right

Ask either leader what actually determines whether a modernisation effort succeeds and the answer has less to do with technology than most would assume.

The first mistakes often happens before a single tool is even chosen.

A common misconception is that modernisation means replacing what you already have. “It doesn't,” says Donna.

“Most finance leaders are still trying to automate their existing process instead of rethinking the operating model. They buy a tool, bolt it onto a workflow that was already broken and call it transformation.”

She explains that real modernisation means the AI is built on actual transaction data, the messy reality and all, not just plugged in from the side.

“That's the difference between making mistakes faster and actually making better decisions,” she adds. 

The secret is that [your data will] never be clean. You have to start with the best information you have

Spencer Penn, CEO & Co-Founder at LightSource

Agreeing with Donna on the messy reality of data, Spencer says: “The biggest misconception for executives is that they have to wait for their data to be clean. The secret is that it’ll never happen. You have to start with the best information you have at the time and use AI to the best of your ability to get answers.”

Donna points to SAP Clean Core as a real-world example of exactly this principle, working with what's already there, rather than starting over.

"A lot of finance teams are in the middle of moving between SAP variants right now, whether that's to S/4HANA or cloud ERP through BTP, and the whole Clean Core principle is about keeping that core clean instead of cluttering it with custom code," says Donna. 

"If your invoice layer works alongside the ERP rather than being locked inside a single ERP environment, finance can make that move without ripping everything out and they keep getting the full value of the ERP investment they've already made. The business keeps running through the transition instead of stalling for it."

If a tool gives suppliers no value, adoption becomes resistance instead of progress. Credit: LightSource

But even when the strategy is right, adoption is where the battle is won or lost, starting with the suppliers who have to actually use the system.

“You don't lead with what's convenient for you. A supplier doesn't care that your portal makes life easier for your AP team. They care about getting paid accurately and on time. So you make the pitch about them. Fewer disputes, faster payment, being able to see status instead of chasing your team for an answer,” says Donna.

“Adoption you force creates resentment. Adoption that visibly makes their life easier is the kind that sticks.”

Agreeing with Donna, Spencer warns that you only get one shot to make a first impression: “Suppliers are often willing to give a new digital tool a try, but they’ve certainly been burned in the past. If you force them to use a bad tool that’s painful and gives them no value it’ll damage or at least draw down on your relationship.”

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What comes next for procurement

If getting modernisation right is about mindset and adoption today, both leaders agree the bigger shifts are still ahead in who does the work and how procurement and finance relate to each other.

“Procurement and finance are no different from any business function being revolutionised by technology. We’ll see organisations shifting to higher compensation for a smaller number of more experienced A-players,” says Spencer.

“Because a small team with AI tools can multiply their impact. You don’t ‘just need more heads’ like in the past because everyone can spin up their own fleet of phantom AI workers.”

Donna sees a parallel shift at the traditional boundary between procurement and finance.

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"The wall between procurement and finance is already coming down," she says.

"Every invoice is the proof point of a commercial decision somebody made upstream, so managing the two in silos has never made much sense.

"Most large organisations don't operate in a single-system world. They have several ERPs, contracts living in separate systems, plus a huge amount of activity that happens completely outside procurement. That's the reality. A financial control plane means pulling all of that together, covering the full invoice lifecycle from PO to payment in a single place."

The thread running through all of this is financial integrity. “You never trade speed for integrity. Faster is only better if the books stay clean and compliant at the same time,” says Donna. 

She concludes: "I think we'll look back at today's finance organisations the way we look at paper-based procurement twenty years ago. Most routine financial decisions will be made autonomously. But the winners won't be the companies with the fastest AI. They'll be the ones with the strongest governance around it. That's what lets you have both speed and compliance, instead of trading one for the other."