Last updated on May 20th, 2019 at 11:23 hrs.
Aico’s ‘intelligent financial close automation’ has been around for more than ten years and is being used in a hundred different countries by enterprise customers such as Fortum, ABB, Attendo, Essity, and SCA.
The company used to be a business unit within technology service provider Attido Oy and was spun off per January 1st, 2019.
As a newly independent brand, Aico is eager to grow. I talked with CEO Marko Voutilainen about the company’s offering and positioning, and how it intends to make that international expansion happen.
(For transparency: I contribute to the Software from Finland programme on the topics of doing business with the Dutch and digital marketing in the Netherlands.)
Cloud-based financial close automation
“Aico’s cloud-based platform automates financial close within customers’ Enterprise Resource Planning (ERP) systems, the most common systems being supplied by SAP, Oracle, and Microsoft,” Marko explains.
“Our customers are typically medium to large businesses with a certain level of complexity, with over a thousand employees, more than a hundred million euros in yearly turnover, and operations in multiple countries. We help them to automate accounting tasks that they need to perform as part of their monthly closing process.
“For example, monthly closing of books and quarterly reporting usually take a lot of time and resources from our customers’ financial departments. As they want to publish results as quickly as possible, our automation solution helps them speed up several of these processes.”
To this end, Aico’s financial close automation features four different modules:
- An account reconciliation module;
- ‘Journals’, which helps in creating journal entries to general ledger;
- A closing module to automate closing tasks;
- A request module that works like a ticketing system for financial ERP requests such as opening accounts and opening vendor data.
Speeding up processes by hiding complexity
A common use case, Marko tells me, is when a customer is using multiple ERP systems from different vendors: “If they have, say, five SAP installations, and Microsoft 365 Finance & Operations for their smaller legal entities, to access and compile the relevant data from those different systems and then report them in an integrated fashion is not always straightforward. By interfacing with those data resources and combining them, our platform gives customers the complete closing overview of the whole enterprise.”
“For example, with our Journals module, the customer doesn’t need to know the underlying ERPs,” Marko explains. “It could be an SAP installation running in Sweden or Microsoft 365 running in Belgium. For the customer, using Aico, the user interface looks largely the same and they don’t need to log into those various systems with their different user interfaces and workflow logic. Our solution hides complexity and thereby speeds up financial management and reporting processes.”
While admitting that the large ERP suppliers also try to provide automation modules to simplify things, Marko claims that they tend to be inferior, more costly, that they develop less swiftly and that operability between competitors remains a challenge. Also, customers may only upgrade their ERP systems once every five years or so, which can make it attractive to add a solution like Aico’s in the meantime.
90 percent of prospects have no comparable solution yet
Compared to direct competitors like BlackLine and Trintech, Marko sees Aico’s competitive edge in real-time online integration, supporting multiple ERPs and accounting concepts on a single platform which can be accessed with a web browser.
“That is something that our competition is not able to do,” says Marko. “But perhaps, what we are competing against most is the fact that 90 percent of our prospects don’t have a solution at all and are instead exporting and importing Excel sheets to their ERP systems.”
In terms of market maturity, it’s still early in the day. In his experience out in the field, Aico is sometimes bidding against the usual suspects BlackLine and Trintech, but not always. “The European market alone is huge with 45 thousand potential customers,” he says. For our customers, we are often the first investment of this kind. Most of the addressable market is still missing this type of solution.”
Ambitious growth targets for Europe
As a result, Marko says his company aims at a minimum of 60 to 70 percent year-on-year growth during the next five years, acquiring a customer base of between 500 and 1000, or 1 to 2 percent of its addressable European market.
The demerger from Attido should put Aico in a better position to realise that growth. “We wanted to separate the two companies in order to enable them to achieve their own targets,” says Marko. As Attido is a consulting and services company with its main focus on Finland and to a lesser degree on Sweden, our business models, sales approach and way of working are completely different.
“In Aico we have a product that we can sell to the European market through direct sales and channel partners. Furthermore, by spinning out, we will be better positioned to attract VC money and other kinds of capital.”
The company’s growth strategy seems to be one of controlled expansion, working out of its Finnish home market into the Nordic area, the Benelux and Poland, while gradually complementing its own direct sales efforts with an international sales partner network.
Market making outside of the Nordics
Aico has most of its customers in Finland and some in Sweden. Marko: “Sweden is a logical first foreign market for us because we already have a few reference customers there, which helps in accelerating sales.” Aico will be targeting around 300 prospects in Sweden, which is about three times the addressable market at home.
Late last year, Aico started direct sales campaigns to Norway and Denmark, and the company is looking for potential sales channel partners there.
In the Benelux, Aico has been working with Belgian financial IT consultant TriFinance, who have a business unit they call ‘Complexity Reduction’. Through this partnership, Marko has learned that in Belgium, compared to the Finnish and Swedish markets, Aico’s approach to financial automation is very new and investments have yet to pick up. “So in those new markets we may have to educate customers more,” he says.
Looking for channel partners with a strategic fit
Marko says it’s important to Aico’s management that sales channel partners have the right motivation. That they see the collaboration as a revenue opportunity. Marko: “You might think that the big global consulting companies would be good partners, but they represent hundreds of different kinds of software products. We need partners who see our product as a great fit to their strategy. Otherwise, it will be hard to get real deals.”
What would make a partner go the necessary extra mile? Marko: “In some cases, our solution could be part of their solution. If the partner implements ERPs, Aico could bring a competitive edge to their solution, adding automation that helps their customers save time and money.”
For the Netherlands, Aico recently partnered with Marc Wullings’ agency SkipRed, which provides go-to-market strategy and execution services to foreign businesses entering the Dutch market. SkipRed has a track record of landing Finnish IT companies in Holland.
Opportunities in the Netherlands and Poland
“By size and turnover, there are 600 to 700 companies in the Netherlands that fit our customer profile, which is essentially a larger market for us than the Nordics combined,” says Marko. “In order to enter such an interesting market successfully, we want to make sure that we approach Dutch customers with a value proposition that truly resonates with them. We are confident that SkipRed can help us achieve that.”
Poland represents a different opportunity to Aico, as Marko explains: “Many businesses from across Europe have their financial service centers in Poland because overhead costs are generally lower there than in many other parts of Europe. That’s an interesting niche for us, so we are actively looking for channel partners who could sell to those service centers.”
Actionable advice from ‘Software from Finland’
The Software from Finland programme, run by growth consultancy Pro Growth Consulting Oy, sponsored by the Finnish Software & E-Business Association (Ohjelmisto- ja e-business ry) and supported by the Centre for Economic Development, Transport and the Environment (ELY-keskus), continues until the end of May 2019.
What did Marko expect from the programme and what would he consider a successful outcome? “We are looking for concrete advice and templates for all kinds of plans that we need to make. That was the major reason for us joining the programme: to get good examples of go-to-market plans and strategies. Well… so far, so good.”