Enterprise Resource Planning reimagined by Savoir

Sub11 - A New home for information on fintech in Australia

Sam Thompson from Savoir

The French word ‘savoir’ means ‘to know’, which is exactly why Australian fintech company Savoir was named that - the company aims to increase that ‘knowing’ in its users, allowing them to better understand and transition to blockchain-based resource planning.

What started as two colleagues in the finance sector and an interest in blockchain technology, has since become a solution to bridge the gap between ERPs and the benefits of blockchain, for greater profit and efficiency.

Sam Thompson, founder of Savoir, says “last year, I started to really take a more active interest in the blockchain and crypto space, and I was working in the banking sector at the time, and from what I could see in there, there was a range of opportunities around getting access to funds in an easy way that wasn’t limited by the current system … at a competitive rate, and that wouldn’t drive people to jump through too many hoops”.

“I started to play around with the DeFi [decentralised finance] space a little bit. … From that, I sat down with one of my old colleagues, Dev Jugnarain, who’s our chief operating officer. The two of us worked in the ERP space years ago, quite closely, and we were always limited by what we could do with the software there at the time.

“So, combining those two elements of programmable money plus the ERP which drives how companies should be utilising those funds, paying staff, suppliers, tracking customer payments and all the rest as well, we started to really understand that there was a unique opportunity to build a bridge between those two industries, and that’s effectively what we’re trying to do there with Savoir.”

Savoir offers modules developed to complement existing ERPs and technology investment, in a seamless transition. The company is starting with a ‘treasury’ module, then ‘supply chain’ and ‘HR’ modules, before it combines the modules together with blockchain and smart contract technology to drive process efficiency.

The push from the supply chain perspective also came from conversations with a mate. “I saw it through a friend of mine who was trying to sell a rather expensive product on Facebook Marketplace, and they weren’t able to convince the person buying that product that it was the 'real McCoy’, so to speak. They’ve gone out and spent thousands of dollars on this fashion item, and they didn’t believe it.

“So, it got me thinking a little bit around the technologies that are out there around the blockchain space … and part of what the Savoir product offering is, is to embed an NFT [non-fungible token] within that product, and then that gives the product a unique identity. It can be identified online by anybody who can access the site and prove that ‘yep, it’s the real thing’ because of the non-fungible token technology piece.

“If we can uniquely identify that particular item, then we can track that all the way from manufacture in the factory to trucks, warehouse, to retail store, and that can be automatically scanned and again tied together with something like RFID technology, which has been widely adopted in the retail space at the moment.

“Without any touch or manual human intervention, we can start to really drive some of those amazing process efficacies within businesses, and that’s some of the exciting points.”

Blockchain is becoming more and more popular, but still faces a number of barriers and limitations in terms of both partner companies and users. Thompson says the biggest challenge is the lack of understanding. “It’s a fear of the unknown – there’s a lot of stigma out there in the marketplace at the moment. We certainly saw that at the start of the year and much more in the last couple of weeks, and so it’s trying to lower the fear around that at the moment, in a meaningful way.

“The other key important part that we’re trying to do is – we are developing the technology on blockchain, and at the moment we are seeing a lot of bad actors out there looking at some of the cryptocurrencies and so on. One of the key things we want people to remember and understand is that CBDCs [central bank digital currencies], which are government-issued tokens, are coming into the marketplace in the next couple of years in a very, very active way. Our technology’s been built so that it can take on board those government-issued tokens as well. Back to that point around the programmable money, that’s what we’re trying to really drive at here and help companies adopt the new instruments that are being released by governments as well. So, again, exploring that barrier and helping people make that transition in a way that they can understand.”

Thompson says once those boundaries can be overcome, with what Savoir aims to develop, they will be able to deliver previously untapped economic and productivity benefits.

“Companies struggle to understand how to use it [blockchain technology] effectively. I think that’s where our team are really quite well positioned. We’ve been on the front lines trying to look at technology and understand how to adapt it to business to try and drive some of these benefits.

“With that, we’re looking at cashflow forecasts with that treasury component, looking at where that surplus cash may be available to them [clients] to go and deploy somewhere more effectively, but barriers such as moving it into a bank account … if you want to go push overseas around the US dollars, such as what we’re looking at today, that can take half a week at the moment. We’re trying to traverse all those things and do it almost instantaneously in a way that’s liquid for companies to deposit [and] withdraw with relative speed and ease, and that sort of opens them up to higher deposit rates.

“If you’re a company today out there trading in US dollars (and that’s quite common in Australia – we have a lot of resource-based industry … buying and selling in US dollars [because] deposit rates around the country are next to nothing), if we can go and help a company earn 3 or 4%, and that’s sitting on a $10 million balance … that’s a sizable difference to their bottom line.

“With the supply chain, the ability to track the movement of a product all the way through – there are copious amounts of staff and people at the moment that sit in organisations doing manual data entry around this sort of process. The smart contract can help sort of alleviate a lot of that, and we have seen some examples recently where there has been an application of technology or blockchain. What we’re trying to do at Savoir is merge a lot of that together – the supply chain and the treasury side of things – so we can do end-to-end processes in one hit, rather than this segmented or siloed approach to the way things are being done at the moment.”

Savoir's development is in the early stages, but there are big plans for the next few months.

“We are talking to a few different industry experts. We’ve recognised that we don’t know everything out there and where we do need to leverage knowledge, [so] we are talking to accounting firms and other interesting technology players which are helping solve some problems in the blockchain space. I think it’s about developing those partnerships so that we can come to the market with a more confident outcome and show that we have that breadth of experience and help companies understand and traverse those challenges at the moment.

“We’re starting to talk to a few businesses already about taking on board the prototype that we’re developing, so we’re only a couple of months away from getting our first MVP [minimum viable product] to a point that we think we can start working with a couple of businesses to get them to trial and test for us. Our ultimate goal by around the second quarter of next year is to have this product into a state where we can look to deploy it into the Xero store. From that, we start to work with some SMEs and take on that broader feedback on the product and how it’s operating at that point in time. From there, the goal for Savoir is to develop up to that enterprise level space, but we realise we want to walk before we run.”

As part of that ‘walking’ stage, and the current technological limitations, Thompson and the team at Savoir know they need to start with a small number of verticals that trade predominantly in US currency – namely, the agriculture and mining industries.  

“The reason we’re targeting that first is, in the blockchain space, we’ve really only seen the stable coins – which, those that don’t know about it, is an instrument which is pegged … to a particular currency – and we’ve only really seen the US dollars played at the moment. Euros are starting to come into the scene but in the next 12 to 24 months we’ll start seeing many other currencies – hopefully the Australian dollar for that point. So, for now we’re a little bit limited in who we can approach with our model, until we start to see that broaden in the ecosystem. That’s why we’re sort of looking at those two areas, but there are other examples, such as aviation and finance and so on as well, who trade in US dollars. Again, [we’re] looking for that expansion in the future.”

Outside of the office, or perhaps as part of the reason he got into this field, Thompson has taken a shine to investing. A recent trip to San Francisco allowed him to get a better insight into other tech companies and the tech industry as a whole.

“I think the company Block are doing some pretty amazing things out there – we can see that in the crypto space and how they are really merging traditional finance to what they’re able to leverage through the likes of Bitcoin and that as well. Tying that together with their recent purchase of AfterPay, a company here in Australia, some of their product offerings we see come to market, and linking the Square register with the AfterPay sort of ecosystem, the cash app we’re still going to see deployed in Australia, that company, in my own view, will grow tenfold in the next five to ten years.

“I was shopping in one of the malls over there and went to purchase some shoes and realised they took AfterPay and I thought that was unique – in Silicon Valley and they’re taking Australian product. I asked a woman there at the counter as to how much people use the AfterPay product, and her answer just blew me away and reinforced my view … She was actually saying that 75% of the people that come into her store don’t even carry wallets and all use AfterPay, so that’s I think a bit of a testament to how successful the product’s been.”