Coupa Inspire 2017: Spelling Out the Post-IPO Strategy

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A number of folks on the Spend Matters team are attending Coupa Inspire today, but since Jason Busch couldn’t make it, we’re not going to be doing real-time blogging updates. And that’s OK! Our expanding team is going to take a different approach to covering things. Please tell us if you like it (or don’t)!

To begin, this is the first major Coupa event since the company’s IPO. While Coupa is now officially “in the big leagues,” and although there are more than 1,500 attendees, 100 speakers, and 36 sessions, the event still conveys the spirit of an innovative competitor punching above its weight class.

CEO Rob Bernshteyn kicked off the event and of course highlighted Coupa’s traction: $360 billion spend under management, 535 customers, 3 million suppliers on the network, 150 countries, $1.36 trillion in spend analyzed (via Spend360) and 80 million API calls, to name a few metrics.

More important, he used the letters in COUPA to highlight the firm’s focus going forward. Let’s spell this out.

Comprehensive

The focus here is surrounding the procure/invoice/expense core and to go “deeper and wider” with power user applications that surround the P2P core. Namely these are: spend analysis/optimization (featuring recently acquired Spend360), supplier management (SIM and supplier risk), strategic sourcing/optimization (i.e., new Trade Extensions capabilities), contract management and inventory management.

The bigger focus here though wasn’t on “Feature 500” lists, though. As Rob said, “We didn't want to focus on features and functions,” at the core. He then touched on other “value-as-a-service” capabilities such as Coupa Advantage (Coupa’s charity-funding GPO) and the Coupa Open Business Network. One thing that was somewhat missing was the focus on direct spend and the supply chain, but Coupa has an emerging capability beyond inventory tracking and basic sourcing — Spend360 and Trade Extensions (see above links for our detailed analysis of the acquisitions) are monstrously deep in their niches.

Open

 Rob talked about three sources of innovation: pure technology driven versus market driven versus customer driven (e.g., 150 of 1,100 client community ideas were implemented in a recent release). The more interesting points were about opening up user interactions and adoption (which is Coupa’s mantra in delivering value) that includes:

  • Partnering with Amazon Business to support spot buying scenarios. We’ll be diving this soon to see what’s beyond vanilla Amazon Business capability. Still, this is a no-brainer. One Coupa customer on stage had five strategic suppliers, 20 key suppliers and 88,000 suppliers in the tail!
  • Supporting text-based interactions. It’s not quite WeChat, but 73% of Coupa customers have activated SMS-based notifications. Text on mobile is fine for this, but for expense reports, the ability to recognize and enter voice notes for expenses (i.e., “Purchased breakfast at Starbucks for $9.50”) was even cooler.
  • Finally, for those older users who live in email, the ability to do PO flips and other activity right in email is awesome. As Rob said “There’s no need for a supplier to sign into anything.”

User Centricity

This has also been Coupa’s focus along with every other modern provider these days. As Rob mentioned, it’s not about the UI but about the user experience. We’ve written about this a lot, and as Rob aptly said, “The Best UI is no UI at all.” Moreover, he went on to say that “if code can do the work, then let the code do the work!” This isn’t just supporting more natural interactions as cited above but full on automation that includes machine learning.

Prescriptive

This area was the most interesting to me. When I started bleating on about “guided buying” over 10 years ago, the opportunity was green field. But, for procurement solutions to be “mass customized” and contextually aware to support 1) what a user wants, 2) what the procurement/business policies are and 3) what is best practice and “best supplier” (and these can conflict a bit!), the technology must be able to provide context-specific intelligence. And increasingly, this intelligence will be derived from networked communities or “collectives” that can take many forms: like-minded procurement peers, supplier communities, open innovation crowdsourcing networks, contingent labor networks or users in an installed base of a large SaaS provider like Coupa.

In the B2C world, this derived intelligence is captured at increasingly alarming levels of granularity to serve you up to advertisers. But in the B2B world, it can also be used to not just monitor you but also to help you buy better. It helps a SaaS provider create competitive advantage, as well, by not competing on features and functions of “empty apps” (see here for a piece I just published on this).

Rob even specifically mentioned “three ways that we can bring collective intelligence to our customers” in terms of application intelligence, suite intelligence and community intelligence. This notion of collective intelligence is at the heart of AI for business and even more important in the supply chain and for broader digital business strategies — beyond just procurement. We’re actually publishing a series on the collective intelligence of supply in the coming week, so stay tuned for this, and have an espresso before reading it.

Of course, you’ll need some fancy algorithms and machine learning to use this big data from these communities/collectives to help provide predictive analytics that provide strategic advantage — or even tactical advantage. And just as Rob mentioned that “we’ll build or buy” the powerful applications to wrap around P2P processes, Coupa also just quietly acquired a four-person startup called Riskopy, which provides such algorithms and has integrated it into a supplier risk product that provides such analytics (just like about literally another 100 firms). The idea is then to marry it up with internal supplier performance data to not only predict supplier issues (i.e., this is like Open Ratings 15 years later, but with real analytic horsepower), but also to provide prescriptive analytics in a broader guided buying scenario.

Accelerated (and Agility)

This last acronym is about speed to value. Certainly there’s a well-earned, self-congratulatory aspect to four-month average “go live” durations (albeit with a healthy dose of midmarket customers) and 169 go-lives last year (and 50 go-lives this year already). But, if you talk to any modern CPO, it’s about generating value beyond savings at the cadence of the business, and adding new value as old sources of value are getting tapped out and automated.

We’ll be digging into a lot of these developments and more as we cover the event. As always, stay tuned!

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