The Spend Management Category

Why Platforms Need to Monetize Their Supplier Ecosystem

Because P2P solutions started giving away supplier portals, cash flow optimizers, analytics, support, etc., they closed a revenue door. Trying to build a sustainable business model when half your ecosystem is not monetized is very challenging, even as P2P platforms add features and functionality. Sure, many platforms are trying to figure out payments, and that is something that scares the bejeebers out of them due to regulations and compliance rules. (Don’t pay that blacklisted vendor or person, or else.) But payments is not a profitable business for platforms, it’s a service.

Coupa: Vendor Snapshot (Part 3) — Commentary and Summary Analysis (2018 Update) [PRO]

Since we last reviewed Coupa, the provider has continued to increase its market share within the source-to-pay technology segment, albeit with a primary focus on procure-to-pay (e-procurement and invoice-to-pay), spend analytics and sourcing. As we have noted in the past, numerous areas can be credited for its continued ascent, including a spend under management growth rate that continues to exceed revenue growth — a metric that shows the rapid manner in which customers are implementing and scaling Coupa implementations relative to first generation procure-to-pay (P2P) solutions. Coupa’s metrics-centric approach to measurable business value is an extension of its own culture, including an emphasis on rapid solution development based on listening to customers and creating accountability for results.

While Coupa is not an ideal fit for all procurement technology requirements, it has become the new benchmark by which other e-procurement and spend management technology suite vendors must measure themselves, or at least in comparison and differentiation. In many ways, Coupa’s initial public offering (IPO) established the first of a new generation of providers assuming a leadership position in the market.

From a competitive perspective, when we last wrote, we suggested that  Coupa had moved from the hunter to the hunted, although its competition remained fragmented, with the exception of SAP Ariba, which it continues to encounter most in shortlist and evaluation considerations, and Oracle, which is now its second largest competitor as it markets itself as the provider of “Business Spend Management” solutions. More recently, we also have seen Ivalua be considered in — and often win — a range of often large deals, with an emphasis on public sector, healthcare and manufacturing, in situations where Coupa, SAP Ariba and others might have been in the pole position in the past.

Regardless, Coupa competes against both a select few and many dozen of providers — depending on the situation and how fragmented the competition is for a given opportunity, geography, industry or modular need. Regardless, Coupa competes against both a select few and many dozen of providers — depending on the situation and how fragmented the competition is for a given opportunity, geography, industry or modular need.

This third and final installment of this Spend Matters Vendor Snapshot covering Coupa provides an objective SWOT analysis of Coupa and offers a competitive segmentation analysis and comparison based on Q4 2018 information. It also includes recommended shortlist candidates as alternative vendors to Coupa and offers provider selection guidance. Finally, it provides summary analysis and recommendations for companies considering Coupa. Part 1 provided an in-depth look at Coupa as a firm and its specific solutions, and Part 2 gave a detailed analysis of solution strengths and weaknesses and a review of the product’s user experience.

Coupa: Vendor Snapshot (Part 2) — Product Strengths and Weaknesses (2018 Update) [PRO]

Coupa has become the provider “to beat” for procurement software suite customers who want a streamlined deployment effort, a simplified user experience and the ability to capture, manage and influence spend and services. Compared with peers, Coupa excels as a buying front-end for companies, intercepting users when they need to purchase something and processing spend of all types, including highly strategic spend that needs to be optimized. This is different from offering just an e-procurement application — a key point we explore in this Vendor Snapshot.

The procure-to-pay (P2P) process is still very much a part of the Coupa experience, if not the core (even though the vendor does offer standalone sourcing and spend analytics technology that handily beat the SolutionMap benchmark). When it comes to corporate purchasing, Coupa focuses on delivering an “Amazon-plus” experience for users. (Spend Matters stands by its earlier analysis in which we suggested that Coupa delivers a better corporate buying experience than Amazon as a buying front-end, at least compared with Amazon Business.) But as with other e-procurement software companies, Coupa brings a hidden back office component that provides procurement and finance organizations with significant compliance controls, oversight and related capabilities to manage and even guide buyers down specific paths (e.g., procuring a given item from a preferred supplier within budget), integrated community intelligence and even real-time risk analysis while making the overall buying experience almost as painless as shopping on a consumer site — even if the buying experience demands a multi-round negotiation with optimization-backed analysis.

This Spend Matters PRO Vendor Snapshot explores Coupa’s product strengths and weaknesses, providing facts and expert analysis to help procurement organizations decide if they should shortlist the vendor. It also offers a critique (pros/cons) of the user interface. Part 1 of our analysis offered a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Coupa’s procurement software. The final installment of this series will offer a SWOT analysis, user selection guide, competitive alternatives, and additional evaluation and selection considerations.

Coupa: Vendor Snapshot (Part 1) — Background and Solution Overview (2018 Update) [PRO]

There are many perspectives on Coupa. Some believe that the vendor has single-handedly transformed the world of spend management by building a truly unified suite that is 100% cloud-native, atoning for the over-customization, product and user interface sins of those that came before. Others think that Coupa has expanded too quickly and is doomed to repeat mistakes others have made in the past. But this Vendor Snapshot on Coupa is not about perspectives. It instead aims to review Coupa’s procurement software in depth, examining the vendor’s modules in the context of what they actually do today and how they are differentiated — or not — from others.

As we noted in our first end-to-end review of the Coupa platform, the majority of technology analysts no longer prioritize reviewing procurement software (e.g., product demonstrations, production sites) due to methodology or time constraints in evaluating vendors. This is where Spend Matters is the exception. Between attendances at Coupa Inspire, demos required for SolutionMap participation and customer interviews, the Spend Matters research team has collectively spent over a thousand hours analyzing Coupa’s products and talking to customers and prospective customers since we last did a Vendor Snapshot on Coupa. Since this time, we have also comparatively analyzed Coupa and its competitors for a range of constituents, including procurement and finance organizations, for suppliers participating in supplier network ecosystems, and for consultants and systems integrators. In short: we're confident that we've gone further and deeper than any other analyst firm in delving into Coupa's demonstrated product capabilities. Period.

This Q3 2018 Spend Matters PRO Vendor Snapshot Update provides facts and expert analysis to help buying organizations, suppliers and partners make informed decisions on Coupa’s procure-to-pay (P2P) and broader source-to-contract capabilities, inclusive of inventory and travel and expense (T&E) management, offering an overview of the entire source-to-pay (S2P) process in one in-depth series. Part 1 of our analysis provides a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Coupa for source-to-pay software. The rest of this multi-part research brief covers product strengths and weaknesses, competitor and SWOT analysis, user selection guides, and insider evaluation and selection considerations.

A Critical Look at Category Management (Part 4) [Plus+]

Editor's note: This Spend Matters Plus brief is a refresh of our 2013 series on category management, which originally ran on Spend Matters PRO. 

In the last few weeks we’ve looked at some of the drawbacks related to what we might call “traditional” category management (Part 1, Part 2, Part 3). However, we should stress that they’re all aspects of the process that can be overcome by appropriate thought and management effort. The lack of stakeholder involvement we’ve sometimes seen — the overly procurement-centric approach — can be addressed by ensuring that the right engagement takes place. The risk of over-standardisation of approach can be mitigated by being aware of that issue and ensuring it doesn’t happen. But today’s discussion will consider an alternative approach that perhaps challenges more fundamentally the conventional steps in the category management process.

5 Reasons Supply Base Rationalization Can Be the Enemy of Effective Procurement Spend Management

category management

Traditionally, procurement organizations have been advised to consolidate their supplier base (with the handful of suppliers with the greatest percentage of purchases), negotiate strong contractual discounts and encourage their employees to purchase from these preferred vendors at the prenegotiated pricing. On the surface, rationalizing an organization’s supply base can seem like an effective way to improve procurement performance. By rationalizing the number of suppliers that enterprises work with, procurement leaders can reduce costs, improve quality and save the time of procurement teams who are too often lost in the arduous process of managing indirect tail spend. However, due to the rise of more advanced B2B e-commerce platforms and highly volatile pricing fluctuations for products, the supplier consolidation strategy is quickly becoming outdated.

A Critical Look at Category Management (Part 3) [Plus+]

We wrote in the last article about the standardised nature of category management process and practice, and the dangers inherent in approaching different categories via that standard approach. Now let’s consider another failing of much “traditional” category management methodology and philosophy. We might define this as an overly procurement-centric approach to the whole task in hand. The buyer is placed in an almost deity-like position, controlling the whole process and with other participants fitting into their scheme and doing what they are told to by the all powerful category manager.

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Here’s Why You Should Conduct Price Benchmark Analysis for Every IT Purchase or Renewal

If you remember nothing else about this blog post, remember this statistic: 5%. Those are the odds that enterprises are paying a fair price for any given IT purchase or renewal if they are not performing IT price benchmark analysis. In the first half of 2018, only 5% of the IT purchase quotes reviewed by NPI were priced at fair market value based on market benchmark comparisons. That number is dangerously lower than what it was just a few years ago when “fairly priced” IT purchases and renewals hovered around the 30% mark.

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A Good Spend Culture Is Not Just About Saving vs. Spending

procurement savings

At the Procurify office in Vancouver, #SpendCulture is a tongue-in-cheek phrase that sometimes gets tossed about when we see someone being particularly thrifty. It’s ironic that we’d assign that meaning to the phrase when our own spend culture is very much focused on investing in rapid growth and creating an agile environment where we prioritize keeping our team comfortable, motivated and well resourced for continual development. Our office in Vancouver is located in a prime downtown location. We have a kitchen well stocked with snacks (including cider on tap) and dedicated space for video games (including a VR station), among other perks. To some business leaders this seems like the opposite of a good spend culture. We would humbly disagree.

The Path to World-Class Spend Management: Identifying an Ideal Solution Partner

No organization wants to practice merely average spend management. But as business becomes increasingly more complex, achieving world-class or even superior results has become more challenging, too. Attaining better spend management outcomes will, of course, require organizations to use modern software solutions in this digital era. Yet while software is a necessary condition to improved spend management results, to achieve world-class results requires more than technology alone. Procurement organizations have begun to recognize this. They are becoming less focused on software features and functions and are expecting more. They want a partner that is focused on outcomes and bottom-line results, one that actively participates in the delivery of those outcomes or even owns and guarantees them. Here's how to identify such a partner.

Tail Spend Management in the Trenches: Lessons Learned and Questions Answered [PRO]

purchasing

Spend Matters recently hosted a webcast exploring how Owens & Minor revamped its tail spend management strategy using Simfoni, a procurement solutions provider with specialized capabilities in this area. This Spend Matters PRO brief shares the detailed learnings — including segmentation approach, KPIs and ROI elements — and Q&A conducted during the session to aid procurement organizations in their own efforts to tame the tail.

(For those who want a full download of the webcast, which features Owens & Minor-specific data and screenshots of Simfoni’s tail spend system, check out the on-demand replay.)

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Can Spend Actually Influence Revenue? Here’s Why Your CPO Will Be Your Next CFO

In 2017, Parsa Saljoughian, vice president of Institutional Venture Partners (IVP), set about the monumental task of analyzing each and every shareholder letter that Jeff Bezos had published since Amazon went public in 1997. In the course of studying the 20 letters, Saljoughian made a curious discovery: Bezos doesn’t seem particularly fond of the word “revenue.” In the course of those 20 years, Amazon increased its revenue by 120,000%, and yet “revenue” is mentioned only 12 times in those 66 pages of letters. Instead, writes Saljoughian, Bezos used these shareholder letters to talk at length about the company’s “inputs,” referring to aspect of the company's business that were controllable, such as spend management.