Q&A with Coupa Board Member Leslie Campbell on the Big Ideas: AI, Automation and the Future of Procurement as We Know It

digital business transformation

Leslie Campbell, former CPO of Reed Elsevier and vice president of procurement at Dell Inc., has certainly seen a lot in her years as a high-level procurement practitioner from her perch in the c-suite.

Having joined Coupa’s board of directors relatively recently, Campbell had been excited about where the solution provider was headed. We recently had a chance to get her thoughts on some of the trends and predictions swirling around the industry.

Spend Matters: As you know, the beginning of 2018 — or any year — brings predictions. I would be remiss if I didn't check in with you just to see what latest trends in the industry you've personally had your eye on.

Leslie Campbell: The biggest one, and it's no surprise — you can call it what you want, but it's digital transformation. And it's kind of funny that even in 2018 we're still talking about the fact that procurement needs to get automated. But we are. We're still talking about that. And the solutions that have been implemented that have been out there and available over the years have been essentially ERP solutions, and they're big and they're cumbersome and they're hard to get up and running, and nobody really wants to use them, and you've got a handful of super-users who really know what the heck is going on in those things. So they've got supreme job security, because they're the only ones that can figure out exactly how these big systems work. The idea was to speed up procurement, but in some ways it's slowed it down.

Digital transformation has a lot of manifestations. It's automating, at its most basic level, your transactional procurement, your procure to pay. And for some companies, lots of companies actually, that still hasn't really been done. They might have pieces of it automated, but they don't truly have it automated from “procure” all the way through to “pay.” The transactional costs associated with doing all that stuff or pieces of that process manually are just huge.

It's hard to quantify, but you can look at it and say, "Oh, yeah, this is costing us a lot of money." You don't have to even get real data to know that that's an expensive way to do things. You're losing out, you're going off contract, you've got a lot of headcount doing not much value-add activities. So that piece alone and the fact that we're still talking about that in 2018, says there's room to improve here.

SM: We've seen and heard a lot about the challenge of tech adoption on the practitioners’ side. But also on the providers’ side, you're selling a suite of products that most companies are having a hard time implementing as fully or as effectively as they could. Is that a big deal to you? If so, why?

LC: I do think it's still a big deal for a lot of the solutions that are out there. First and foremost, getting that automation accomplished and doing it in a way that is both robust enough to address and fix problems, but also easy and quick enough to implement that companies will actually go out and do it as opposed to say, "Oh, God, this is such a huge project. We've just got to put it off."

And I think that's one of the things that Coupa is trying to solve. It was one of the basic tenets of the product when it was first created. “Let's make something that you can get up and running quickly, and that is intuitive enough in its user interface that everybody can get it right away.” You don't have to go off for a weeks worth of training, which you only remember for 48 hours after you've had the training, and then if you don't use the product every day, you forget it. That's not sticky enough. It isn't contingent upon a small group of back-office super-users to drive the solutions. Everybody in the company can do it, because that makes the solution way stickier.

It just shouldn't be that complicated. You don't want people spending a lot of time on procurement. It should be something that gets done easily and quickly. [The technology is] there to support the strategy of the business. It is not the strategy of the business.

SM: That brings us to another of these “hot” topics that we saw a lot of focus on last year: artificial intelligence and machine learning within procurement technology. How do you view that?

LC: The key, if you go back to this idea of adoption, is to get all of your spend made visible, so that you can start having analytics-driven insight. The only way you do that is if you're actually managing that spend — if it's going through your systems and becomes visible to the people you want it visible to.

So you have to have widespread adoption because that's how you capture all that data. Then once you start being able to view the data, you just exponentially increase your ability to make better and better decisions, whether it's through AI and machine learning, whether it's through other things like community intelligence — what other people's experiences are with the suppliers in your supply chain, for example.

It's not just limited to AI or machine learning. It's every place that you can get insight into your supply chain from whatever source you can find it. The more you get that spend under management and you can see it, the more sources for external insight you can bring in and incorporate, and the more you can automate that process. So, for example, community intelligence. You do it in your personal life. You look at reviews on products and you make decisions based on that. Why in the world wouldn't you want to be able to have that same kind of functionality in your business life? I think you would.

SM: Do you see the focus on AI and machine learning in procurement as marketing hype, to a degree? In other words, have we become too focused on what types of advanced capabilities a solution has, when so many procurement organizations are still trying to land on something simply to help them move away from paper?

LC: I think it's different for every organization. It depends on where they are in their evolution of the function. And I think like any kind of transformation, you sort of have to have your eye on the endgame. You have to say, "When my transformation is complete, what does this look like? What kind of information do I have? What kind of insights do I want to be able to glean from the data that I have at my disposal now? How do I want my stakeholders to be participating in this?”

Then you have to say, "Okay, where am I today?" And if you're still processing paper invoices, then I don't think worrying about AI and machine learning ought to be the number one thing on your priority list. I think clearing your desks of paper ought to be number one so that you can then start seeing, digitally, the data that will be driving the kinds of decisions that you need to make next.

Then you can start worrying about how much more elegantly you can make those decisions, and how much more sophisticated you can become in the research that you want to do or the research that you want to tap into in order to make those decisions. And that's when stuff like machine learning and predictive supply chain information starts to come into play. So I wouldn't say, "Don't think about it." I think you want to talk to the suppliers of your solutions about their capabilities in these areas, but you need to keep in mind where you are in your process and solve first things first.

SM: OK, one more super-longview question before we get into a more specific topic of the current cultural moment. In your opinion, what does the future of procurement look like — and not like 2018 or 2019, but let’s say 2025 or 2030?

LC: I suspect in the next decade or so we will be talking much less about the physical automation of spend management processes, and be focused much more on the insight derived from the more robust and sophisticated data to which we will have access. In order to survive and flourish, most companies will have automated all their paper processes, and sourcing, contracting, procure-to-pay, invoicing and expense management will be virtually frictionless.

The really exciting stuff starts to happen when a company has broad visibility across both their spend and their supply chain, and can combine that with deep financial, industry and community intelligence. When companies have access to real-time information about their suppliers, they can make sourcing decisions proactively to take advantage of new innovations, or to avoid supply chain disruptions before they occur. Comprehensive data will also help companies to optimize, influence and even collaborate and innovate with their supply chain to benefit customers. And there is no question that customers will continue to demand more information about the goods and services they buy. With better data and enhanced transparency in supply chains, companies can make decisions that take into account not only the cost and quality aspects of their supply chain, but also the social and environmental impact of the suppliers they choose to use.

In short, I think in the next decade we will see the best companies leverage the process automation that most are undergoing now, in order to capitalize on the rich data insights that are derived from that automation as a real competitive differentiator. The business spend management industry will have fewer vendors and will experience significant market consolidation (as we have already started to see) where mergers and acquisitions will power even more unified solutions such as Coupa, thus reducing the number of point solution providers.

Stay tuned for Part 2 of our Q&A with Leslie Campbell. This interview has been condensed and edited.

See for yourself how Coupa ranked across multiple solution categories of Spend Matters’ Q4 2017 SolutionMap.

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