Coupa acquires LLamasoft: Defining and Exploring the Overlap Between Direct Procurement and Supply Chain

To understand the points of intersection between Coupa and LLamasoft, we must first understand the intersection between procurement and supply chain. These two functions are distinct within most companies. Procurement activities are historically centered on managing commodity and category spend, negotiating with suppliers, putting contracts in place, managing onboarding and compliance, and tactical/transactional buying. According to CSCMP, the primary activities of the supply chain function are orchestrating supply and demand both internally and with third-parties (including suppliers, logistics providers and customers).

Conceptually, while supply chain includes procurement as part of an end-to-end process, it is nearly always managed as a distinct function with different workstreams. In practice, while there can still be a significant skill set, talent and even academic (university program) overlap between both groups, both functions operate independently even if there is the partial or full capability of one group to speak the language of the other (depending on company sophistication and industry).

Let’s unpack this a bit to understand where Coupa and LLamasoft conceptually fit together and the challenges they are proposing to tackle.

Disclosure: Spend Matters’ parent company, Azul Partners, provided due diligence services to Coupa as part of this transaction.