Coupa – game changers in P2P technology? (Part 2)

Today we’ll go beyond the basic Coupa user experience – which we featured yesterday - and look at the strategy behind Coupa and their product, and what that means for their clients.

It’s key that the whole thing was designed from the start to be fully cloud based and – while this is getting a bit techie for me – is genuinely “multi-tenant”, running on a true “single instance” of the underpinning software code. This means that improvements can be made quickly and easily. Coupa has a 90-day innovation cycle, producing upgrades and enhancements with that regularity – an incredible rate compared to traditional ERP products.

That structure also drives ease of implementation. “The days of year-long implementations have gone” say Coupa. Those long implementations don’t help get spend under control quickly and certainly (personal experience here) annoy the hell out of users! Because of the configurability and simplicity of the platform, the implementation process is rapid and low cost compared to most alternatives.

Coupa reckon on it taking just days from ‘go’ to live running, and 2 - 4 months for a major, full organisation-wide implementation. They also claim that across 200 implementations, none has failed, and the training requirement is minimal as everything is designed to be intuitive – just like you don’t need training to use Amazon.

All this contributes to the Coupa claim that users have 85% of spend under management, way above the average, and have reduced maverick spend by 33%. Frankly, it’s hard to verify these numbers, but having seen the product, they are credible. It’s fair to say that the platform has been used principally for indirect spend, although some clients are now looking at Direct, and it is used for both goods and services. However, for more complex areas, like contingent labour or professional services, some users are linking Coupa to Fieldglass, Emptoris or similar systems which have greater overall capability in such categories (including sourcing, contract management etc).

Another somewhat mind-blowing aspect is the level of control and configurability that the system administrator can have. Let’s assume the CPO plays that role. Want to change the requisition approval rules? Introduce new users? Change the access users have to different parts of the product catalogue? All very simple and literally a few minutes work. No need to involve IT...

The same flexibility applies to reports. I remember, back in my CPO days, wanting to get specific output from an ERP system. “Can I see by Department who is buying from which suppliers or catalogues”, I might ask. That would have been a typical and apparently simple request. But it would inevitably cause much head shaking and sucking of teeth from colleagues in IT – then usually a response of,  “that’ll take a couple of weeks and we’ll have to charge you £2000 for the programming”.   With Coupa you can do it yourself in seconds.  Again, over a few years, that adds up to a huge saving over traditional products.

Coupa can integrate with everything from home-grown systems to the major ERP platforms. They don’t charge suppliers or buyers for connecting to their network, and while they’re not pushing this aspect particularly hard, you wonder whether in time they may become a real competitor to the Ariba and SAP networks?

One area that may be further explored is their ability to benchmark across their clients. Coupa are doing this to some extent at the moment, more in terms of efficiency metrics (cycle time, number of suppliers, orders processed per FTE etc) rather than prices.  But their ability to aggregate all their data – because of the multi-tenant nature of the product – suggests some very interesting future options.

We’ll have more comment next week in the final part of this series as we look at Coupa’s move into Europe and draw some conclusions on the competitive landscape.

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