Meeting Michael — Coupa’s new CPO on procurement at its most pivotal time

We were delighted to talk with Michael van Keulen recently - the new CPO at Coupa. Michael had been in the seat for just two weeks when we spoke with him, but already had some solid messages to share about the role of the CPO, both at Coupa and generally, especially as he joins at such a pivotal time for procurement. As his CEO and Chairman said in his message to Procurement everywhere: “Procurement is now a primary focus of attention at your company,” it’s your opportunity to “step up and lead.”

Michael comes across as deeply genuine in his passion for procurement. His vision for what his priorities should be at Coupa, and indeed for heads of procurement everywhere, is well founded. Born and raised in Amsterdam, he has been in procurement for 10 years. During that time he has been an early adopter of e-sourcing, has set up the business case to implement Coupa at a global 4 billion dollar apparel retailer, and has led procurement transformation programmes in both the US and Europe to deliver business value. In all, he has more than 20 years’ professional experience, much of that hailing from a finance background - so it’s interesting, not to mention an asset, that he can see what ‘value’ looks like from both sides of the fence.

He’s rather candid about his newest career move. As he’s been involved with Coupa-related projects for so many years now, he tells us this role “feels more like joining my family … it’s an honour and a privilege to work for what I consider to be the Cadillac in the business spend management space.” And he’s excited about the contributions he can make:

“As with any new CPO in any firm,” he tells us, “there are always opportunities to be found to improve internal procurement. But Coupa has a great team with great engagement, so I’m convinced I’ll have all the support I need. Externally, I am taking every opportunity to engage with other practitioners, with analysts like Spend Matters, and with systems integrators and partners to understand the value Coupa brings and what gives us a unique position in the market.”

So what are his first steps as the new CPO at Coupa?

“One thing I have learnt is that many companies still struggle to understand where their spend lies, and where their valuable resources are being spent. Especially those that don’t have a platform like Coupa. So when I ask other practitioners about their total addressable spend, or their spend-under-management, often I find they are still struggling with answers to those questions.

Another thing that never ceases to surprise me, is Procurement’s ‘need to be given a seat at the table.’ My view is: no one will give you that seat. You have to earn it. If the CEO hears one complaint that, for example, an RFP was two days late, and someone can’t execute their strategy because of it, you are going to find yourself in trouble. That seat is there, and it’s yours, but you have to reach out and take it, because the time is right for Procurement to lead.”

“So having said that, my first task at Coupa, given that we have gone through massive growth, made acquisitions and focused on customer success as part of our core values, is to fully understand the spend and leverage that visibility to deliver business value.

The fundamental questions that any CPO should be asking is: how big is the cheque book? what am I buying? what are our contracts? when do they expire? and who are my stakeholders? You need to fully understand your stakeholders, because you are there to drive a better outcome for them. And you need full visibility of everything that’s being worked on right now, with all contracts in one system and all suppliers in compliance. So those will be my priorities too.

From an engagement standpoint, for me alignment with the C-suite is very important, but I realise that they are not going to pave my way into the businesses. That’s my job. I have a value proposition and I need to articulate it. And that applies to any industry you are in. You need access to and engagement with the departments, whether that’s HR or Marketing, and to communicate that your role is to help accelerate their strategy, that you are not just there to help save money. If you can do that, you will see very little resistance and the heads of business will want to collaborate. Those that don’t have this collaboration often find that procurement gets measured solely on savings and treated purely as purchasing engines.”

Given that, how can Procurement better align with Finance?

It was interesting to talk with Michael on this subject, since he is a finance person at heart. He understands how Finance has a tendency to look at spend in a different way from Procurement. “The CFO,” he says, “is concerned with questions such as: am I looking at the right GL account? am I capitalising the right spend? am I holding back what should be held back? am I paying my suppliers at the right time? and so on.

The CPO on the other hand, is not concerned about whether the company is spending 10 million dollars at Office Depot for example, what CPOs care about is what the company is buying from them, because it’s not the expense that they influence, it’s the commodities.

Points of friction often occur when procurement announces it has saved x amount of dollars but the CFO can’t see it. However, if Procurement were able to communicate to Finance about the spend they are addressing, the RFP they are building, whether it’s recurring spend, whether it’s been repurposed and so on, the sooner they would have clear alignment with Finance about savings, cost avoidance, risk, sustainability and all those things that procurement brings to the table. If Procurement can tell Finance: this is when you will see the amount on the P&L, or the balance sheet, and this is when it will reach the cash flow, the sooner Procurement will speak Finance’s language and the sooner those silos will break down.”

“But it’s for Procurement to lead this – not Finance,” he says.

How does he see this crisis changing the horizon for Procurement?

“I have talked to many of my peers and my perspective is that at the beginning of this crisis, everyone went into defence mode. They hoarded cash and couldn’t guarantee to customers that they would honour SLAs, or lead times, or commit to the contract terms they signed - citing force majeure. But as the crisis has deepened, and more of the world’s business infrastructure is affected, we are seeing a change in mind-set, a coming together of the world. We see that in how people are treating the first responders, and we see that in the Coupa community too -- it’s something that hasn’t happened for a very long time. In the supply chain we see customers and suppliers starting to cooperate more: accelerating payments so suppliers can get their hands on the cash earlier and extending contracts to give more guarantee of business. They are looking for ways to help each other, because that’s how we ensure business continuity for the long term.

Now, if you take that back to Coupa, and the community we’ve built over the past 10 years, with the near 1.7 trillion dollars of spend going through the platform, I believe we are in a unique position to enable all of that collaboration. For example, we are doing some joint sourcing events with our ‘Source Together’ platform which uses the scale of the Coupa community to connect buyers with common purchasing needs. So we are seeing lots of collaboration across all our customers to help get everyone through these unprecedented times.

And, it may be an aspiration, but I believe we will see a lot more collaboration after we emerge at the other end of this crisis, and procurement will be seen as a competitive advantage.

I believe Procurement is the one leading us through this business crisis, it’s something that we’ve been training for, for years. In economic good times, companies have a tendency to focus on just top-line growth, but all that has changed; now everybody’s eyes are on procurement, and if we have facilitated a platform that gives us full visibility, we should be ready.

Going forward, I can see the next stage of evolution in AI further enhancing the power of our Community Intelligence, providing CPOs with data and foresight that will be a game changer for them. No-one knows when the effects of this crisis will end, or what the world is going to look like, but I can foresee the customer/supplier relationship being turned upside-down. Suppliers will be choosing their customers, according to their product, social value contribution, vision, sustainability, and so on, and the customer will gain competitive edge through supplier-driven innovation. That will be the new normal, and Procurement will be at the centre of it.”

We thank Michael for sharing his thoughts with us and our reader community in these early days of his role. It will be interesting to catch up with him again in a few months’ time. In the meantime, Coupa chairman and CEO, Rob Bernshteyn, adds:

"Over the past decade, I've seen first-hand the measurable value that procurement leaders like Michael are bringing to their organisations around the world. With the uncertainty facing business and our economy today, the role of procurement is more important than ever. It is their focus on managing costs, identifying supply chain vulnerabilities, and getting the most value out of every contract that will enable their organisations to weather this storm. I look forward to seeing them seize this moment to lead."

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