Coupa White Paper

Redefining Procurement:

How Coupa has Bridged the Gap Between What is Known and What is Possible

A Knowledge Leadership Publication

By Procurement Insights Author Jon Hansen

Ottawa, Canada2009

Table of Contents

Executive Summary: A View to the Future .................................................... 3

Thinking Outside of the Box ........................................................................ 4

A Matter of Hereditarian Vision than Market Expedience .............................. 5

An Intuitive Interface to Web 3.0 and Beyond ............................................... 6

A View to Increased Savings ........................................................................ 6

Functional Reality versus Automated Functionality ....................................... 7

Rethinking How Companies Save Money ...................................................... 9

Evaluate Your Vendors by the Company They Keep! ................................. 10

About Coupa ............................................................................................. 12

About the Author ....................................................................................... 14

Redefining Procurement: How Coupa Has Bridged the Gap Between What is Known, and What is

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Executive Summary: A View to the Future

It is not too often that I encounter something truly remarkable within a world of that which is well known. What is even more amazing is that it is often the seemingly obvious that delivers the greatest surprises.

For many years and with funding from the Government of Canada’s Scientific Research and Experimental Development (SR&ED) program I oversaw the development of what at the time was referred to as the next “next generation” technology. Based upon a platform that extended beyond what we have come to know as Web 2.0 today, and even the semantic-based Web 3.0 of tomorrow, my work and some would even say passion centered on the possibility of creating a platform that combined the power of an intuitive interface with the “built-in” intelligence to seamlessly integrate the various elements of a “best-value” purchasing decision on a real-time, real-world basis.

Providing an intuitive, interactive interface that levelled the proverbial playing field in terms of user expertise and experience meant that a first-time novice could use the system and reliably process an order with the same degree of competency and confidence of a seasoned user. So we created an advanced dashboard in which individual purchasers could utilize this centrally monitored platform to create opportunities, engage suppliers, close bids, and once the system had done its magic – create on-line purchase orders that could be instantly dispatched to the selected or winning supplier directly from the buyer’s desktop.

In essence, the dashboard was the lynchpin that connected technological breakthrough with real-world operational efficiency to both equip and empower frontline buyers to consistently achieve “best value” results on each and every transaction.

I have never seen a dashboard that rivalled the one we developed with SR&ED funding, until today.

What Coupa has achieved with its latest release is the creation of a dashboard that parallels the interactive capabilities of what I described above within the framework of their already effective Software-as-a-Service “SaaS” platform.


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The purpose of this paper is to provide you with the insight and understanding of why Coupa has successfully “bridged the gap between what is known and what is possible,” and in the process redefined the modern, globalized procurement practice.

What is Discontinuous or Disruptive Innovation?

“Discontinuous Innovation (DI) is disruptive, powerful and hard to see. DI happens when a new entrant or existing player in the market changes the rules in an unusual way.”

Thinking Outside of the Box

In 1995 Clayton M. Christensen introduced the term disruptive technology in an article he co-wrote with Joseph Bower titled “Disruptive Technologies: Catching the Wave.” Recognizing that technological breakthrough on its own has no disruptive or sustaining qualities Christensen re-coined the phrase to disruptive innovation in his 2003 book The Innovator’s Solution. (Note: The Innovator’s Solution is the sequel to Christensen’s highly acclaimed 1997 book The Innovator’s Dilemma.)

Christensen contended that the “strategy or business model” that the technology enables is where the disruptive impact first takes hold. While I agree in principle with his assessment, in that Software-as-a-Service or “SaaS” is a game changer, the market might be inclined to assign too great a value to the SaaS moniker without appreciating the significant differences behind the “technological curtain,” and in the process minimize its true potential - a potential which is inextricably linked to a technological engine.

This of course begs the question, what is a true SaaS technological platform, and how do you distinguish between the players in the ever-shifting vendor landscape to find out which company is truly positioned to deliver results commensurate with the promise of the SaaS model?

I believe that the answer can be found by looking at a company’s DNA. And if you do this, you will surmise that Coupa’s edge is not just linked to the breakthrough, forward-looking technology they have developed, but is also closely tied to the company’s pre-existing SaaS DNA.


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A Matter of Hereditarian Vision than Market Expedience

There is an old witticism that goes, “if I haven’t seen it yet, it’s new to me.”

While many of the original SaaS companies have been around for as long as 25 years, the concept of on-demand or SaaS as a viable model entered collective consciousness in 2000. That was the year that the Software & Information Industry Association’s “SIIA” eBusiness Division wrote their white paper “Strategic Backgrounder: Software as A Service.”

In defining the core principles of SaaS, the paper (which was released to the general public in 2001), highlighted the fact that the new model will “remove the responsibility for installation, maintenance and upgrades from the over-burdened MIS staff.” And as a result, “packaged software, as a separate entity would cease to exist.”

Why is this a key differentiator for Coupe? The answer is quite simple; this is the model under which the company was built. A model that dictates vendor revenues be tied to fees versus a binding contractual arrangement where copious amounts of dollars were and continue to be paid for time spent versus results achieved or realized.

And under this “publish or perish” principle of customer-centric focus, Coupa has gained a considerable advantage in that rather than having to adjust to a new reality (or the overhaul of the corporate DNA), their energy has always been centered on expanding the operational reach of a proven solution in an effort to better serve a market that has finally caught up with the SaaS concept.

And it is from these elemental roots that Coupa has “bridged the gap between what is known and what is possible,” enabling the company to announce this summer’s e-prourement innovations!


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An Intuitive Interface to Web 3.0 and Beyond

As indicated earlier in this paper, when I was invited to a private screening of Coupa’s summer release, I went with an open mind and little expectation beyond what I thought would be a modicum of enhancements to what I already considered to be a solid SaaS offering. After all, Coupa is an organization that is in perpetual motion relative to enhancing the user experience.

However, when they unveiled the intuitive functionality of their new dashboard interface, Coupa clearly demonstrated the intrinsic differences between a vendor that is transitioning to a SaaS model, and one in which SaaS and its related agent-based development methodology has been hard wired into the company’s DNA from the beginning.

You see SaaS isn’t just a model it is a way of viewing the processes that define the modern supply chain practice. You can certainly learn it, and even to a certain degree become relatively proficient at it. But for companies such as Oracle and Ariba, they will perpetually be in catch-up mode because SaaS is just not in their original DNA.

A View to Increased Savings

Coupa’s “rich new dashboards provide visibility into spend performance and support improved decision-making.”

Visibility into spend performance and improved decision-making is nothing new. What is new, is that executives now have real-world, real-time access to critical trending data from wherever they are, and at the moment they need it. From an operational perspective, buyers are truly empowered with meaningful interactive tools to make sound purchasing decisions through the same highly accessible, easy-to-use dashboard.


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While I will leave it entirely up to you to visit the Coupa site to check out the other features, and even participate in a product demo, the point I want to emphasize is simply this . . . the new dashboards are not merely functional adjuncts to a software application.

What I am talking about, and what I suggest you look into, is the natural evolution of real-world functional capabilities from a SaaS original.

Then, take the time to check out the competitive offerings from companies like Ariba and Oracle. When you examine the differences between the various solutions, you will see why traditional licensing vendors face a significant challenge, and appreciate the clear and unmistakable advantage for companies whose origins are found in the SaaS model.

Functional Reality versus Automated Functionality

There is a big difference between the automation of functionality and functional reality. With automated functionality, the focus is on the technology more than the process and as a result has led to the consistently high e-procurement/supply chain initiative failure rates that are indigenous to traditional ERP-centric programs.


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http://www.coupa.com/?utm_source=wp&utm_medium=wp&utm_campaign=hansen-wp

Functional reality focuses on the way in which stakeholders both within and external to an enterprise interact, and then seeks to provide a

technological enhancement of that process. Let’s take a brief look at the Coupa dashboard.

From an executive perspective, Coupa’s new benchmarking and dashboard capabilities provides what the company refers to as “rich insights from the transactional flow,” that becomes “valuable business intelligence.”

-These customizable dashboards provide real-time, real-world insight into critical areas including spending, supplier

performance, liquidity and savings.

This means that executives can:a. track spending against savings goals and budgets, b. quantify savings directly from transactional flow through the

platform, c. capture preferred relationship savings (contract savings) at the

supplier, contract and item level, d. forecast future spending, e. monitor supplier performance and ratings, f. monitor liquidity by charting company cash flow, and g. benchmark spend performance against the market.


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Rethinking How Companies Save Money

The model used to be that the procurement organization would vet suppliers, negotiate preferred relationship pricing, and manage vendor catalogues. Employees would log into the purchasing portal, and either shop on preferred vendor punch-out sites, place requisitions against items already in managed catalogues, or submit a free-form request to requisition a desired item or service.

Under that model, the buyer bears all responsibility for sourcing the best deal on the desired item or service.

Through the release of iRequest and iBuy, Coupa’s game-changing technology makes it easy for employees to requisition what they need from virtually any website, while providing a mechanism that facilitates the placement of an online order without sacrificing the approval workflows and controls of the e-procurement application.

With iRequest, employees can use whatever information is available to them to find the best deals on the web, and quickly requisition those items – without even logging into the e-procurement application. And once the requisition is approved, Coupa iBuy facilitates the online transaction by providing all the information the purchasing agent needs to complete the order (i.e. detail page of the requested item, price, site login credentials, shipping information and more).


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By providing the facility through which every employee can quickly and easily source the best “value” deal on goods and services challenges the conventional command-and-control mindset traditionally associated with ERP-driven procurement applications. As a result, a corresponding increase in productivity occurs while simultaneously building a dynamic and reliable supply base leading to sustainable improvement.

Evaluate Your Vendors by the Company They Keep!

One of the most effective means for determining the effectiveness of any organization and its level of service capability is to talk to those who have gone before you – the clients that are currently being served.

While references have lost a good deal of their lustre with the increasing practice of citing new contract wins as a “viable” measurement of acceptance or performance, the advantages of working with an original SaaS vendor is the length of history that exists between the organization and its existing customers.

I want to bring to your attention some of the specific reasons as to why the company is so successful. Take note of end-user comments as a starting point for your own investigation of the Coupa offering.

The above is not merely a simple collection of names reflective of the uneasy alliance that normally exists between customer and vendor, otherwise referred to as a joint survival commentary. That is, a “vote of confidence” from stakeholders who are struggling to make work a current ERP-centric application, and therefore justify their decision to go with a particular vendor.


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What you see above, is the true reflection of client sentiments which are unencumbered or influenced by a significant capital investment. This means that Coupa’s customers are free to tell it like it is reflective of a confidence that they only pay for what they use. And they only use what actually works.

And it is only through the clarifying lens of the subscription SaaS model that an accurate reflection of a vendor’s historic track record and future capability to deliver sustainable results can be reliably determined.


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About Coupa

Coupa is the leading on-demand provider of solutions that control and streamline purchasing for organizations beyond the Fortune 500. Coupa e-Procurement delivers an easy to use, fast to deploy and affordable solution for requisitioning, purchase orders, RFQs, inventory and invoicing, with no hardware to buy or software to license. With deep domain knowledge in e-procurement, a best-in-class software-as-a-service platform, a network of more than 2,300 suppliers, and a fast-growing community of customers, Coupa enables smarter spending practices that allow companies to save money quickly.

Coupa’s Corporate Headquarters is in San Mateo, CA.

For more information please visit, http://www.coupa.com or call 650.585.6306.


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http://www.coupa.com/


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About the Author

Jon Hansen has studied and written extensively about e-Procurement and the changing face of procurement around the globe. In addition to being a highly acclaimed international speaker, his Procurement Insights Blog reaches 300,000 syndicated subscribers each month worldwide, and is currently available in several languages. He has written more than 200 articles and papers on subjects ranging from supply chain optimization and the utilization of agent-based modeling in the software development process to the evolution of sustainable purchasing practices and the impact of traditional ERP-centric implementation methodologies on the high rate of supply chain initiative failures. Funded by the Government of Canada’s Scientific Research and Experimental Development (SR&ED) program Mr. Hansen’s work in both identifying the existence of Commodity Characteristics as well as defining and recording their impact on “best value” purchasing practices represented a seminal breakthrough that led to the establishment of new theories surrounding the practical utilization of synchronized platforms in achieving sustainable coordinated savings and overall process efficiencies.

Other white papers by Jon Hansen:

The Greening of Procurement: How Social Consciousness is Re-Shaping Procurement Practices

Preserving Supply Base Integrity During an Economic Downturn

Yes Virginia! A Profile in Excellence

Riding the Crest of a New Wave: How the Original SaaS Companies Have Gained the Upper Hand

Using Business Process Mapping as a Communication Facilitator in the Global Enterprise

To obtain copies of the above referenced white papers, or to inquire about Jon’s availability to speak at your next conference or seminar contact Jennifer Cameron at [email protected], or 819-986-8953.


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