This document summarizes a white paper about how Coupa has redefined procurement through its software. It describes how Coupa has bridged the gap between known and possible procurement technologies by developing an intuitive dashboard interface within their Software-as-a-Service platform. The dashboard provides executives and buyers real-time insights and decision-making capabilities. Coupa's advantage lies in software-as-a-service being integral to their company DNA from the beginning, unlike competitors transitioning to SaaS models.

1. 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, Canada
2009

2. 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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3. 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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Possible
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4. 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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5. 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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6. 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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7. 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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8. 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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9. 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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10. 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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11. 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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12. 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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13. Redefining Procurement: How Coupa Has Bridged the Gap Between What is Known, and What is
Possible
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14. 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 jenncameron@sympatico.ca, or
819-986-8953.
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