(Editor’s Note: This post is a follow-up to the breaking headline “COUPA SOFTWARE ENTERS INTO DEFINITIVE AGREEMENT TO BE ACQUIRED BY THOMA BRAVO FOR $8 BILLION.” Part 2 – A Tale of Two Industry Titans will be published later in the week. #coupa #zycus)
“Organizations that already have a technology-driven program in place or have just recently implemented one still surprise me with their significant interest in the dramatic changes in procurement methodologies and practices. But rather than focusing learning on new and emerging technologies, today’s procurement professionals seek insights into the actual processes that drive their enterprises. The impetus behind this change is the result of the fallout from the consistently high level of e-procurement initiative failures. Industry studies for 2001-2005 indicate 75-85% of all programs fail to achieve the promised results. (Editor’s Note: the failure rate continues today, with some industry pundits suggesting that ERP-centric programs miss the mark as much as 90-95% of the time.)
There is a growing realization that process, not technology, is the main force behind successfully achieving efficiency and spend rationalizaton. Credible targets are established and ultimately met through process understanding and refinement combined with the ability to adapt to the real world.”
From The Article “Technology’s Diminishing Role in an Emerging Process-Driven World by Jon Hansen (Summit Magazine, Sept. 2006)
As complexity dissipates into a picture of clarity and renewed understanding, the lens through which the processes define the organizational supply chain practice provides the necessary insight to effect positive results.
Adhering to the above tenet and coming from a position of expertise and experience, the founders of COUPA (who previously, and ironically oversaw, the Oracle supply chain discipline) deliver what I would call “simply powerful” solutions. The greater emphasis is on “simply.”
An early mentor’s words expressed the belief that “if you cannot describe the product or service you are providing in 20 seconds or less, you do not understand what you have nor how it can help prospective customers.” The mentor’s words have stayed with me because, over time, it has proven to be consistently accurate. And the very real as well as implied complexity of traditional ERP-centric mega projects give testimony to this fundamental truth as the high rate of failure continues to undermine the confidence that key stakeholders have in the selection process of their organization’s senior decision-makers. This lack of trust creates an almost insurmountable barrier to adoption.
And while the incumbent goliaths attempt to address this problem by introducing Service Oriented Architectures (SOA) and championing collaborative programs such as the Mendicino Project (now called Duet), the COUPA methodology and solution overcomes barriers by not creating them in the first place. (Note: The Mendocino Project is a collaborative effort between SAP and Microsoft to address end-user resistance by creating unique interfaces between commonly used MS Office applications and SAP’s ERP programs. Since one of the main barriers to ERP/e-procurement initiative adoption has been the significant reliance on a compliance or change management strategy, the premise (or theory) is that by leveraging the ubiquity of the Microsoft product, the degree of front-line “change” is minimized. The expected outcome is that by providing users with a familiar interface, they will no longer resist the centrally established ERP platform’s introduction as the enterprise standard. Unfortunately, the fatal flaw with this thought process is that resistance is not solely tied to the program’s interface but is also “linked” to the lack of real-world functionality of the ERP’s procurement modules.
Or as COUPA Founder and President Dave Stephens, in explaining the company’s “see how it works” tagline emphasized in terms of the vendor’s key differentiator, “COUPA is the only On-Demand procurement solution that’s amazingly easy to use.”
Are You in The Software Business?
The question I had posed in Part 6 of my 7-Part Dangerous Supply Chain Myths Series was, “are you – being the end-user, in the software business?” (Note: refer to the Web Resources Section after this post for the link to the series.)
The basis for the question resulted from a conversation with a senior-level executive who lamented that she had to dedicate two full-time staff to the “ongoing” implementation of a PeopleSoft procurement module.
What was most interesting about this particular example is that it indicates the rule, not the exception. Specifically, and I quote, “the vast majority of purchasing organizations are now in the software business as they attempt to adapt their practice to an application they would not have chosen to use in the first place.” The omission of involvement is a critical observation because most supply chain initiatives have their elemental roots in either an IT or ERP-centric finance department strategy.
Also telling is that the handful of successful programs has based their approach on a collaborative understanding of the processes that define their business model instead of seeking gains primarily through the advancement of technology. One such example is the Commonwealth of Virginia’s eVA initiative.
Use the link after this post to learn more about the Commonwealth’s program).
The one point I wanted to highlight regarding eVA is that the Commonwealth avoided the trap of the initiative becoming a software project. Commenting on the benefits of their avoidance of the mega-project syndrome, Virginia’s Director (eProcurement Bureau) Bob Sievert stated that “we were thereby able to shift the emphasis from an exercise in cost justification to one of process understanding and refinement.”
And it is this understanding of the processes that define the modern supply chain practice that has enabled COUPA to develop and successfully introduce an alternative to the traditionally onerous “solutions” offered as an adjunct to existing ERP platforms.
Why COUPA?
In assessing the viability of the COUPA value proposition, it will be up to you to determine how they (and their solution) may best serve your organization.
Returning to my 20-second rule referenced earlier in this post, the COUPA offering “provides the solution to deliver savings through an intuitive user interface that accurately reflects and therefore effectively adapts to the real-world requirements of its clients.” To be even more succinct, COUPA accurately reflects and effectively adapts to how users operate in the real world.
The Marine Science Institute (MSI) is a case in point. While the Case Study is yet to be available through COUPA, Dave provided me with an advanced release version pending their client’s approval. As such, I will only focus on a few key references that pertain to this post.
Established at the University of California in 1969, the Marine Science Institute ranks nationally and internationally as a leader in ocean research. The complexity of their purchasing environment is on a par with even the most demanding multi-national corporation, as the COUPA program was relied upon to procure supplies for MSI’s “more than 500 active research projects throughout the US and around the world.” Administering “$3 million in supplies and equipment annually,” COUPA’s On Demand solution, “enables MSI to provide its geographically dispersed users with hands-on access to a central system to place, receive, and track orders.”
The above excerpt from the MSI Case Study demonstrates that COUPA has perfected the balance between the centralized head office requirements for accountability and control while simultaneously meeting the operational needs of a largely decentralized purchasing team. And they were able to accomplish this within the framework of the emerging On-Demand or Software as a Service (SaaS) model. Ease and cost-effectiveness are definitely a winning combination in anyone’s books.
But again, do not take my word for it. Instead, take Dave up on his invitation to “see how it works” through the following link; www.coupa.com. And let me know what you think.
Web Resources:
Yes, Virginia! (Resource Library): https://procureinsights.wordpress.com/?s=Yes+Virginia
Dangerous Supply Chain Myths (Part 6): https://procureinsights.wordpress.com/2007/06/28/dangerous-supply-chain-myths-part-6/
Procurement Insights 
December 13th, 2022 → 8:45 pm
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