Monthly Archives: April 2007

It’s Coupa Time!

The Grunka Lunkas are still standing guard at the Coupa factory, so I have nothing significant to report yet … but I am told that the new enterprise version is almost ready and I will do everything I can to break the veil of secrecy as soon as possible.  On the bright side, I am told there are lots of cool new features to make you go “WOW”, so I’m betting it will be worth the wait.  In the meantime, if you’re daring, here’s a Coupa rap.

Apologies Jason (see “Why I’m Not a Poet”** on Spend Matters [WayBackMachine]), but I was dared* (sort-of).
(At least it’s not another oompa-loompa chant!
And hey, as Charles said on the Purchasing Certification Blog (now the Certitrek NLPA blog), it’s guaranteed that no one will ever confuse our blogs. )

(To the rap of “U Can’t Touch This” by MC Hammer.
Time to bring back those balloon pants!)

U-Can buy this!
U-Can buy this!
U-Can buy this!
U-Can buy this!

My, my, my, my Coupa hits you so hard
Makes you say Oh my Lord!
Thank you for blessing me
With an app that works so flawlessly
Feels good when you know you’re down
A superdope guru who slaps code down
And we’re known as such
And this is one app, uh, they can’t touch

I told you mister, they can’t touch this
Yeah, that’s how we codin’ and ya know,
U-Can buy this!
With a slick UI, U-Can buy this!
You know, let me bust the funky lyrics, U Can buy this!

Cool new app features
Built to satisfy all sorts of creatures
Knock you out of your seat
New tagging feature that can’t be beat
Grab your arm-rests, hold on
With order tracking features, your order’s never gone
Like this, Like that
Coupa’s on a mission, better fall back
Tell the world that we’re too much
And this is one app, uh, they can’t touch

Yo, I told you, they can’t touch this
Why you standing there man, ’cause U-Can buy this
Yo, sound the bell, school is in, sucker, U-Can buy this

It can link to your system
Punch-out power is what we’re giving ’em
Can’t negate
The only word is Coupa when you’re buying cor-por-ate
It’s hype and tight
With Ruby on Rails, system needs are slight
Now it’s time to learn
What it’s gonna take in the nought’s to burn
The hits legit
They can’t top us, they might as well quit

It’s all because you know
They can’t touch this … but …
U-Can buy this
Break it down!
Stop! Coupa time!

Go with the flow is what they say
Time to get with Coupa, stop livin’ in yesterday
Purchase at the speed of light
No-click Coupa buys will get your order right
This is it, it’s a winner
Get with this, make your processes thinner
Now move, click that mouse
Just takes a minute for you to not get loused

Yeah, yeah, yeah, yeah, they can’t touch this
But man, U-Can buy this
You’ll probably get hype boy,
‘Cause you know U can, U can buy this
Ring the bell, schools’ back in, buy it now!
Stop! Coupa time!

U-Can buy this
U-Can buy this
U-Can buy this
Buy it now!
Stop! Coupa time!

Every time you see it, the app just gets slicker
It’s dope on the net and service doesn’t flicker
Now why would we ever stop coding it
With others makin’ products that just don’t hit
I toured around the world from London to the Bay
It’s Coupa – Go Coupa – OS Coupa – Yo Coupa
and the rest can go and play

U-Can buy this
U-Can buy this
U-Can buy this
Yeah, U-Can buy this
I told you, U-Can buy this
Too hype, U-Can buy this
Get on outta here, U can buy this!

* Not by Coupa, who, to the best of my knowledge, had no prior knowledge of this post.

** All posts prior to 2012 were removed in the Spend Matters site refresh in June, 2023.

The Supply Chain Finance Movement

Last fall I introduced Supply Chain Finance (SCF) to this blog and noted that a supply chain finance solution is a combination of trade financing provided by a financial institution, a third-party vendor, or an enterprise itself, and a technology platform that unites the trading partners and the financial institution electronically and provides the financing triggers based on the occurrence of one or several supply chain events. Then, I started the year off with a review of an article from the Supply Chain Manufacturing Review on Managing the Financial Supply Chain.

The article noted that today’s supply chains complicate financial flows and cash management and leverage global supply chain visibility to control and optimize the financial flows of a business value chain which is essential for the long-term viability of companies that have outsourced manufacturing or are sourcing globally. It also noted that global outsourcing complicates the value exchange process, increasing the quantity, velocity, and complexity of inter-enterprise financial transactions while decreasing the number of financial transactions handled within the four walls of the enterprise and reducing the visibility into the timing of payments while introducing a higher degree of risk.

As a result, the article concluded that it is vitally important, particularly from the financial perspective, to analyze all of the costs associated with an outsourcing decision before committing to a contract and that you should consider strategies to lower your suppliers’ financing costs, and thus your overall total cost of ownership. These strategies include:

  • early payment programs
  • inventory ownership solutions
  • virtual consignment financing with assignment of proceeds

But strategies are not the only thing you can use to tackle your supply chain finance woes. These days, technology also exists to support you in your decision making process. For example, as announced mid-march in Supply and Demand Executive, PrimeRevenue has just released a new version of its SCF Platform, which offers new functionality related to payment offset information flows critical to retail, diversified manufacturing, high-tech and automotive markets.

PrimeRevenue offers an online payables visibility solution that allows a buying organization to upload electronic output from its Accounts Payable (AP) system with approved payables data and a supplier to log in and view the amount and payment maturity date for each of the approved receivables. The Supplier can then sell the receivables early at a discount and receive cash for any, or all, of these receivables at any point in time (up to the maturity date). The solution allows payment cycles to be reduced to as little as 48 hours in an automated, secure service that runs over a virtual private network (VPN). Essentially, it’s a simple type of Electronic Invoice Presentment and Payment (EIPP) system, but one that allows the supplier to choose when they get paid, and one that achieves the early payment programs option for a supply chain finance solution. (Other companies in the EIPP space include Avolent acquired by Genpact, Thermo Fisher Acquirex, Bottomline Technologies, Harbor Payments, and Osiris Innovations Group.) It’s not the most sophisticated solution that one could devise, but this type of solution could be a great start for companies without any supply chain finance solution. I’m sure we’ll be hearing more about PrimeRevenue and other companies in the EIPP space as the year progresses, especially since a Demica study just found that 73% of large corporates are looking to extend payment terms with their suppliers in 2007.

The e-MarketPlace Future

Chief Procurement Officers are being asked to deliver even more. Organizations are seeking procurement-based savings to offset some of the impact caused by an economic slowdown. At the same time, globalization, decentralization, and merger and acquisition activity have made it more difficult to implement best practice standards and create a common information infrastructure for sourcing and procurement.

To further complicate matters, it is unclear how quickly or completely B2B eCommerce platforms will be able to deliver the benefits many companies thought were imminent.

This quote is from “A Case for eSourcing: The Strategic Side of Procurement”, a 2003 Supply Chain Perspective from Accenture. Reading the recent article “What future for e-Marketplaces” over on European Leaders, a topic discussed recently by JP Massin in his recent posts “Why industry-led eMarketplaces failed” and “What future for e-Marketplaces” on Strategic Sourcing Europe [WayBackMachine], I am inclined to agree with Alain Andreoli on the surface, and with JP Massin in one of the details, but still think something is missing in both analyses.

In Alain Andreoli’s view, summarized in the article, in order for B2B to take off, consolidation, which takes the market down to two or three global supplier networks, is required. Apparently, businesses are waiting for that three letter household name that they’ll never get fired for selecting. Furthermore, those providers must increase the network supply base (mass on-boarding) and roll-out value-added services.

According to JP Massin, e-B2B applications are not yet mature enough. A key yet-to-be invented capability is missing. Furthermore, the cost and lead time of deployment, the lack of interoperability of current marketplaces, and the lack of proven reliability is holding current marketplaces back. Not to mention the fact that the applications need to be user-centric, and not process centric like current instantiations.

Basically, it all comes down to value … and right now, the marketplaces don’t really have the value. From a supplier’s viewpoint integration isn’t easy, there’s no cross platform standard, not a lot of buyers, and no guarantee that a buyer will even use the platform. From a buyer’s viewpoint, the platforms are not always easy to use, there’s no integration to their e-Sourcing or e-Procurement application, and a limited supply base. From both viewpoints, there’s no obvious financial incentive or other reason to use the system.

Value is going to require, as Alain points out, a large user base, which will likely mean consolidation within verticals to a handful of primary marketplaces and user-centricity, as JP-Massin points out, but it’s also going to require community and standards. It has to be easy to integrate into from a suppliers viewpoint, but, more importantly, it has to be easy to integrate into from an e-Sourcing and e-Procurement provider’s viewpoint, since buyers are going to want to tap into it using the tools and interfaces they already use. And it has to offer community – so people feel like they are part of a network. Then e-MarketPlaces might take off.

Supplier Performance Management Webinar

Hopefully after reading yesterday’s post which pointed out that only 49% of organizations have bothered to implement a supplier performance measurement and risk management program, you’ll want to do something about it. If you do, you might want to take advantage of Procuri’s [acquired by Ariba, acquired by SAP] well-timed webinar on Jumpstarting a Supplier Performance Management Program. Moderated by Tim Minahan, editor of Supply Excellence [WayBackMachine], the featured speakers include Chris Herbtst, Supply Chain Program Manager of Constellation Brands, and Dawn Tiura, Partner at Denali Consulting.

According to the messaging, this webinar will cover:

  • How to organize for effective supplier performance management
  • The right supplier performance metrics for cross-company measurement
  • How to assess and select the right solutions to help your company achieve its supplier performance measurement and improvement goals
  • Sure-fire approaches to speed performance management program system deployment and adoption

All very important topics.

You’re Losing Money on Your Invoices

Those who follow Aberdeen Research will realize that there are three levels of publication frenzy: ( a) end-of-the-month, ( b) end-of-the-quarter, and ( c) end-of-the-year. Well, end-of-the-quarter just passed, and a slew of new reports just hit the Aberdeen website. In addition to the “Supplier Performance and Risk Management Benchmark” that was the subject of yesterday’s post, the “E-Payables Benchmark Report” also hit the e-waves this week.

The report found that Best-in-Class enterprises that utilize automation to drive performance report the following advantages:

  • 91% lower invoice-processing costs
    ($1.50 to $2.00 compared to $10.54 for industry average and $58.09 for laggard)
  • 46% shorter process cycle time
  • 12% fewer late payments
  • 30% less time responding to inquiries

The report also gives some advice to organizations that want to become Best-in-Class. These recommendations include:

  • Moving toward a fully automated environment that integrates A/P with existing procurement and financial systems
  • Establish a linkage between your A/P goals and objectives and the broader goals of the finance and procurement groups
  • Develop disbursement strategies in concert with your treasury and finance teams that seek to optimize working capital
  • Leverage data visibility to drive performance improvement across the enterprise
  • Increase collaboration with IT to assist in the development of a portfolio strategy to best manage an array of electronic receipt and payment methods

These recommendations are important because over 60% of enterprise lack visibility into the primary A/P spend and invoice data and paper invoices cost 74% to 89% more to process than electronic invoices. This lack of visibility cascades into lost opportunities across the enterprise, including treasury, procurement, and supplier management. Treasury is unable to make optimal working capital decisions, procurement is unable to identify opportunities for leverage, and supplier management is unable to even answer the simple question “have you received my invoice?”.

The sad thing is that getting to best-in-class is not very hard, especially compared to risk management or strategic sourcing. The enabling technologies are straight-forward, have existed for a while now, and include:

  • E-Invoicing
  • Document Scanning, Workflow, and Management
  • Spend Analytics for Invoices and Compliance
  • Reporting Capabilities
  • Invoice Dashboards
  • Payment Networks

Moreover, Aberdeen lays out a straight-forward e-payable framework to follow. The framework is a four-part solution that progresses from receipt through approval and inquiry to validation and reconciliation, and finally to settlement. After all, in addition to significantly lower invoicing costs, A/P automation also allows for improved resource productivity, stronger controls, fewer errors, better payment performance, reduced cycle times, and improved visibility into spend. This is another report I’d make time for if you’re not best-in-class already.