Daily Archives: August 17, 2010

What Will The New Brazilian Consumer Mean to Your Supply Chain?

In supply chain, we are continually talking about how the BRIC: Brazil, Russia, India, and China, are going to revolutionize our supply chain by substantially decreasing our costs and, thus, increasing the overall value the supply chain organization brings to the business. For the most part, it hasn’t happened yet (as management costs, tariffs, delays, and expedited shipping costs usually serve to eat up most of the projected savings), although many companies, who took their time and did it right, did see enough savings and enough improvements to make it worthwhile. The real opportunities are going to come when the middle class in these countries reaches a point where the market is just as lucrative, if not more lucrative, then our home markets. Just like Japan, with its focus on electronics, achieved a rapid transformation over the last few decades to become the second largest consumer economy in the world until it was overtaken by China this month, the BRIC is on track to create a new middle class larger than the current global middle class in the next 15 – 25 years.

And while much has been written about the China and India Opportunity (as the 2.5 Billion people the countries contain are expected to contribute another 500 Million to 750 Million people to the global middle class), I haven’t seen much written about Brazil, which is still very respectable in size with it’s 8.5 Million square kilometers and 192 Million people. Plus, it’s current middle class, which is approximately 25% of the population, already earn between $1,000 and $3,250 US, which is on par with what the average middle class income in India (which is as low as $3,000 to $5,000 US by some estimates) and most of China.

Brazil, like any other country, poses a distinct market. As per The Brazilian Consumer: Opportunities and Challenges, Brazilians favour quality over low price, status over indifference, and interaction vs. seclusion in their way of life. The companies that have successfully reached the emerging middle class to date have focussed on quality, distinction, small stores (in lieu of hyper-centers), and exclusive distribution networks — all of which will have an impact on your Brazilian supply chains. But will the emerging Brazilian consumer have any impact on your supply chains for those of you sourcing from, but not selling to, Brazil? Probably not. But if anyone has any differing opinions, I’d love to hear them!

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Has Coupa Settled on a Coupe? Part II

In our last post we discussed how, when Davie ran The Coupa Factory, their strategy was innovation focussed and they were constantly charging ahead in their efforts to bring Procurement Independence to the masses. However, lately, it seems that Coupa‘s strategy has shifted from “build a better platform and they will come” to “get the customer and then build them a better platform”. While not much of a change, it’s a change nonetheless and it appears to have affected their rate of innovation. Furthermore, it has been accompanied by a shift from groundbreaking new features to even flashier UIs, iPhone apps, and streamlined ERP integration. [Either that, or they’ve been celebrating all those new customer wins with The Coupa Drinking Song. ] While these features are important to the tactical buyer, they don’t add value to the strategic parts of the procurement process.

This isn’t to say that Coupa has stopped developing, or that some of their new features aren’t impressive, especially where the average buyer is concerned, but that their rate of innovation for the last year and a half just doesn’t compare to the Coupa of old. And while it is to be expected that the rate of innovation will drop as a company matures, if the rate drops too fast, the company risks going stagnant, and that would be troubling. However, what is really troublesome is that Coupa hit upon two areas in real need of innovation in their latest release, but appear to have completely missed the point on how to bring that desperately needed innovation to the masses (unless it’s still a work in progress, but why not go for the big win before anyone else beats you to the finish line?). However, that’s the subject of our next post.

For now, let’s review what they have accomplished in their latest release, as a few of the features are quite useful and still unique to the space.

Drag-and-Drop Expense Management

One of the developments Coupa seems quite proud of is the ability to snap a photo of a receipt with your iPhone, e-mail it to your Coupa account, log in to the system, bring up expense reporting, and then drag it to an expense category in an expense report. The receipt is immediately associated with the report and removed from your unprocessed receipt bucket.

Transaction Metadata for OLAP reporting

Coupa has added transaction metadata to each transaction that provides supervisors and CPOs the ability to roll up reports by chart of accounts, reporting hierarchy, and category. They’ve also added more fine grained security to insure that a user can only see spend within her visibility. (Note that they were calling this “data striping“, which, of course has nothing to do with OLAP reporting but data storage on physical mediums as it is the technique, used in RAID, of segmenting logically sequential data across different devices. So if you were confused, this is what they meant.)

Real-time Budget-Based Alerts

Not only does the application allow a user to keep on top of her budget, by way of it’s budget dashboard on the home screen (which is actually useful as most buyers don’t have a clue how much they are spending), but if a requisition puts a user over a certain percentage of her budget too early in the year, the application will alert the user, and the approver before it is approved. It will also let the approver know if the requisition would put the category or department budget over a dangerous (administrator configurable) threshold too early in the year.


iRequest is a bookmarklet (bookmark app) that allows the user to add a bookmark to their browser that will bring up a pop-up window that will let them request whatever item is on the page of the external site she is browsing. Not only does it make requesting an item on Amazon.com a breeze, but it eliminates the excuse for out-of-system requisitioning as every item can now be easily requested through the system.

Opt-in Benchmarking

With opt-in benchmarking, a customer can opt-in to sharing benchmarking data anonymously and see how it is performing on a standardized set of benchmarks relative to all of the other customers on the Coupa system. It’s interesting, and could be a powerful tool, but right now, it’s not very useful. More on this in our next post.

Supplier Ratings

With this feature, they’ve essentially added the ratings feature of Amazon.com which allows a buyer to rate the supplier with respect to each purchase, but since the ratings are optional, and since they’re not made against meaningful performance categories, the usefulness of this feature is rather limited.

All-in-all, some useful functionality that I’m sure will go far in convincing the average office manager to accept Coupa with open arms and joy in her heart, but not what Coupa could have delivered to totally knock your Procurement socks off. More on this in our next post.

To be concluded.

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