Monthly Archives: July 2012
Robbie and the Coupa Factory
Oompa Loompa Doom-pa-dee-do
We’re still building great products for you!
Oompa Loompa Doom-pa-dah-dee
If you are wise you’ll try it for free.
What do you get when you get lots of cash?
Filling coffers and enlarging the stash?
Teams of developers coding like mad!
Making the app work on your iPad.
You’ll like the look of that!
It’s been a long time since Davie ran the Coupa Factory, and while there may have been a number of notable changes in management, one thing hasn’t changed at Coupa — and that’s the original product direction (and the heart of the development team*). Coupa’s goal is still to make the best P2P platform out there that’s so easy to use that even your grandmother and three-year old can use it and get all your spend under management (SUM).
In terms of progress since our last major review of the platform in 2009, which focussed on QuickStart, there has been a flurry of development — of a very interesting sorts. Having built one of the richest web-based P2P platforms on the market in three short years (with everything capable of being custom configured by an administrative user), Coupa made a very important realization — 90% of P2P is simple, straightforward, and limited in terms of required functionality. Find what you need, put in a requisition, get approval, cut the PO to the vendor, accept delivery, accept the invoice, queue it for verification and approval, issue the goods receipt, and make payment within the agreed upon timeframe when the invoice has been verified and the goods accepted. There’s not a lot of inventory management, logistics, payment structuring, etc. in an average corporate purchase made by an end-user outside of the Supply Management organization.
What there is, in fact, is a lot of bypassing of e-Procurement systems that make the process of getting your printer, paper, or widget for your production line more troublesome than going to the Best Buy website, the Office Depot website, or just calling up the supplier and asking for another shipment. So, if you want widespread adoption, which is the key to maximizing your SUM (Spend Under Management), you have to make it at least as easy to use as Amazon. Whether you’re using vendor catalog, punch-out, cXML, or an in-house catalog, searching, shopping, and requisitioning is seamlessly integrated. And it’s all accessible through their new Super Search Bar that seamlessly integrates Google search for what you need, Amazon browse by category, and free-form item/service search (which also allows product/service retrieval through internal or vendor product/service numbers) which can be global, by commodity, category, or vendor — depending on your configuration. Plus, their new dynamic shopping cart, which integrates accounting and budgeting data (so you know against what budget item a requisition will be charged, how much is left on the budget item, and how much will be left when the requisition is approved the minute you add an item to the cat), allows for split-billing and overrides in the cart in a process that is as easy as Amazon’s “one-click” checkout. And, policies can be linked to each item and service that allow for additional information within a search to be “popped-up” so the user can get full information (which can include budgetary and billing information) before an item is even added to the cart. Supplier taxes can be imported and validated against your own tax tables, fending off future nightmares for finance down the road. And when all is said and done, payments can be recorded and integrated with you ERP (and Coupa now supports out-of-the-box integrations with a couple of dozen major ERP and e-Procurement platforms).
Upon checkout, the system will automatically create the necessary requisitions (which will be sent to each individual who needs to approve an item in your master requisition), and, upon approval, the necessary POs for each vendor will be automatically generated and delivered — and all are easily accessible from your order history page with a single click.
The other big developments since our last major review are their Expense Management Solution, which was still in its infancy, and their new Spend Optimizer Solution, which could more accurately called a 360° Spend Visibility solution (which you can use as a starting point in spend analysis and spend optimization). Their Expense Management application is a great way to get your T&E under control (as iPhone integration allows expense reports to be automatically generated by users who simply have to take a picture of their receipt and import it into the application). They’ve taken usability to a new level with this one.
Spend Optimizer is their mega-dashboard reporting solution that is completely configurable and allows for the creation of just about any spend report you can dream up. Done right, you can have it display off-contract spend; late payments; budget overruns; high-spend categories, commodities, and vendors; and other spend hot-spots that could get you or your organization into hot-water down the road if not proactively managed by exception. It’s still a dashboard (which can be dangerous and dysfunctional), but you have the option to see green, see red, or see where the black holes are. It’s this last capability that makes the real difference between useless reporting tool and powerful spend miner, because, generally speaking, off-contract is where the trouble starts.
And brand-spanking new functionality is lined-up for fourth quarter. Their recent announcement that 9.635 Billion has passed through their platform is impressive, but when they pull off their next round of application development, that will be more so. Coupa is still a company to watch, so don’t take your eyes off them for too long.
Oompa Loompa Doom-pa-dee-do
They’re still building great products for you!
Oompa Loompa Doom-pa-dee-dar
They have the goal to take your spend far.
* Dave and Noah may be gone, but David Williams is still there as VP Technology, overseeing day to day development.
There’s Sugar Indices. There’s Steel Indices. Where’s the Exuberance Index?
According to this very interesting article in The Sacramento Bee, the Global Economy [is] in Worst Shape Since 2009. Noting that six of the seventeen countries that use the Euro are in recession [including Spain, where protesters are pretending to be V], that the U.S. economy is struggling [yet again], and that the economic superstars of the developing world (namely, the BIC) are in no position to come to the rescue — since they are struggling too, the article claims that this crisis is knocking at all our doors.
But the reality is that crisis, while coming, will not occur until the world accepts it. Economies no longer follow GDP and growth, they follow market exuberance — the kind where housing prices double, where billions are made on junk bonds and collateralized debt obligations, and companies with zero sales get 100 Million valuations, and then go public with massive debt for no apparent logical reason. And it’s not the economic exuberance measured by CERES last year in their Index of Economic Exuberance where they tried to measure what’s been happening to whom since the financial crisis of 2008. (In this one-shot analysis, CERES developed a metric to measure whether a country’s macroeconomic performance is stronger or weaker relative to the prevailing performance prior to the advent of the global financial crisis in 2007 using output, unemployment, domestic demand, bank credit, inflation, and the real exchange rate.)
As long as markets are trending up, investment money flows freely. As long as investment money flows, people keep borrowing. As long as people keep borrowing, they keep spending. And as long as they keep spending, the economy goes up, even if production is falling, unemployment is high, and the cost of living is skyrocketing. And if the feds keep pumping money into the economy, the press keeps painting a rosy picture, and corporations take efforts to keep prices down, the economy can keep chugging along at an upward pace for months, and in the past, even a year or two, after everything should come crashing down. (The Zeroes proved that!)
Robert J. Shiller tried to capture the underpinnings of this phenomenon in his book, Irrational Exuberance, first published in 2000, and then revised in 2006, but even behavioural economics, in its current state, can’t capture the absurdity of what drives today’s market-driven economies.
But a technology may be near at hand. In the marketing domain, we have a new technology called sentiment analysis which uses NLP (natural language processing), CL (computational linguistics), and text analytics to identify and extract subjective information in source materials. Enabled by technologies such as the AlchemyAPI, which attempt to identify positive or negative sentiment within any block of text, the goal of sentiment analysis is to determine the attitude and tone of a document.
If we could apply such technology to all market analysis and market sentiments from investors, media, and influential self-publishers (journalists, analysts, and bloggers), it might be possible to see how the markets are moving and detect not only exuberance, but irrational exuberance. This is not as far fetched as it seems. As per an article in the MIT Technology Review in late 2010, the (gasp!) Twitter Mood Predicts the Stock Market (and since stock markets are among the primary drivers of economies, it’s a great start). According to the article, research conducted by Johan Bollen and colleagues determined, with an analysis of almost 10 Million Tweets from 2008 on, that stock market movements could be predicted with this data up to 6 days in advance! (Using a calmness index, they found an accuracy of 87.6% in predicting the daily up and down changes in the closing values of the Dow Jones Industrial Average. That’s a success ratio that will make your average trader blush!)
Twitter data alone would not be enough, but as we are better able to harness distributed computing power and the limits of Big Data approach the realms where even Chess becomes a solvable problem, analyzing all market related data for a day will become possible, and maybe we will be able to create an exuberance index and get a better grip on when a recession, even if overdue, will be upon us. (And then, as Supply Managers, determine the best times to sign contracts, lock in prices, and guarantee supply.)
New Trend! Globalization!
Today’s post is from Dick Locke, Sourcing Innovation’s resident expert on International Sourcing and Procurement.
Over at a blog called pool4tool the company (apparently an Austrian company with large clients) alerts its readers of opportunities in globalizing. It also talks of the breakthrough concept of Total Cost of Ownership and holds Boeing’s outsourcing of Dreamliner design and construction as a success story. Strange alternate universe over there in Austria.
Film at 11.
Rant on, Dick, Rant on!
We Need More Corporate Ethics – Bring on the No-Maximum Mega Fines!
As noted in a recent article on Fine and Punishment, it has been a bumper summer for corporate fines and settlements. With firms in Britain and America agreeing to pay over 10 Billion in the past three months alone, there’s too much corporate wrong-doing these days. But the current fines are not enough. For example, a mere 5K for violating 10+2 is a CEO’s lunch money these days in most Global 3000’s. The only act close to defining a fine that will take a real chunk out of the corporate coffers of the guilty that the doctor knows of is the National Defense Authorization Act (NDAA) which allows 15 Million Dollar fines for first offenses and 30 Million Dollar fines for second offenses.
The reality is that a fine is only a deterrent if getting caught would mean a loss. Let’s say the fine for stock-fixing is 1 Million but an investor group could make 10 Million on the fix. Guess what’s going to happen? The stock is going to get fixed if the investor group has anything to do about it because, worst case, they only make 9 Million. The fine HAS to outweigh the reward, or corporate wrongdoing is going to continue to permeate both the financial sector, and the supply chain practices in industries where unlicensed knock-offs (especially in pharmaceuticals or electronics) can save a middle-man millions of dollars and push profits through the roof. As the Economist article stakes, given a risk-free opportunity to mis-sell a product, or form a cartel executives will grab it. To them, it’s all about the almighty dollar — and earning more than their peers to earn Wall Street’s favour and have something to boast about at the next charity dinner. (For a great Wall Street Perspective, you have to check out Randall Lane‘s The Zeroes: My Misadventures in the Decade Wall Street Went Insane [now at a bargain price for the hardcover edition on Amazon.com — you can’t go wrong]. Audiobook also available).
Unless the potential fines are crippling, wrong-doing will persist*, and so will cheapening out. And this is the biggest problem. Right now, we need sustainability in supply management, but initial investment in sustainability always costs more, so not only are executives not going to green light sustainable efforts, but if the organization has to look green or socially responsible, they are going to fund the lowest-cost “accredited” third parties that they can find to be “socially responsible”, and, in particular, likely fund those that use shady practices and cut corners everywhere possible. Because when the dollar rules, as long as you can buy the image, why create the real thing?
But if we force ethics back into the corporate world, then maybe we can force sustainability in as well. And when the only choice for gains is again long-term strategy, which is precisely where the economics of sustainability really make sense, maybe we’ll see improvement in ethics and corporate responsibility across the board. Or maybe it’s a pipe-dream. Either way, heftier fines would be a great start!
After all, remember what Randall Lane discovered when he did a Trader Monthly survey in the zeroes:
If you received an illegal insider tip, a sure thing, and had a 50% chance of getting busted, would you use it? Only 7% would. What about only a 10% chance of getting caught? The numbers spiked to 28%. And what if you had a 0% chance of getting discovered? Suddenly, the number surged to 58%! To the majority of our readers, cheating wasn’t an ethical issue, it was simply a matter of whether they’d get caught.