Coupa + Trade Extensions = ??? … Part II

Back in May, the doctor indicated that at some point after Inspire he’d do a deep dive into the acquisition of Trade Extensions by Coupa. He waited as he wanted to think more on the possibilities and probabilities and get more insight into the potential, but as no additional insight appears to be coming in the short term, in our last post we began to summarize where things are at now from the perspective of a SWOT analysis. Yesterday we outlined some of the key strengths and weaknesses of both platforms. Today we will dive into some of the key opportunities and threats.

Coupa + Trade Extension Opportunities

  • Quick deployment anywhere due to pure SaaS nature
  • The great UX offered by both platforms is extremely attractive
  • Both are true market leaders in what they do
  • Both are deployed, supported, and used, globally
  • The Open Business Network can feed new suppliers and quotes into both platforms
  • All spend can be appropriately placed under management
  • Easy analysis of all spend and spend data can be accomplished between the platforms
  • Collectively, each key step of the full Source-to-Pay platform is supported
  • A large amount of educational content on both fronts that can form the foundation for end-to-end Source-to-Pay education

Coupa + Trade Extension Threats

  • Not the only Source-to-Pay offering
    Jaggaer has better CLM & SXM
    Ivalua is one platform
  • Weak CLM and no contract analytics leaves an opening for competitors
  • Weak SPM and no best-of-breed SRM leaves another opening for competitors
  • Out-of-the-Box integrations with on-site systems is limited
    and a great web API is often only great for cloud-based solutions
  • No end-to-end category guidance and management
  • No category templates for common categories for strategic sourcing or group-purchase Tail Spend sourcing
  • The platforms do not integrate and may not for some time …
    while sourcing always precedes procurement, awards need to get from sourcing to procurement and spending needs to be monitored and analyzed against spend and logistics may need to be optimized mid-contract if demands change or factory allocations shift
  • No end-to-end education on how to master S2P to not only maximize SUM but maximize savings and value

    … but most importantly …

  • No clear direction on how the two platforms will be integrated to increase the net value of both.
    Considering there has not yet been a truly successful acquisition of a strategic sourcing optimization platform (where both the acquirer and the acquiree’s platform have thrived), this is a major threat … and worry.
  • The two companies don’t speak the same language. Not even close.

At the end of the day, as we have indicated before, there is a huge potential for both companies and all of their collective customers, but, hiding in the shadows, there is also the potential for catastrophic failure. (This was one of the priciest acquisitions of a best-of-breed platform in optimization history, and Coupa could have done a lot with the money it spent.) The jury is still out, but to be honest, the longer it takes for a clear direction to materialize, the more one naturally starts to worry.