Seventy Five Years Ago Today, The US Department of Justice Took on the Studio System …

… charging violations of the Sherman AntiTrust Act and, ten years later, won! It was a historic suit, and one we have not seen the likes of in years. In order for progress to be made, the US DoJ needs to take down the MPAA and the RIAA, or at least their lobbying arms which continually attempt to introduce acts like the the DMCA, the new Performance Rights Act, and California Senate Bill 550 which allows law enforcement to enter optical-disc plants and seize disc-stamping equipment without a court warrant. Every year the MPAA and RIAA claims of what is required for artistic creativity and expression and IP protection get more and more absurd to the point where they will soon be demanding bills like Florida HB 155 which make any computer and smartphone capable of accessing the internet illegal!

We need to end their existence now before they put an end to innovation permanently! Otherwise, we’ll be lamenting a dark and dreary future where corporations rule the world and we are all slaves to the corporate machine. (In other words, Continuum will become an accurate documentary of our future.)

It’s 24/7 for Robbie and the Coupa Factory, Part II

In Part I we announced that Coupa has been coding up a storm since we last checked in on them last summer (in Robbie and the Coupa Factory), completing Release 9 with major enhancements in expense management, invoice management, and catalog management; the android app; and the first version of their new sourcing module as well as some major improvements to their cart that will show up in release 10 later this quarter. Today, we will discuss the major improvements in Release 9 around expense management, invoicing, and catalog management.

The major changes in Expense Management focus around rapid entry and ease-of-use. Designed to work with their Mobile Expense Reporting app for iOS and Android, the goal is to make it as easy as possible for a user to:

  • capture their expenses with easy line item entry,
  • submit their expenses into the system with one button submit,
  • get a scanned copy of their receipt into the system by a single click with the smart phone camera, and
  • get an approval, rejection, or hold for further information by an approver who can also approve, reject, or hold on the go.

In addition, the expense module makes it easy for an approver to:

  • see expenses by day as the system can automatically itemize multi-day expenses like hotel bills and compute the average cost per day,
  • see expenses against budgets and benchmarks to see if a user is spending more or less than the company budget and/or industry average, and
  • stop fraud in its tracks as the expense report audit feature automatically detects missing receipts and/or line items, expenses over category maximums, expense similarity across expense reports, and audit score history.

Catalog Management has also been improved as well, with a big focus on usability and flexibility, with the most significant improvements in the free-form request capability. The reality is that no matter how many vendor catalogs you integrate with, you’re never going to be able to buy everything out of a catalog. Temporary labour, event catering, moving services, etc. just aren’t in your Staples or CDW punch-out. However, you still need to get all external spend flowing through the e-Procurement solution if you ever hope to get that Spend Under Management, widen the funnel, and increase the contribution you make Straight to the Bottom Line.

If the service, or product, you need is not in the catalog, it’s easy to create a requisition and route it to the appropriate manager for approval. All a user needs to do is define the product or service required (using a free-form description if necessary) and any additional information that is known, such as price (range), need by date, (preferred) payment terms, (preferred) supplier(s), etc. and the request is routed to the appropriate approver in the appropriate department, and, if necessary, up the approval chain. In addition, if a match is made on the free form text, the product or service recommendations are automatically displayed. Also, Coupa has built in the ability to do dynamic real-time comparisons on multiple items brought up during a search. A user just has to select / de-select the products or services of interest and they are compared, in a grid-like manner, on all attributes defined for the product or service of interest.

This takes us to invoicing, which is where the most significant improvements to the existing platform occurred. Coupa has also realized that e-Procurement doesn’t deliver savings unless the end-to-end Procurement cycle is automated. In Procurement, a significant amount of the time is spent entering, reconciling, and approving invoices. Savings come from automating the entry, reconciliation, and approval of invoices that match purchase orders which have been appropriately approved. So, in addition to the XML and EDI submission options, the Coupa Supplier Network, and the ability to send scanned invoices through 3rd party OCR networks, Coupa has created a new tab-based quick entry invoice module that can be used by supplier AR clerks and buyer AP clerks to quickly create an invoice using the tab-based entry system that finance people are accustomed to. Plus, the system supports full invoice matching and exception handling at the line item level. If something doesn’t match, an exception is generated and an alert is displayed to the appropriate approver who can review the alert, and depending on the nature of the exception, either approve (if it was an approved cost increase), send it back for more information (if a new item appears), or reject it (if the quantities, etc. don’t match). As per our recent piece on Points to Ponder when People are Pushing Off Procurement Platforms, it has to be automated, it has to be usable, and it has to work. And it does.

Come back Monday for our next post where we’ll cover the new Sourcing Module, which is the most significant new addition to the Coupa platform in a number of years.

It’s 24/7 for Robbie and the Coupa Factory, Part I

Since we last checked in on Robbie and the Coupa Factory last summer, the Coupa Oompa-Loompas have been coding up a storm developing Release Nine, in full deployment, and the upcoming Release Ten, to be released in Q4. Even though it’s been almost four years since we had Davie and the Coupa Factory and seven years since we had Procurement Independence, the Oompa-Loompas are coding like they’re still a start-up trying to build a product to take on the big guys, even though they’re already there with over 350 customers that do business in 17 languages, 40 countries, and 150 currencies with over 650,000 suppliers. It’s time to update the song (which first appeared in Davie and the Coupa Factory)!

Oompa Loompa Doom-pa-de-do
We can’t stop building 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 have lots of cash?
Filling coffers and enlarging the stash?
Teams of developers who never sleep.
Making the app work on Android’s heap.

For accessibility.

Oompa Loompa Doom-pa-dee-dar
If you are willing, you will go far
You will live in happiness too
Like the Oompa Loompa Doom-pa-dee-do

Oompa Loompa Doom-pa-de-do
We’re at release nine but we can not stop.
Oompa Loompa Doom-pa-dah-dock
Coding improvements around the clock.

Rapid expenses, enforced policies.
Frictionless invoices, support for AP.
Enhanced catalogs, a universal cart.
Taking Procurement to state of the art.

As we make your process smart.

Oompa Loompa Doom-pa-de-dart
But here at Coupa, that’s just the start.
Now you will source in happiness too.
Like the Oompa-Loompa doom-pa-dee-do

Oompa Loompa Doom-pa-de-do
We now have new e-Sourcing for you.
Oompa Loompa Doom-pa-de-door
It’s integrated, savings will soar.

We’re Source to Procure, and Procure to Source.
We’re true end-to-end, ’cause we stay the course.
To get all your spend managed for you.
Is the goal of the Oompa Loompa too.

Oompa Loompa Doom-pa-de-do
We can’t stop bulding products for you!
Oompa Loompa Doom-pa-dah-dee
If you are wise you’ll try it for free.

Just like the original, this is to the tune of the Oompa Loompa chant, as first heard in Willie Wonka & the Chocolate Factory.

Come back tomorrow for a deep(er) foray into Release 9!

It Took 40 Years, but BPOs (Bank Payment Obligations) are now Truly SWIFT!

SWIFT, formerly known as the Society for Worldwide Interbank Financial Telecommunications, and a global provider of secure financial messaging services, turned 40 on May 3 of this year, and that’s noteworthy on it’s own as this tells us that we’ve only been thinking about electronic financial transactions on a global scale for 40 years, but that’s not the most important piece of news to come out of SWIFT, which processes 90% of traditional global trade transactions, this year.

The most significant piece of news to come out of SWIFT this year, and this decade, is the fact two weeks later on May 17, two months ago, the electronic Bank Payment Obligation (BPO) for an open account transaction became an official financial instrument under the International Chamber of Commerce’s (ICC) Uniform Rules for Bank payment Obligation (URBPO). The URBPO, which is an element in the electronic matching of open account trade data, and which utilizes the ISO 20022 messaging standards, provides an irrevocable payment guarantee in an automated environment and enables banks to offer flexible risk mitigation and financing services across the supply chain to their corporate customers.

As defined by the U.S. Department of Commerce’s International Trade Administration in their Trade Finance Guide, an open account transaction, which is the preferred transaction type by most North American and European multi-nationals, is a sale where the goods are shipped and delivered before payment is due. This option, which is often the most advantageous to the importing buyer, is often the most disadvantageous to the exporting supplier, as they will have difficulty getting financing from their bank to finance the production and shipment of the goods until they are paid by the buyer without proof that they will be paid. That’s why many suppliers will insist on a Letter of Creditworthiness from the buyer’s bank, which will often need to be provided direct to the supplier’s bank. This paperwork takes time, especially since it has to flow through banks, slows down trade, and aggravates buyers who need to move fast to keep up with constantly changing customer demand. That’s why they insist on open accounts, even though the supplier’s bank may not accept them because the buyer, or the buyer’s bank, isn’t known (well enough) to the supplier’s bank, which is fair.

This is a situation that, theoretically, could be easily corrected with an electronic replacement for a letter of credit, that could move at the speed of light down a fiber cable, as the buyer’s bank, which can see the buyer’s ability to pay, can immediately send the supplier’s bank an electronic Bank Payment Obligation that the bank will pay when the goods are shipped and adequate proof has been provided. The supplier’s bank could then advance the supplier as it has a trustworthy bank obligation, and not just a copy of a purchase order (PO), from the buyer’s bank that it can rely on. And now that we have the ICC URBPO, this is finally a reality. And if you’re a multi-national, it’s a reality that’s at your fingertips!

All that is required to create a BPO is a purchase order and an acceptance by the supplier. All that is required to complete the BPO is a commercial invoice and acceptance by the buyer. No other documents are required.

The process is as follows, provided the buyer has an open account with a bank on the SWIFT network that is, or soon will be, URBPO enabled:

  • the buyer sends their PO to their bank and requests a BPO be sent to the supplier’s bank
  • the buyer’s bank delivers the BPO through the TSU (Trade Services Utility) operated by SWIFT to the supplier’s bank
  • the supplier’s bank delivers the PO to the supplier
  • the supplier accepts the PO and sends confirmation to their bank
  • the supplier’s bank delivers the confirmation to the buyer’s bank

and, voila, a valid BPO, which is irrevocable once all conditions are met, has been created. Once the terms of the PO have been completed in full,

  • the supplier informs their bank and provides the commercial invoice
  • the supplier’s bank informs the buyer’s bank that the terms have been completed
  • the buyer’s bank asks for confirmation from the buyer
  • the buyer confirms completion

and the supplier is paid! It’s that easy.

Since only banks have access to the TSU, it’s likely that you’ll probably still have to use e-paper to communicate with your bank if you’re a small or mid-size operation, but if you’re a large multi-national, you can work with an approved vendor (of which there are at least 6 and more in the process of being certified) to integrate your finance system into the bank’s SWIFT system and if you have an open account with the right permissions, automatically create BPOs within your transaction limit (and seamlessly submit requests for approval and conveyance with the click of a mouse), just as easy as you can do ACH payments and wires today with advanced business banking solutions from the major banks.

Of course, it goes without saying that you have to be a client of either the 6 banks that are currently live, the 10 banks that have implemented the capability and that are in the process of implementing their big clients, or the 50 banks that are adding the capability, but if you’re not, and you’re a major player in international trade, maybe you should be! e-Invoicing was e-Procurement 1.0. e-Payment was e-Procurement 2.0. But e-BPO/TSU is e-Procurement 3.0, and if you want to get to the next level, you have to get there.

Trade Extensions: Still No Rest for the Wickedly Powerful

In our last posts on Trade Extensions (No Rest for the Wicked-ly Powerful, Part I and Part II), we talked about how Trade Extensions (TE) added real-time decision optimization auctions, award management (that allowed a user to fix the award for part of a scenario and re-run a smaller model for what-if), built-in OLAP reporting, and supplier feedback mechanisms to their platform to increase the power, usability, and friendliness of their platform. Since then, as per our recent post on Optimization: Is it Time to Move Beyond Sourcing, Trade Extensions has been toiling away to increase the power, flexibility, and usability of their platform to take it beyond sourcing.

Trade Extensions has made significant improvements in the following three areas:

More Powerful Fact Sheets

Back in Trade Extensions Trades Up to a Fact Sheet User Interface, we talked about how Trade Extensions had built the capability for the end user to provide data in d-dimensional fact sheets, which include 2-dimensional spreadsheets and 3-dimensional workbooks, in order to allow the user to define models in a familiar format. Fact sheets could be used to define any model data element in simple row-column data format. In addition, a user could define certain values as simple formulas on other values in the sheet. Since their initial introduction three years ago, Trade Extensions has extended the capability to allow users to define more complex models with more complex formulas that can reference not only values, but formulas, and values and formulas in other fact sheets. Models can get as complex as they need to, and this is the foundation that allows Trade Extensions to define models that go beyond sourcing.

Formula Analyzer

The more complex the models get, the harder it is to pin down why they aren’t quite doing what you think they are supposed to be doing, why they are taking so long to solve, or what is driving the sensitivity. That’s why Trade Extensions built a formula analyzer that allows a user to analyze a formula and see how it is defined, how long it is taking to calculate with respect to the other formulas in the model, and what is affected by the formulas or changes to the formula. In addition, if they exist, it can suggest formula modifications that would allow the model to solve faster. However, just knowing where the problem lies is a great help if a model is solving slow.

Enhanced Browser-Based Reporting and Visualization

OLAP is good, but the ability to do real-time drill-downs, data segregation, reformulation, and graphing in the browser is even better. Noticing that a number of clients were exporting the scenario results and importing the results into a third-party reporting tool with more powerful data analysis and graphing capabilities, Trade Extensions built their own full-fledged rules-based data analysis package (like TS Insight and IQub and a host of others) that allows a user to do the real-time drill-down analysis required to understand complex models in the browser so a user never has to leave the Trade Extensions application. The ability to drill down and reorganize dimensions equals what you will find in the more advanced data analysis applications.

Put these new capabilities together, and a user is truly able to build, analyze, solve, and explore more complex beyond sourcing optimization models than they would have ever thought possible just a few years ago.