In our first 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 but that, lately, it seems that their strategy has shifted to putting customer acquisition first and building a better platform second. In our last post, we reviewed what they have accomplished over the past eighteen months, which isn’t too shabby to say the least (especially compared to some of their peers which do not appear to have innovated at all), but noted that there’s nothing to really shake your foundations … which is a shame considering that had Coupa taken benchmarking and supplier ratings to the next level, they could have knocked your Procurement socks off. This is the subject of this post.

In order for benchmarks to be useful, they have to be meaningful. In order for a comparison to be meaningful, it has to be against like items. And while you can compare apples to oranges, unless you’re comparing the spectra of dried samples in powdered form, it doesn’t make sense. The reality is that savings, request, order, and invoice metrics only make sense if the comparison is against a similar company of a similar size in a similar vertical buying similar products. Consider free-form requests … depending on company size that’s going to range from hundreds per year to tens of thousands per year. Frequency of self-approval … that’s not only going to depend on corporate policies but the types of goods being purchased. If the system is mainly used to purchase office supplies, who’s going to waste time approving every small order? But if the system is being used to buy high priced electronics, different story. PO value will not only vary widely between companies, but within a company. A purchase order for a weekly office supplies order in a small company will be a fraction of a purchase order for a new set of servers. Active suppliers will vary widely depending upon the size of the company and how many different types of products are being bought. Had Coupa defined appropriate verticals, segmented the verticals into appropriate sizes, and insured that the metrics were meaningful (even if that meant waiting until there were more customers in some verticals), this could have been extremely useful. However, right now, it’s interesting at best, and could be dangerous if misunderstood.

In order for supplier rankings to be useful, they have to be against meaningful metrics, and those rankings need to be defined by a majority of affected users. If they are random rankings defined by random users against random products, they are not very useful, especially if they are done by users who have only used the supplier’s products once and not users who have to work with the supplier and its products every day. In order to truly rank a supplier, a company needs to insure that all of the relevant users who use the supplier’s products or services regularly or who interact with the supplier as part of their role rank the supplier. This means that the buyer needs to send out mandatory surveys to these users. While a buyer can easily send out a survey through your standard SIM or e-Negotiation tool, what a buyer normally can’t do through these tools is figure out which organizational users are in the best position to rate the supplier. However, as Coupa enables all spend related to a supplier to be captured in the system, it’s a pretty easy query to figure out which buyers are the biggest user’s of a supplier’s products and which buyers should be ranking the suppliers. If Coupa had enabled the construction of supplier performance surveys which could be sent to the regular users of the supplier’s products in a single click, and then made it impossible for a buyer to requisition anything until the mandatory survey was completed, think of how useful it could be. However, right now, like benchmarking, it’s interesting, but not very useful.

Hopefully these oversights are just the result of Coupa going through the growing pains associated with a brand new management team and rapid customer acquisition. When you consider that The Coupa Sunflower was only starting to blossom, it would be nice to see Coupa return to the days when its releases were much more than coupacetic. After all, why should they settle for a coupe when they can build a dragster? It only takes a little bit of innovation in the right direction to bring back the excitement to Coupa Time.

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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

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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