Category Archives: Technology

Coupa: Crouching Cheetah, Hidden Hippo

For those of you who have been following along, I recently did a 3-part series on Coupa (Part I, Part II, and Part III), a company that has been taking off like a rocket in the e-Procurement space (growing almost 200% year-over-year with one stunning customer win after another), where I asked if their strategy had shifted to customer acquisition first and building a better platform second, as it seemed to me that their rate of product innovation over the past year has not kept pace with their historical rate of product innovation. And while I will freely admit that the most important thing in business is customer acquisition and retention, and that this often means focussing on customer requests, which usually fall under the category of renovation, first and innovation second, I really admired Coupa for their devotion to innovation first and figuring out what the customer needed before they asked for it.

I’m happy to say that Coupa took me up on my challenge and decided to spend a few hours reviewing in detail not only what they have done, but what they are working on now and future directions they have mapped out. The short story is that the product team has been very busy not only fleshing out the core platform, but on finding ways to take its accessibility, usability, and generality to the next level.

From an accessibility viewpoint, they’ve started porting to the Force.com platform. While they haven’t announced it yet, and don’t plan to for a few months, Coupa Expenses is now available on the appexchange2, and can be found by a simple search. Force.com users can now use Coupa Expenses to accurately determine their cost of sales (which allows them to more effectively forecast revenues, estimate expenses, and allocate resources). This app not only allows you to track expenses, assign them to opportunities, and get up-to-date reports against budgets at any time, but also includes the “frugal meter” that lets an employee now when a cost is frugal or high compared to averages and / or limits. And there’s more to come.

They’ve also been working extensively on their API. This may sound boring as all get out, but the real value of a Procurement platform is only realized when all of the spend is accessible through that platform. In other words, unless you have an integrated view of spending that includes direct, indirect, Contingent Labor/SoW, and T&E spend, you really don’t know how much you’re spending and, more importantly, the TCO of categories where the products you are buying require support services and T&E expenses to manage both the manufacturer and/or services provider. If a company is using one (Best-of-Breed) platform for direct, one for T&E, and one for indirect and/or contingent labor, then the spend is distributed across multiple systems and no one system gives an accurate view, unless it is integrated with all of the other relevant systems. Generally speaking, these integrations are expensive as most of these systems (and classic ERP systems in particular) don’t have good APIs and only experienced, expensive, third parties can accomplish the integrations. But with fully documented open and transparent APIs that expose all of the data elements and core capabilities of the platform, any decent development team can accomplish the integration. Not only has Coupa fully exposed and documented their API to allow for easy integration with ERPs and Supplier Networks, but they have also built an extensive site at integrate.coupa.com to allow their customers to integrate with any systems they need to quickly and easily. (And with their Boomi partnership, most customers can integrate Coupa with their ERP systems with very little effort.)

From a usability viewpoint, not only is the current instantiation of the UI (intelligent-)search based, but the UI workflow is being streamlined to make regular tasks as quick, easily and painless as possible for the average user. From auto-calculating miles in expense reports (using Google Maps) to auto-classifying receipts (using OCR when possible), it’s all about making it even easier to use than Amazon or eBay, so that organizations get the adoption necessary to make their eProcurement initiative a success.

From a generality viewpoint, they’re working on features and functionality that will take e-Procurement to the next level in the average mid-market company, regardless of vertical. Look for a few announcements late this quarter / early next quarter on how they’re going to do that (and how they’re going to not only address the weaknesses with their new benchmarks and budgeting capabilities, but take them to a new level as well). The development cheetah has been running at full speed in the background, and once the product management hippo gets excited, it’s going to charge with an almost unstoppable force.

Does Your CSM System Provide Multiple Product Views?

A recent white paper by Dassault Systemes on Product Lifecycle Management (PLM) hit the nail on the head when it asked, near the back of the paper, if your Component Supplier Management system supported multiple views? Specifically, the paper on “Component Supplier Management” (CSM) identified three views that your PLM / CSM system has to support if you want it to be adopted across the organization and utilized across the product lifecycle:

  • system (logical)to enable distributed and cross-organization design activities
  • physical (EBOM: engineering bill-of-materal)to enable component identification, selection, and standardization
  • financial (BOM: manufacturing bill-of-analysis)to enble supplier identification, selection, management and (strategic) sourcing activities

The reality is that PLM is a very involved process that not only touches most of the orgnization, but impacts most of the organizational functions. As a result, it needs to either support most of those functions or capture the data required by those functions and/or integrate with other organizational systems that capture the necessary data and/or accomplish the relevant functions in order to be useful, because PLM is not a function that can be siloed into any one organization. Keep this in mind when selecting your next PLM system.

Yet Again, the Cloud is Not a Fluffy Magic Box

This blog has told you that the cloud is not a fluffy magic box and given you a number of reasons, but yet, even though it is one of the seven deadly software sins, it would appear that many people are still holding on to this notion. Take this recent “panel from Ariba Live” (as covered in CRM Buyer) for example. Even though the experts admit that there are still issues to be addressed and problems to be solved, I get the feeling that many of them still believe that the cloud will solve all your woes. It won’t. And if you’re not careful, it might even create new ones!

First of all, do you even know what the cloud is? Is it the next form of SaaS? of IaaS? of PaaS? Is it truly computing-as-utility, or is it the next step in the evolution of computing on its journey to become a true utility service? Depending on which vendor you talk to, it might be any of the above, all of the above, or none of the above … and thanks to the proliferation of useless buzzwords, you might never know what your provider’s definition is (until the service goes down and they don’t fix it in a timely manner because it’s “not their problem”). Until there is a consistent definition of cloud, it can’t even be called a platform!

Secondly, it won’t necessarily lower costs or increase efficiencies. That is all dependent on your internal efficiencies, the provider’s efficiencies, and the platform your provider operates. With respect to software, one has to consider at least the following costs:

  • License / Maintenancethe initial acquisition cost plus ongoing license / maintenance / utilization costs
  • Supporting Softwareback end database, web/application software, and middleware
  • Hardwareservers, SANs, routers, switches, etc.
  • Powerraw energy costs
  • IT Personnelsystem, server, and database administrators; network engineers; help desk / user support specialists; etc.
  • Bandwidthinternet costs

which might not be reduced at all. Consider:

  • License / Maintenancewill add up as the organization is paying monthly costs for infnity
  • Supporting Softwaredoesn’t go away, it just gets rolled into the monthly cost
  • Hardwarewon’t be any cheaper for the cloud provider than it is for any reasonably sized organization
  • Powerraw energy costs could be higher if the cloud provider’s data center isn’t situated in a region with low power costs (from sustainable sources)
  • IT Personnelare still required and still need to be paid a decent salary and the organization will only see savings if (a) the organization didn’t need full time resources which it would otherwise be paying for or (b) the cloud provider has resources that are more efficient
  • Bandwidthcould go up as now all data is flowing back and forth over the internet, and not across internal networks

The cloud is only more efficient if the provider is able to take advantage of efficiencies of scale unavailable to the organization — and it’s only more cost effective if the cloud provider can pass the savings on and if the customer can pay only for what it needs (and not the shelf-ware that comes bundled with most current enterprise systems). This is never a guarantee as there are a lot of variables that have to be considered in the calculation of the lifetime total cost of ownership, which is the only true way to determine which system is the most cost effective.

Third, the contract, and the policies within, really determines the value. If the provider is not taking responsibility for delivering the whole solution, then there could be serious problems down the road. For example, if the provider is only delivering the software and using a third party for the infrastructure and the third party goes down, the provider might be down for days and leave you without recourse if the provider can claim “force majeure “.

Finally, the average executive doesn’t care how IT is delivered as long as it is cost effective. This says that the penetration of the “cloud” will be limited to those situations where it is truly the most cost effective solution and where IT is comfortable with a solution that stores corporate data off-site. Even in five years, despite the rosy predictions of some of the analyst firms, that’s not likely to be anywhere near 50% of the market.

So get your head out of the clouds (which bring asphyxia, hallucinations, brain-damage, and sometimes even death. It’s for the best.

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Want a Successful Supply Chain Enterprise? Architect It!

As per Wikipedia, an enterprise architecture is a rigorous description of the structure of an enterprise that describes the terminology, the composition of the subsystems, their relationships with the external environment, and the guiding principles for the design and evolution of an enterprise. The goal of an enterprise architecture exercise is an operational description of the organization that is comprehensive and includes enterprise goals, business functions, business processes, roles, organizational structures, business information, software applications, and computer systems that are in alignment.

Done right, an enterprise architecture provides the logical framework that establishes the links between business strategy and organizational structures, processes, databases, and technologies and improves organizational performance by decreasing organizational cost, reducing complexity, reducing risk, and increasing organizational agility — keys to success in today’s tough economic climate.

Furthermore, the integrated view of business and IT architectures not only allows for improved performance, but limits operational risk by allowing for the controlled coexistence of old and new processes. It’s a great recipe for success as it allows for the controlled evolution of the supply chain function from good to great.

As proof that it works, consider this recent article in Startegy + Business on Strategy by Design which discussed how even a large (UK) government agency, which had been largely paper-based with fragmented workflow processes and outdated IT systems, was able to reduce the average time to process claims by more than 70% while slashing the number of processing centers by 60% by adopting the discipline of the EA process.

So how does one master Enterprise Architecture and build a successful supply chain enterprise? According to the article, the organization focusses on the dimensions of:

  • Strategic Alignment

    that focusses on achieving real business results

  • Leadership & Staff Development

    where top management communicates the intended value throughout the organization

  • Performance Measurement

    that accurately captures the impact of the EA initiative on a regular basis is critical to strengthen the message

  • Organizational Structure and Formal Processes

    that provide a strong foundation

It’s a good message, and a good plan.

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Empower? Or Incitement?

It’s that time of year when Emptoris holds their annual conference, invites all the bloggers (but me) to their peace pipe pow-wow, and somehow stirs them into a blogging frenzy which results in the temporary flooding of the bitstream with post after post about Emptoris. It wouldn’t be so bad if we got good information out of it. However, possibly due to the “selective reporting” favored by members of the previous management team, this hasn’t been the case historically.

And while it does look like the new team is working harder at being open and communicating (except where financials are concerned, but it’s certainly better to share nothing at all then inflate the numbers by 20M), despite the flurry of activity over the last few days (which likely isn’t the end), we haven’t received much in the way of useful information yet, and, more importantly, it looks like most of the bloggers (except Bob) have missed the only point that matters. But first, a recap of the stories to date:

Spend Matters

  • “Emptoris Empower Kicks Off — What’s on My Mind to Focus on?”What to ask? What to ask?
  • “Emptoris Empower Dispatch: Emptoris is Thriving — But What’s Behind the Numbers?”They claimed 91% “booking sales” growth in the first half of this year, and that a lot of new business is from “channel partners”.
  • “Friday Rant: Emptoris Echos — Cloudy With a Chance of Software”Emptoris takes to the clouds with echOS — is a cloud-based delivery system built to streamline the deployment and management of Emptoris solutions.

Procurement Leaders

  • “Emptoris Empower: procurement’s moments of engagement”Geoffrey Moore’s keynote got everyone excited.
  • “Emptoris Empower: beating the benefits drop-off”Patrick Echkhert’s presentation (on behalf of Cardinal Health) made a great point, implementations have to revolve around a sustainable savings/benefits plan.
  • “Emptoris Empower: the case for mastering risk”Accenture’s Randall Moore explained how becoming a risk master leads to real returns and that technology and talent investments can pay for themselves 8-fold when you reach a level of mastery.

Gartner (Debbie Wilson)

  • Dispatch From Emptoris Empower 2010$2 million investment in its data center infrastructure. Some procurement friends expressed frustration with gaps in functionality that aren’t being addresses quickly enough.

Supply Chain Matters

  • “Emptoris 2010 Customer Event- An Anticipated Report of Glowing Progress”The management team has been clearly focused on getting closer to customer needs, while making implementation of its technology easier for customer to navigate and manage.
  • “Emptoris Empower 2010 Customer Event- Summary Impressions”Over 100 customers went live with Emptoris applications this year. Emptoris signed a global agreement with SAP regarding the use of SAP Business Objects technology for business intelligence reporting and analysis needs across the Emptoris suite of applications. A new and transformed management team.

That last point is key, if you happened to catch one of Wednesday’s press releases, you’ll see that Emptoris added three new senior executives. Add this to the number of new executives the new CEO has brought in since his arrival, and you’ll see that the current management team is almost entirely new. At this point, he’s only a few executives away from an entirely new management team (and I will be thrilled the day it’s entirely new). This will be the key to their success (or failure) in the future.

In my view, Emptoris’ biggest problem historically has been their management team, which appeared to be hand-picked by the former CEO to mirror his corporate philosophy (and never challenge his way of doing things) — which obviously wasn’t the right one for Emptoris (because, if it was, why did they never truly make profitability and need yet another funding round last year just to stay afloat, almost 9 years after formation?). I hope the new team maintains the “get close to the customer and figure out what they need” strategy. In this economy, I think that’s your only chance of success.