Earlier this month, Rob Bernshteyn, CEO of Business Spend Management (BSM) specialist Coupa, made the case that as the world emerges into the Vaccine Economy, one lesson learned from the COVID crisis will around the importance of controlling organisational spend:
What we're hearing from many of our customers is that they didn't fully realize just how much they needed to get control of their business spend before facing the unpredictability of the last 15 months.
It was a theme elaborated on by Coupa in a recent virtual event hosted by the firm in which Bernshteyn opened the proceedings with a look at what may lie ahead in a post-pandemic era:
Undoubtedly it will not be all sunny skies. Yet unknown challenges will present themselves with the best businesses and the best business people will be able to overcome these challenges and seize opportunities. The road ahead will be bright for those well-prepared. As the digital revolution transforms the world, we need to make sure that we have a technology infrastructure that will get us on the road to success.
As diginomica always insists, the best proof points lie with customers and to support its thesis on the criticality of BSM, Coupa rolled out three flagship examples of organizations putting this notion into practice, beginning with global furniture retailer IKEA where up to 900 people across various teams tap into Coupa’s tech.
IKEA uses Coupa for strategic sourcing and supply chain design and planning, as Peter Grimvall, Supply Chain Design and Planning at the firm explained, enabling it to connect across a wider value chain:
I think it's important that you create a KPI that can measure the value creation more from an end-to-end perspective…How we try to measure it is, first we measure the design value...The other measure that we apply to this is also the accuracy of our design business cases versus actuals, one year after implementation.
This also enables the firm to become better at managing risk, he added:
When we see that we are deviating from what we said a year ago, and what the result shows one year later, that is an aspect of the design that actually we want to become better at going forward.
Overall, he argued, there is a clear link between supply chain and how IKEA spends money, a link that Coupa’s tech helps to manage:
I strongly believe that they are super connected. The main obstacle today is actually that they are not digitally connected. They are connected in reality, but actually the digital connection is many times missing. This comes back to one of the major challenges that is, how do we break different organizational silos to better understand the value creation process that they have to do together with different stakeholders?
Meanwhile at Procter & Gamble (P&G), the global conglomerate found its investment in Coupa paid off during the COVID crisis when there was an enormous need for greater agility to respond to a situation that no-one could have anticipated. Chief Purchasing Officer Ana Elana Marziano explained:
As the pandemic expanded, we clearly identified the need to provide our employees with the necessary personal protection equipment and we needed to quickly establish new supply chains, new machinery, new materials, new relationships, new everything. We had Coupa enable us to do that. In a matter of hours, we were able to set up new vendors, set up new suppliers, supply chains, send new invoices, all the connections and all the relationship with all of our vendors, that in the majority of the cases were completely new, not even existing in our system.
P&G’s ability to respond in this way was aided by clear alignment from the top of the business about who was delegated to manage money, she added, with two purchasers assigned that overall responsibility:
When we made that change, it completely changed the conversation. It completely changed the conversation from, 'What is your opinion? OK, we'll take it. Now, go away!' to, 'We want you to be in everyday conversation. We want your view of the industry. We want your strategic thinking on the business and even on the day-to-day decisions we make with consumers, with business planners, with business strategists'. If you're not integrated, if you're not part of that business conversation, you don't get to that level of influencing decisions and being able to have a seat at the table. And just to be clear on the language here, when I'm talking business, I'm not talking the supply chain part of the business, I'm talking the entire business unit.
Flush with cash
Finally, Royston Da Costa, Assistant Group Treasurer, Ferguson Plc, a leading distributor of plumbing and heating products focus primarily in North America, testified to the importance of managing cash:
I remember fondly when I joined the group back in 2002, the CEO at the time being quoted as saying, 'You know, basically, we sell toilets and there's nothing sexy about that'. But in terms of our business model, that's what brings in the cash. In terms of our partnership with Coupa, we had selected Bellin, which was a TMS (Treasury Management Software] solution, before Coupa acquired them more recently. Our primary goal was really to partner with a cloud-based solution provider that would give us not just the visibility that we so needed at the time, but also would give us the future-proofing that we wanted to put in place and to secure. So it was about building on a platform would take us into the future. Since COVID-19 happened last year, that has certainly borne fruit for us.
The firm did look at using a traditional ERP solution and went through a review of options, but found them lacking, he added:
It was shocking in some respects that they weren't even aware of some of the regulatory requirements that Treasury has to comply with. So it was kind of like a no brainer when we went to our CFO and said, 'Look, based on the selection process that we've been through, there's no way they would get we get past the first round, frankly’.
At Ferguson, Coupa is used by the supply chain team as well as the Treasury team, Da Costa explained. In terms of where the synergies lie, he points to visibility as being key:
It's having that transparency. Whereas previously, we were reliant on a person or team making us aware of a large payment or cash that is about to go out of our bank account at some point, having that visibility or having that information being communicated almost automatically through the platform without having to necessarily be made aware of it physically or having to go and look for it, is going to be an improvement and start to be a benefit for all concerned. The more information, the better and the more advanced notice we have, the better because then we can plan even further ahead.
Three interesting user exemplars that make the case.