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Coupa Inspire - giving CFOs more visibility and control over spend

Phil Wainewright Profile picture for user pwainewright April 13, 2023
Summary:
At this year's Inspire conference, spend management vendor Coupa is talking up end-to-end visibility and control for the CFO.

Rob Bernshteyn, CEO, Coupa Inspire 2023
Rob Bernshteyn, CEO, Coupa Inspire 2023 (Coupa)

Reflecting the cautious business environment, Coupa focused on driving business profitability in announcements at the opening of its annual Inspire conference in Las Vegas yesterday. A new CFO dashboard provides greater visibility into spending as it happens and suggests actions to make savings and improve cash flow. Purchase order collaboration helps manage complex orders and track variations, while new capabilities continue to support ESG initiatives. These new features are a response to customer demand, as Donna Wilczek, SVP of Product Strategy and Innovation at Coupa, explains:

Some of the things we're seeing continuously across our customer base is the need to make every dollar that they spend be more effective, and to be more sustainable ...

We also see a lot of system consolidation, discussions around how organizations are going to optimize their technology programs in order to optimize their costs on the technology side as well. And in discussions with so many CFOs and finance organizations, the need to fundamentally transform the back office function to become more efficient, to be more cost-optimized, to be more sustainable.

The messaging is pitched at finance chiefs as much as their colleagues in procurement and sourcing, which has been Coupa's traditional market. The new announcements build on the vendor's broad offering across the spectrum of business spend management, while advancing its capabilities to act as a management layer that brings together information from ERP, supply chain and other systems to improve visibility and make recommendations. Wilczek, who briefed us in advance of the conference, says the platform message is resonating with customers:

We're seeing again and again, our customers' IT architectures [are] a bunch of point solutions that they have tried to stitch together with APIs and micro services. That leads to increased IT costs, increased user frustration, and effectively inefficiency within the business. What is happening at the user level, at the employee level, is they're being faced with so many different systems, so many different experiences, and they're wasting time.

You simply cannot automate the process as much as you could [and] reduce the time these people spend in these applications, unless you start giving them a platform solution that eliminates the need for IT to stitch different points solutions together, eliminates the need for all these disparate contracts with all these different vendors, all effectively trying to perform the same thing, which is transforming the back office and making it more efficient, giving more visibility and control. That's how Coupa has been architecting our platform, and building the platform as an extension of the ERP layer, to consolidate these applications, to reduce the IT costs and to make the organization much more efficient through things like automation.

CFO dashboard

The CFO dashboard is a case in point. Running natively on the Coupa platform, it gives finance teams real-time, global visibility of spend across their organization, and recommends actions that can be taken to reduce costs, for example suggesting alternative sources. This is distinct from the planning and budgeting tools these teams may already be using, because of its connection into live spending and the ability to make changes in the moment. She explains:

These are in-flight transactions that allow the CFO in a minute's time, or the finance organization, to insert themselves into the transaction to get control before it actually goes out the door, before it's committed. So it's a very different aspect. It's not just simply reporting on it, but it's creating a level of control, where the finance organization can insert themselves and become part of the approval processes themselves within Coupa. Those are the types of things that you don't get when you're simply integrating data into a reporting layer ...

The FP&A solutions that they're currently using don't actually give them that control layer of approvals and insertion into things like contracting processes, or risk assessment processes or sourcing processes.

An example of how this might work is to bring together T&E and invoice status to help create a cash forecast for the treasury function. That team can then work with their procurement colleagues to better manage cash flow. She adds:

Different people have different tasks that they do in order to optimize the spend. It's not just about the procurement organization operating in a vacuum. It's truly how the procurement function works with these different parts of the business to optimize the costs.

PO collaboration

Purchase order collaboration, which is now going into general availability, is another example where existing systems aren't connecting well. Wilczek says:

The existing market solutions are hard to use. They're so complex that the supply chain planners, and the suppliers themselves, stop using the solutions. Instead they are using Excel. They're using emails, they're using phone calls. And what that has led to is sometimes chaos within the business — lack of visibility into where all your critical goods are or your goods for resale. Inventory arriving earlier than expected or inventory arriving later than expected and shutting down plants and resulting in unplanned minutes of downtime. Significant impact to the business through inefficiencies and problematic technologies that don't actually foster collaboration between the buyer and their suppliers for these critical goods and services.

Designed to integrate with an existing ERP, MRP or supply chain planning solution, the Coupa offering provides a collaboration layer to connect buyers and sellers so that they can co-ordinate the fulfilment of complex orders. This is a much more detailed, use-case specific type of collaboration than a general-purpose teamwork solution can handle, as Wilczek explains:

None of these things are use cases that like a Teams or a Slack collaboration can provide ... This is a highly structured model that is built around the needs of supply chain planners with orders that have 1000s and 1000s of lines and constant changes at the line level at a highly granular level.

For example, a supplier might have a production delay on the full quantity of one line item and need to agree with the buyer to deliver say 200 out of the 500 total to start with and then supply the remainder on later dates. All of that can be agreed and recorded in the collaboration tool against the line item, making it easier to track what's happening and for each side to plan accordingly.

ESG is still a priority

On the sustainability front, Coupa is expanding its Scope 3 emissions tracking to include business travel. Despite the economic pressures, ESG remains a priority, not least because customers, investors and governments continue to emphasize its importance. Wilczek says:

Businesses don't operate in a vacuum. They can't simply over-rotate and say we're going to optimize fully for cost and forget everything else, throw out ESG. In addition, the governments won't allow them to either. The governments are continuing to increase pressure and regulations around the globe on ESG factors.

In any case, many companies are finding that ESG measures can also be beneficial from a cost perspective. She adds:

What we are seeing in our customer base is that you can do both, you can prioritize making sure that every dollar you spend is optimized for cost. But at the same time, you can balance your purpose components, your ESG footprint — you can do it effectively, through smart technologies.

My take

We're increasingly seeing vendors emphasize the platform message as enterprises look for more end-to-end visibility and control over data and processes. We see this as part of the broad secular shift to Frictionless Enterprise, but at a time when everyone is looking to control spend and find efficiencies, the economic argument for consolidation around a platform is also finding some traction.

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