Coupa Inspire - price benchmarking for ocean freight, Scope 3 emissions reporting

Phil Wainewright Profile picture for user pwainewright April 5, 2022 Audio mode
Summary:
As the annual Coupa Inspire event begins, the BSM vendor introduces price benchmarking for ocean freight and Scope 3 emissions tracking, among other new features.

Industrial port cranes lift shipping containers against blue sky © Mr. Amarin Jitnathum - shutterstock
(© Mr. Amarin Jitnathum - shutterstock)

Coupa is announcing several updates to its Business Spend Management (BSM) platform for the opening of its annual Inspire conference in Las Vegas today. They include new support for tracking and reporting carbon emissions in the supply chain, known as Scope 3 emissions, improvements to supply chain modeling, and the ability to benchmark pricing for services, starting with the currently highly volatile category of ocean freight.

The new price benchmarking for ocean freight marks the expansion of Coupa's AI-driven price benchmarking, first introduced earlier this year for certain goods, into services. This is part of a wider set of benchmarks based on data insights from across the aggregate spend of Coupa's customer base, under the overall branding of Community.ai. It delivers on a 12-year journey at Coupa to harness that data, as Donna Wilczek, SVP Product Innovation & Strategy, explains:

We have really been dreaming of the day where we would have enough volume of spend where we could apply community.AI to solve the problem of giving customers a better understanding of what is happening, as it relates to the goods and services they are buying, based on the community-aggregated trending of what is happening for those particular goods and services ...

It is honestly on some level a dream come true when I see the screens, where a customer can select one port to another port and see their pricing for this ocean freight transportation lane, and what is happening in the market. And we all know, pricing has had so many fluctuations over the last two years. It's really a wonderful added benefit and a value of Community.ai that's really only available through Coupa's business spend management platform, because we have the data.

Supply chain modeling

Coupa is also harnessing AI in supply chain modeling to help customers decide between different transportation choices. Wilczek describes this new feature as all part of Coupa's "digital twin" of the supply chain, which customers such as Microsoft use to design their supply chain.

Another new feature here is the ability to feed third-party risk data into supply chain design and planning to perform risk modeling. Wilczek says it's further example of how Coupa is integrating data across its platform to help inform decision-making. She elaborates:

The ability for an organization to pivot quickly is an imperative for these organizations to be successful and continue to operate. So in our supply chain design and planning solution, the ability to create a digital twin of the supply chain, and then take that risk data automatically and model, what will my scenarios look like? These what-if scenario models based on everything from cost to serve, to emissions to serve, and risk factors blended throughout, is really critical.

Then being able to say, based on this new model, how do I now source the new suppliers that I need? That was another synergy that we created about six months ago or so, where you take the model, and you push it into sourcing, so you can now execute the change needed.

Scope 3 emissions tracking

The expansion of Coupa's ESG offering to include Scope 3 emissions tracking is particularly notable, says Wilczek. There is also new layer of diversity spend reporting available. These features provide support for a type of reporting that organizations are finding particularly challenging. She explains:

One of the things that has been interesting through the years is learning just how poorly organizations are equipped to do these types of government-mandated reporting. They simply don't have the data at the granular level in order to be able to report it. They may know who they paid, but they really don't know who they paid at a line level of what they purchased, what category was purchased. Scope 3 emissions reporting requires that type of granular data, or else you just simply won't be able to meet the requirements.

Note that this isn't actual emissions data, but a calculation based on an estimate of typical emissions for each category. Coupa applies what's called a carbon coefficient for the category, in order to determine the carbon footprint or the carbon impact of that particular spend in that particular category. Customers also have the option to configure Coupa to collect the actual emissions from their supply base as well, but at the moment such metrics are few and far between. Over time, it seems likely that customers will do a blended model, where they will collect data from suppliers, as well as doing automated assessments on areas where they didn't receive that data.

The catch when collecting actual data is whether the measures are standardized, but Coupa is working on that too, across a wide range of metrics beyond as well as within ESG. Wilczek elaborates:

One of the things we are working on across our model and across our community is creating a standard data collection model for these suppliers and third parties, covering everything from their business information to their payment models, to their risk models, including things like emissions and diversity as well. So really standardizing data collection, because we find as we standardize the data for these suppliers that are doing business in the community, then everyone wins. All of our customers benefit, and the suppliers themselves benefit as well, because they don't have to keep repeating the data. They don't have to keep doing this onerous data reporting to all of their customers.

Data collection

Coupa's role as a facilitator of data collection and standardization also means that it can help customers and their suppliers adapt as requirements change from year to year. Wilczek adds:

Conditions are changing quickly in these areas. What may have been a standard one year prior is different. The ability for these customers to be agile, and to be able to change as the macro economic challenges change or government regulations change, is incredibly important.

Making it easy for suppliers to keep their information up-to-date without having to rekey it for each separate customer or group of customers has always been an important aspect of Coupa's approach, says Wilczek. Rather than having them enter that information as a separate process, it's better too if it's collected as a continuous side-effect of business interactions. She says:

We want to create modern approaches, where data is being collected during the business processes themselves. That's the key to data freshness. Because oftentimes, and I'm sure you've experienced it as a supplier, you may fill it out one time, but then you ignore it. So instead, if we capture the data continuously, as the supplier is doing business with their customer, then the data is naturally refreshed.

The final announcement introduces new supply chain financing options. Coupa already provides for early payment out of a customer's own cash reserves, but now it's also announcing a facility to offer early payment funded by a third party finance provider. This is available in early access to start with but is expected to be more generally available soon. Although invoice financing is already commonplace from separate providers, it makes sense to package this up as part of the Coupa experience, says Wilczek. She explains:

These suppliers are already invoicing through Coupa, they're already here. So the logical point of time is to present the offer at the moment of these invoice transactions. Whereas if you are working with standalone solutions, you now have to do a separate onboarding process, separate change management, separate training, for these suppliers. Oftentimes, what you end up seeing because of this is that you get lower adoption. So there's quite a few of benefits of consolidating your processes, consolidating your experiences for your suppliers, and making it all available through Coupa.

My take

Plenty of new features for the Coupa community to digest in its first in-person get-together in two years.

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