These 5 breakthroughs get you on the path to transformation

Profile picture for user pwainewright By Phil Wainewright September 14, 2016
Summary:
Lessons from enterprise adoption stories of Coupa procure-to-pay SaaS software show five breakthroughs you need to get on the path to digital transformation

Woman drawing bow, aiming arrow © evodesigner - Fotolia.com
It's hard work to persuade enterprises to take on cloud applications that bring digital transformation to core business functions. That's one of the reasons a company like SaaS procure-to-pay vendor Coupa, which filed draft IPO papers last week, has to invest so much to grow its business.

At Coupa's May conference I sat down with Kendra Von Esh, who as CIO at Veolia North America oversaw adoption of Coupa before 'crossing over' to become executive strategic advisor at the vendor. In our conversation we explored how Coupa overcomes resistance to its cloud-based software from the overwhelmingly conservative procurement, finance and information technology professionals to whom it must make its sales.

Coupa's IPO filing has brought this question back into the spotlight, and earlier I wrote about the battles fought when Juniper Networks adopted Coupa. Von Esh saw similar issues coming up at Veolia and at other enterprises she speaks to in her current role. Here are five breakthroughs that have to happen to win adoption of a SaaS product like Coupa in core enterprise functions that have traditionally been performed by mainstream ERP packages.

1. You're going to upset management's plans

At Juniper, senior director of indirect procurement David Hearn had to battle to bring in Coupa in the face of an incumbent preference for SAP Ariba. Von Esh says she faced a similar fight at Veolia.

I had to fight politics in France [where Veolia is headquartered], because they wanted SAP. They were rolling SAP out and we were saying that Ariba is not going to be the answer, because of the user adoption.

I was going absolutely against my parent company's strategy. This was going to be the global platform, not easy to do, extremely political, I had a lot of people to convince, and I basically said 'Listen, all right I'm sticking my neck out, I think this is what we need to do.' I got my executive team behind me.

2. You'll find people wary from past experience

People are 'once bitten, twice shy' after past experiences of all-consuming ERP implementations that failed to deliver the promised benefits. Often, they'll have had similar experiences with client-server SaaS packages that performed poorly and were hard to use, says Von Esh.

You need to educate your executive team that this is different than what everyone's experienced, especially in the ERP space. Those things are monsters.

I really had to learn how to get the business to forget about the past, and know that there was something better out there that actually was going to be easy, quick to implement, time to value, exceeding our goals, and then just continue to grow.

It's important to show that a true cloud-based SaaS product has the ease-of-use of a web-native consumer platform like Amazon or Google and can be rolled out without the technology pain that has accompanied earlier generations of enterprise software.

I really try to educate and inform people that the pain of this change is minimal. It's not a big change management focus and exercise. It's not going to cost you millions of dollars where you're going to have to fly people in and train them in a room.

3. You are going to disrupt the status quo

While the technology is less disruptive and the software's easy to learn, people are still going to have to learn new ways of working. Combined with their fears learned from prior implementations, they're going to be skeptical.

When they think about it as a system that they're implementing, it's clearly fearful. It's long. It's a big change management effort. People aren't going to like this. They're going to be kicking and screaming through the whole process and [saying], 'It's not going to give us the results that we want, because that has been the history of solutions in the past.'

Innovation means that old paper-based processes can be replaced by more efficient digital alternatives. Von Esh cites examples such as using OCR to automatically read emailed POs and invoices directly into the procurement system, or having people interact with a mobile travel and expense app by voice command.

Coupa doesn't just put features and functions into a solution, they actually look at the process differently and challenge the status quo of how people do things today.

4. You'll disturb established lines of management

Adopting more automation and self-service while bringing separate silos of information together inevitably means that the way processes and policies were managed in the past will have to change. At Juniper, Hearn had to convince the CFO that opening up access to the procurement system was going to bring in better control rather than leading to a free-for-all. This type of change has to be managed carefully, says Von Esh.

It's political. Sometimes it has nothing to do with the system or the fact that we're going to implement a new technology. It has to do with relationships within the organization, the leadership direction, the [level] of collaboration.

5. You have to change the mindset

Indirect procurement has typically focused on transactional efficiency, whereas a system like Coupa delivers value by helping the enterprise improve its sourcing. That means persuading people to change their mindset from clerical outcomes to a more strategic outlook, says Von Esh.

What value are you bringing chasing down an invoice or taking calls from vendors asking are they going to be paid? Wouldn't you rather be more strategic and learn other things in your organization and be more of a value-added player?

A focus on more strategic outcomes also helps build a business case, because it makes it possible to show how better procurement can help the business achieve its goals, rather than just shaving off operational costs.

Tying it to actual results is necessary in order to get the investment dollars when you're competing with everything else out there that has a little bit of an ROI ...

Map it back to the business goals of what the company is trying to achieve and then you're not a procurement solution anymore. You are a business enabler. You become strategic to the business, because you're able to deliver those business goals unlike any other part of the organization.

My take

This is so much more than simply selling a replacement technology or software package — it's fundamentally changing how a key part of the business operates. The example here is procurement, but the principles apply equally well to finance, HR, sales or marketing automation, and many other aspects of core enterprise operations. Digital transformation is not merely swapping in some new technology, it also entails fundamental operational change. No wonder each sale requires careful investment of time and effort.

Image credit - Woman drawing bow, aiming arrow © evodesigner - Fotolia.com

Disclosure - SAP is a diginomica premier partner. Coupa is a diginomica partner at the time of writing, and paid my travel costs to attend its annual conference in San Francisco.