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OUTLOOK

The Case for Business Spend Management Business spend materially impacts the success of every organization - to the tune of trillions of dollars per year. Estimates suggest that annual external expenditure comprises over $16 trillion* within the Global 2000 alone.

OUTLOOK

While most organizations have spend visibility to “close the books” on a monthly or quarterly basis for reporting purposes, only select firms are able to influence and get more value from their spend systematically. Currently, the most sophisticated procurement and finance leaders are teaming together in these shared objectives to drive more effective spend management. However, this concept of strategically and comprehensively managing business spend should apply to every organization.

Business Spend Management is a New Strategic Lever for the C-SuiteLeaders must unify all internal and external processes to strategically and holistically maximize the value of ever dollar spent. This calls for full Business Spend Management (BSM), which is a unified set of business processes supported by software that encompass the core transactions for spending money: Procurement, Expense Management, Invoicing, and Payments. It also includes related processes like Strategic Sourcing, Contract Management, Contingent Workforce, Supplier Management, and Spend Analysis—all enriched by cross-company Community Intelligence. BSM, along with CRM, HCM, and ERP, together represent the core operating processes of every business.*Source: in USD, based on PRGX

estimates (using World Bank and Forbes 2000 data)

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OUTLOOK

Procurement and Finance Organization Must Do More With Less

Most organizations today are pressured to find new ways to do more with fewer resources. The potential is great: Spend Matters research suggests that effective procurement and finance functions represent one of the highest returns on investment of any activity for businesses today (representing a 5-10X ROI for every dollar invested). But procurement and finance teams rarely have enough resources to tackle all the activities they are tasked with. And as the complexity of business increases, the stakes are higher than ever before.

The Business Environment is Becoming More Difficult

• Commodity, currency and regulatory volatility are creating additional bottom (and top) line uncertainty.• The balance of power in a range of categories/supply markets is shifting from buyers to suppliers.• Interest rates are increasing (and working capital is being looked at with a new, even more strategic lens).

The Sourcing, Purchasing and Vendor Management Environment is Becoming More Difficult

• Labor markets (in most parts of the world) are tighter than they have been in decades.• Traditional supply chain and supplier risk elements (supplier financial risk, compliance risk, etc.) is on the rise.

Delivering More with Less

• New compliance requirements (e.g., cyber) are increasing in all industries.• Productivity expectations are leading to reductions, not expansions, in headcount expectations, even when added labor

provides quantifiable returns.• Supply is “going digital” as companies task external resources and third parties with increased responsibilities.• Services expenditure continues to increase as companies look to reduce fixed cost structures.• Companies are being expected to deploy new technologies such as artificial intelligence (AI), big data and robotic process

automation (RPA) to generate measurable business returns – the days of experimentation are in the past.

With this consolidated approach, BSM can become a new strategic lever for the C-Suite to drive sustainable and profitable business growth.

• BSM introduces a new lever for digital transformation to achieve sustainable and profitable growth.

• BSM leverages cloud capabilities to rethink previously siloed business processes, going beyond “just software” into a full-scale, company-wide collaboration tool

• BSM takes advantage of and optimizes the combination of human and artificial intelligence• BSM provides a new collaborative framework that brings together internal (employees) and

external (supply market) spend management enablement • BSM provides a unique platform to support corporate and functional stakeholders in

procurement, finance, HR, legal and supply chain…• … While delivering technology to enable the frontlines of the organization

With transformative Business Spend Management capabilities, organizations can realize a significant increase in the ROI of every dollar spent not to mention improved risk management and tremendous cost savings that result in redeployment of company resources to fuel new business initiatives, market expansion, company profitability and other strategic moves that drive competitive differentiation.

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OUTLOOK

Business Spend Management: Enabling Procurement, Finance, HR, Legal and Supply Chain Functions Strategically

Organizations need a new way to manage this complexity and uncertainty in an environment where expectations for results are rising, not falling. BSM empowers both centralized and decentralized corporate functions with:

• Fully Scalable Processes – new and highly scalable approaches drive savings and compliance by capturing previously unmanaged non-employee expenditures (direct, indirect, and contingent workforce) from the largest categories to the long “tail” of buying activities through a “consumerized” process that’s easy for everyone in the business to follow.

• The Right Items and Suppliers – always select the right items and manage the supply base to minimize needless redundancy while introducing new suppliers as sources of innovation so that the business efficiently gets what it needs—always!

• Risk Management – constantly looking to the future of what’s going on in your supply base, with the external environment, with regulation, and with your business to manage all types of risk.

• Business Agility – quickly adapt to changing conditions like incorporating a new acquisition, international growth, changing financial plans, and more.

• Capital Efficiency – use BSM to unlock financial value across the business. From process efficiency to maximizing savings to giving managers tools to avoid unnecessary spend to maximizing the value of payment programs such as early-payment discount programs and virtual cards that maximize rebates.

• Powerful Buyer and Supplier Communities – supported by artificial intelligence to identify and share best practices, surface hidden risks, and drive a culture of continuous improvement and cost reduction.

• Benchmarking, Tracking, and Delivering Business Results – define a standard for operating KPIs and metrics that measure corporate results in business terms.

Extending Influence and Control Into the BusinessBusiness spend management does more than just improve how procurement and adjacent business teams manage their own activities. It extends influence and control into the business by:

• Providing a gateway to make sure that hard-fought savings drop to the bottom line• Making it simple for everyone in the business to “do the right thing” • Enabling every employee in a company to make the best possible decision for every dollar that they

spend • Making compliance easier than non-compliance• “Consumerizing” and simplifying previously complex steps and undertakings

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OUTLOOK

Technology is the Platform – But Not Just any Technology!

Business Spend Management technology – spanning procurement, invoicing, expenses, payments, sourcing, contracting, supplier management, contingent workforce, and spend analysis – is no longer just the sum of its parts. It can serve as a platform and catalyst for business improvement, but only when the right mindset is brought into focus that overcomes:

• Organizational silos• Legacy mindsets• Rigid IT contracting• “Concrete” systems such as ERP• Inflexible data models • Non-business centric metrics • Spending silos (e.g., SKUs vs. services) • Individual “strategic” and “transactional/tactical” mindsets

The right technology partner is essential to deliver a unified solution that:

• Uses a single cloud platform rather than a fragmented environment to optimize results. In Risk Management, for example, seamless suppler management and P2P lets customers channel spend towards pre-vetted suppliers, and to move spend around when supplier risk changes.

• Lets the customer start wherever they are and chart a course towards maturity. Some companies will start with just invoicing or expenses while others will start with procure-to-pay and supplier management.

• Uses a community of customers to develop insights that help customers get smarter about spending - AI technology “learns” from the anonymized data of participating customers to provide insights that couldn’t be derived from one customer’s dataset alone.

• Easily consolidates and manages spend across all business areas, across multiple spend management, ERP and financial systems as needed.

• Supports business requirements and success against those requirements with KPIs and benchmarking directly in the platform, not just technical and IT-led demands.

• Supports interactions—including email-based interactions that don’t require a traditional User Interface “UI” at all—that are easy to adopt and easy to use for all stakeholders including employees and suppliers.

• Enables digital transformation from the bottom-up. • Is agile by design, fast to deploy and innovates continuously. • Delivers spend, supplier and market intelligence.• Surfaces hidden supplier and financial risks to proactively address them before they damage

the business.• Enables policies which are right-sized and tailored. • Makes an organization a “customer of choice” for suppliers.

Measuring ReturnsProcurement returns should not be measured abstractly. Spend Matters research suggests the right technology partner can:

• Deliver a 5-6X+ hard ROI (in a matter of quarters, not years).

• Eliminate spend (where it is not necessary in the first place).

• Reduce volatility and forecast uncertainty.

• Drive contract compliance (further increasing overall ROI).

• Providing analytics and prescriptive recommendations

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OUTLOOK

Why Coupa? The Spend Matters PerspectiveCoupa is able to support just about all levels of maturity in Business Spend Management today, from the comprehensive vision common in the Global 2000 to the middle market, where transactional procurement, T&E, and accounts payable (AP) automation requirements are often the primary focus for for technology expenditure.

While Coupa is quite configurable overall, it discourages too much “off-roading” given that configuration without consideration of end user impact can reduce the value that the applications deliver when companies automate less-than-perfect business processes rather than adopting best-practice approaches.

Coupa blends ease of use for employees and suppliers with scalability to support complex requirements and the ability to integrate with ERP systems to provide a layer of visibility, compliance and control over spend across the enterprise. At large companies, Coupa often replaces first-generation P2P processes implemented in enterprise software products or homegrown systems, including ERP systems and ERP-based business applications, which are now Coupa’s primary competitors in the business spend management arena. We find it interesting that some of its largest customers are those that have been the strongest advocates of accepting “in-the-box” configurations as an antidote to first generation P2P science projects that Coupa is replacing — although, again, Coupa can, at this stage of development, mirror just about all the configuration requirements that one might possibly want to enable for those organizations that want to go down that path.

Coupa has also replaced many cloud competitor systems. It deploys as a pure software-as-a-service (SaaS) model via a multi-tenant data model hosted primarily in the Amazon cloud. Our recent customer reference checks confirm that some of the largest global multinationals are successful with this deployment approach.

Users Come FirstIn its design approach, Coupa was the first to realize that front-line users like to search as if they were on a consumer site (or app) such as Amazon and find what they are looking for ideally with a single keyword or no keyword (i.e., context presented items). Simply put, users:

• Want the correct item or service...• … with the correct price• … within their budget• … in compliance with their policies• … from the right, approved, low-risk supplier• …with an easy experience for receipt/invoice

approval to confirm delivery• … and with an agile process that expedites their

request and provides visibility into the process.

This may sound like a simple philosophy, but it actually flips the notion of e-procurement on its head from earlier approaches, which made compliance a challenge instead of easier than non-compliance.

With Coupa, the experience is centered on end users, not back office roles such as “buyer” or “analyst” — a critical nuance that cascades across all aspects of the business user experience, as well as the underlying architectural elements to support it. For example, users do not care if the item they are searching comes from China or a warehouse next door — they need to have all of the options in one screen to be able to analyze and compare them to make a buying decision or to have elements of that decision process removed by guiding them down a path that they trust. This is where Coupa’s experience not only excels but delights.

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OUTLOOK

Why Coupa? Coupa is the leading provider of Business Spend Management applications. Coupa connects hundreds of organizations representing the Americas, EMEA, and APAC with millions of suppliers globally. The Coupa platform provides greater visibility into and control over how companies spend money. Customers – small, medium and large – have used the Coupa platform to bring billions of dollars in cumulative spend under management.

Coupa delivers the most important qualities necessary to deliver maximum value in Business Spend Management. Coupa is Comprehensive, Open, User-Centric, Prescriptive, and we Accelerate the delivery of business results for customers.

Comprehensive – BSM is filled with opportunities for synergistic processes, if all those processes are delivered through a single cloud platform. Coupa delivers Spend Analysis, Strategic Sourcing, Contract Management, Supplier Management, Contingent Workforce, Procurement, Invoicing, Expenses and Payments through a SaaS platform.

Open – from strengthening relationships with suppliers to integrating with ERP systems and other technologies, Coupa opens the door to a world of opportunities.

User-Centric – Coupa makes it easy for employees and suppliers to get started and get things done quickly, from Amazon-like search to approvals and invoice submission with no login required.

Prescriptive – we help customers get smarter about how they manage spend by offering prescriptive recommendations from savings opportunities to insights about how to digitize supplier relationships and optimize processes.

Accelerated – implementation through configuration, ease of integration, and ease of adoption by employees and suppliers drive measurable business results on an accelerated schedule. Frequently live in as little as 6 weeks, the top quartile of Coupa customers saw 77% of invoice lines tied to a PO in only 8 months after go-live1.

1From a 2017 Study Achieve More Value from Cloud Spend Management

Customers Achieve Their Goals With Coupa

Visit https://www.coupa.com/results/ to find out more about how Coupa customers

deliver results for their organizations.