Manage Spending and Procurement as One


In most organizations, spending and procurement are different disciplines managed by different people. In the end, however, they are about the same thing — spending the organization's money. So it was only a matter of time before someone would combine the two. That's what Coupa Software, a cloud-based SaaS spend management player, did.

Actually, a number of vendors focus on e-procurement, and others focus on spend management. Here, Gartner identifies 11 vendors. Coupa is trying to break out of the pack.

One of the side benefits of having spend/procurement management together as a cloud service is that it provides an opportunity to peek at the customer activity in aggregate to spot trends (given that the right security protections are put in place from the start, of course). SaaS vendors, if they are smart, look at what their clients do with the software all the time as they plan enhancements and fixes. What's less usual is publishing what they see, even in aggregated form. Still, Coupa's latest numbers are interesting.

Coupa, for example, reports that median spending increased 5.03% last quarter. Four more interesting data points:

1. Time saved on purchase cycles: Average purchase request approval cycle time dropped from 19.4 hours to 17.1 hours.

2. Categories showing increased spending: Telco & Internet Service, Technology Services, and MRO & Manufacturing exhibited greatest increases.

3. Categories showing decreased spending: IT Hardware, Marketing Services, and Transportation Services were the biggest losers.

4. Payment terms held steady: Virtually no change in average payment terms, from 31.87 days to 31.79 days.

Eventually, the software provider hopes that its reported data becomes a widely accepted financial index of corporate spending across all categories -- essentially, a look into spending behaviors that previously hasn't been available. Of course, the data is only useful to the extent that Coupa's customers represent a meaningful segment of the market at large. Still, it may be useful to see how your numbers stack up.

For Coupa's own customers, such an index may have more value. They can compare their actual data to the benchmark. Coupa promises to present 40 different benchmarks, most of which are transactional or operational. Companies doing procurement and spend management with more conventional systems, however, may have difficulty extracting the necessary comparative data.

There is no shortage of SaaS procurement and spend management players. Gartner identifies Verian Technologies, SciQuest, Puridium, Proactis, PurchasingNet, Periscope, Perfect Commerce, Ketera Technologies, ePlus, Elcom, BirchStreet Systems, Basware, Ariba, Epicor, SAP, Unit 4 Agresso, Lawson, Oracle, COA, Quadrem, Hubwoo, and COA, along with Coupa.

Maybe the most useful thing that Coupa does is not benchmarking but combining procurement and spend management, which should give the CFO better visibility into both. If nothing else, instead of sitting through two meetings to get data, it will take only one meeting -- or none. At best, it will help the CFO identify and possibly resolve problems through a single online screen with just a couple of clicks of the mouse. ###

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