7 Ways Procurement Innovation is Fundamentally Changing Spend Management

1. 7 Ways Procurement Innovation
is Fundamentally Changing
Spend Management

2. Innovation
in·no·va·tion
noun
 the act of innovating; introduction of
new things or methods

3. Why is innovation so important?
 Innovation is what moves us forward to be able to:
 Be more efficient
 Be more effective
 Save (time, money, lives, etc.)
 Improve quality
 Make new discoveries
 Stay on the cutting edge
 Be thought leaders

4. Innovation has redefined everything we do!
How wewe travel
we we shop
How we buy
HowHowcommunicate
How commute
How we power our lives
VS
VS
VS
VS

5. E-Procurement 1.0
 Improved efficiency and handling
 Took what was being done on paper
and put it online
 Reduced the need for manual
intervention
 Automated basic workflows like
requisition approvals
 Introduced supplier networks
 Basic integration into certain systems
like ERP

6. Stalled Innovation
 E-Procurement 1.0 required a robust technological
backbone
 Quarters-to-years to implement
 Delayed time to value
 Limited ability to prove ROI
 Teams of resources to setup and maintain
 Technology and market conditions stalled innovation
 Dotcom bust
 Technology skepticism

7. Introducing the Cloud & Web 2.0
 More applications and innovation that have once again
redefined the way we…
 Communicate (social networks, blogs)
 Get information (RSS, newsfeeds)
 Shop (online auctions, name your own price, supplier
aggregators)
 Manage and maintain applications (less software, less
hardware)
 And it is redefining the way that procurement, purchasing
and sourcing organizations work

8. 7 Innovations That Are Changing Procurement
1. Take the best from Web 2.0 to drive adoption
2. Leverage the power of the crowd to save even more
3. Notify the right people to prevent overspending
4. Educate employees as they buy to increase compliance
5. Integrate and collaborate between systems
6. Demonstrate real results and value
7. A single platform for controlling all indirect spend

9. Innovation 1
Take the best from Web 2.0 to drive adoption

10. The Status Quo
Enterprise software has to be hard
 Designed for functionality, not usability
 Requires hardware, software and IT to support
 You need to be a highly trained expert to use it

11. Disruptive Innovation
Enterprise software can be as easy as
consumer software
 Web 2.0 introduced a new generation of applications that
 Are more user friendly and user focused
 Puts power in the hands of the end user
 Makes it easier and faster to share information
 Provides a forum for anyone to say anything

12. Impact on Procurement
1. Easy to use, familiar experience
 As easy to use as performing a
Google search
2. Solutions that empower users
 One set of results provide purchase
options across all channels
3. Take advantage of global
suppliers and deals
 Easily purchase from any supplier
within the process

13. Innovation 2
Leverage the power of the crowd to drive adoption

14. The Status Quo
Only professional buyers can source
good deals
 They are the most educated on suppliers in the space
 Have the skills to negotiate favorable terms and prices
 Are able to manage the process to choose the right
supplier for the right purchase

15. Disruptive Innovation
Anyone can find a good deal!
 Online world changed the way we buy – personally and
professionally
 Buyers – not sellers – are in control
 No more global boundaries, you can buy from anyone at
anytime
 Improved tools for comparison shopping, naming your
price, etc.

16. Impact on Procurement
1. Employees are skilled bargain
shoppers
 They bargain shop in the personal lives
2. Employees are “experts” on what
they need to get their job done
 They know what they need and who
niche suppliers in the particular area
3. Procurement does not have to be
involved in every single ad-hoc
purchase
 Employees can buy from any source
through the process

17. Innovation 3
Notify the right people to prevent overspending

18. The Status Quo
Too little, too late information
 Hard to access, disjointed data
 Manual processing to calculate key metrics
 Received once action has already been taken

19. Disruptive Innovation
Real-time data means real-time results
 Faster access to data necessary for smarter business
decisions
 Instant access lets you know what is happening at that exact
moment
 Proactive, customized alerts keeps you abreast of important
things as they happen

20. Impact on Procurement
1. Be in the know in real-time
 Email and mobile budget and spend
alerts
2. Understand consequences
BEFORE taking action
 Know the budget impact before you
decide to approve
3. Stay on track and on budget
 Predict spend based on historic
trends

21. Innovation 4
Educate employees as they buy to increase
compliance

22. The Status Quo
Policies are created, but often ignored
 Published in paper manuals or company intranets
 Information not easily accessible during purchase
 Employees are trained once

23. Disruptive Innovation
Empowerment, not only enablement
 E-Procurement empowers users beyond just filling out a
form
 Use the process as a chance to educate employees on how to
buy and from where to buy
 Get end-users involved in providing feedback on suppliers and
product quality

24. Impact on Procurement
1. Employees are educated as they
buy
 “How to buy” policies are accessible
WHEN they buy
2. No more excuses for not knowing
 Inline alerts let users know if they
are missing information
3. Share your experience
 Automated requests encourage
users to share their feedback

25. Innovation 5
Integrate and collaborate between systems

26. The Status Quo
Procurement has e-procurement, accounting
has ERP, employees have order forms, etc.
 Multiple, disparate systems
 Limited ability to work across departments
 Forces manual intervention

27. Disruptive Innovation
Faster, easier, cheaper integration
 More common, compatible platforms and technology
 Out-of-the-box system connectors
 Open APIs for integration with key systems
 Automatic data flow between systems
 Users continue to use existing systems with little disruption

28. Impact on Procurement
1. Eliminate the need for manual rekeying of data
 System synching automatically passes information from system to
system
2. Continuous information and process flow between
departments and systems
 Customizable business rules, approval workflows, invoice tolerance
matching, etc.
3. Accelerate the time to value in other investments
 Extend the power of your existing systems through integration

29. Innovation 6
Demonstrate real results and value

30. The Status Quo
Procurement is a necessary function, not
a strategic asset
 Spending-centric vs. savings-centric
 Things HAVE to be bought for business
 Use it or lose it planning and budgeting

31. Disruptive Innovation
Procurement is critical to company
success
 Procurement has the power to drive real efficiencies and
savings
 True process automation with flexible workflows for quick changes
/ corrections
 Data / feedback to identify the best suppliers, terms and deals
 Greater visibility and control to eliminate wasteful, unapproved
maverick spending

32. Impact on Procurement
1. Procurement is focused on savings –
not spending!
 New tools, resources and insights
narrow in on where savings can be
obtained
2. Real-time process management and
changes
 Easily add / remove people from
workflows or change limits based on
roles, responsibilities and behaviors
3. Comparative benchmarks
 See how you stack up to similar users,
other companies and the competition

33. Innovation 7
A single platform for controlling all indirect
spend

34. The Status Quo
Purchases are managed through one
system, expenses are managed through
another
 Unable to get view of all spend against a specific budget
 Have to rely on finance to provide spend insights
 Two separate systems to pay for, two separate systems to
maintain
?

35. Disruptive Innovation
Multi-tenant, cloud computing
platforms
 Support multiple roles, workflows and applications
through a single platform
 One line of code means always the latest release and innovations
 One platform equals one database for comprehensive reporting
 One system for users to access, one process for approvers to
manage

36. Impact on Procurement
1. One system to drive 100% budget
compliance
 Purchase requisitions and expense
reports managed from a centralized
system
2. Consistent user experience
 Same easy-to-use interface for
requests and approvals
3. One system to maintain
 One system to upgrade, keep
information current and to train
employees on

37. Innovation in Action
Demo

38. Summary
 Innovation is key to improving and moving forward
 7 recent innovations have radically changed procurement
1. Take the best from Web 2.0 to drive adoption
2. Leverage the power of the crowd to save even more
3. Notify the right people to prevent overspending
4. Educate employees as they buy to increase compliance
5. Integrate and collaborate between systems
6. Demonstrate real results and value
7. A single platform for controlling all indirect spend
 Move to the cloud to get the latest and greatest
 Cloud technologies make it possible to stay up-to-date without upgrade or IT
headaches

39. Q
&
A

40. THANK YOU!
Rob Bernshteyn Mark Carlton
Chief Executive Officer Director, Solutions Consulting
rob.bernshetyn@coupa.com mark.carlton@coupa.com