Let users / requestors do the hard work for you when evaluating suppliers!

As procurement professionals, you get to evaluate supplier performance every so often.  Typically, these evaluations are based on easily available factors such as pricing, business volume.  Information such as quality, customer service and timeliness is hard to collect and hence it is taken into consideration depending on availability.  Clearly, such evaluations do not give you a full 360 degree view of a supplier’s performance plus you get to do all the hard work yourself.

Example of supplier ratings from Coupa’s cloud based eProcurement platform

Admittedly, gathering qualitative information is difficult. However, this is a case where the dictum “don’t work hard, work smart” applies perfectly.  Instead of carrying the burden of gathering such information on your shoulders, you can offload it to users / requestors.  The benefits are obvious – first of all, you get a first hand view from users about the quality, customer service, timeliness etc. Secondly, with that kind of an input, you are easily able to filter out problem suppliers and focus your efforts on suppliers who rank high in terms of both cost effectiveness and quality.

How do you involve users?  The best way to involve users is to harness their community spirit.  Encourage or even require users to “rate” a supplier.  This is very much like ratings for items and vendors you see on Amazon and eBay.  Wouldn’t it be great if you can see the ratings on your suppliers any time just the way you see them on Amazon or eBay ?  Perhaps you are wondering, this all sounds good and it’s one thing for Amazon or eBay to do it, but can I do this?   The answer is an emphatic YES – you can do this in no time and that too without breaking your bank. All you need is a truly cloud based eProcurement platform.  One more reason why they are being adopted so  rapidly!

Coupa’s still living, and thriving, in the Cloud

About a year ago, when the frenzy around “Cloud Computing” reached mainstream media, my colleague Noah Eisner (Founder, VP of Product) wrote a post on the many ways we here at Coupa are living in the Cloud on a daily basis. Fast forward a year and the topic is still just as relevant, we still operate nearly exclusively in the Cloud, and our entire infrastructure remains 99.9% Cloud-based.

Add to the above the 30+ blog posts I saw in recent weeks debating the best Cloud and SaaS apps available, and you’ve got my inspiration for this blog post. I figured it might be time to share the list of Cloud applications we use each day to get our jobs done. (No box software on-premise installations here!*). My hope is that it might inspire other businesses to run their business in the Cloud.

How We’re Wired in the Cloud:

1. Coupa Cloud Spend Mangement:  We (of course) use our own Cloud Spend Mangement platform in-house to manage our purchasing and expense reporting needs.  Coupa’s CSM platform features a single user interface, a single workflow model for approving purchases and reimbursable expenses, a consistent chart of accounts, and one set of budget entries against which to credit purchases and expenses.
2. Amazon Web Services to host our website and develop our application on RoR.
3. Google Apps for business productivity, email, wiki, calendar, etc.
4. Evernote for collecting and managing notes and to-dos via mobile device.
5. We manage our customer relationships with Salesforce.com (This is a given. Salesforce is also one of our happy customers.)
6. Pardot: Marketing automation and demand generation.
7. DropBox for large cloud-based file sharing.
8. Amazon Relational Database Service (Amazon RDS) is a web service that makes it easy to set up, operate, and scale a relational database in the cloud.
9. BeanStalk for Source Control: Beanstalk is used by software teams, developers, and web designers who don’t want the hassle of setting up and managing their own Subversion or Git server.
10. Zendesk: Customer help desk & bug tracking. A customer favorite!
11. New Relic (RPM): on-demand tool more than 3,000 companies use to monitor and troubleshoot Java and Ruby apps. 
12. PBX (phone system)FirstVoice™ VPS-PBX is our hosted Voice over IP PBX virtual phone system solution for businesses that wish to enjoy the features and functionality of IP telephony without the costs for proprietary hardware, per-user licensing, IT personnel, and ongoing maintenance.
13. PayCycle by Intuit: Provides Payroll to SMBs via its SaaS architecture.
14. Hoptoad: Applications errors tracking which acts as an intermediary between your Rails application exceptions and your email inbox.

Now, this isn’t an exhaustive list, we have more Cloud-based apps in our daily Coupa lives, but these are the biggies. Our local software is few and far between but there are some copies of Omnigraffle and Photoshop laying around, as well as Quickbooks.   (Quickbooks Online was not up to snuff for our needs, but we’ll move over as soon as it is Mac-ready and online bill pay-enabled.)

I hope this is helpful. Let us know what you and your company use in SaaS/Cloud apps by leaving a comment. We want to know what the favorites are.

Around the Coupa offices, we like the phrase “Show, don’t tell”. And Thursday’s Cloud Spend Management (CSM) debut webinar was a testament to this. Coupa’s very own VP of Marketing, Jason Hekl, gave the presentation–an all-inclusive introduction to the CSM platform. He really got into the guts of the applications, presenting demonstrations of the products (both e-procurement and expense management) that broke down the functionality in digestable bits.

Jason showed how companies can manage both indirect spending streams and expense spend from a single platform built atop a common approval work flow model, a single chart of accounts, and consolidated reporting dashboards and performance benchmarking. And he spoke to the benefits of managers having these tools and insights they need to at their disposal. Simply put, managers can more effectively control the company’s spending as it occurs.

The live webinar is over, but you can watch the archived presentation here. You’ll get a chance to see how the cloud is empowering companies to get 100% of indirect spend under control.  And it won’t just be all talk. You’ll get actual how-to’s that you can easily replicate within your organization.

Watch the free Cloud Spend Management webinar now.

Screenshot of a user crowd sourcing Overstock.com inventory.

It’s naive to think a few individuals in the procurement department can single-handedly negotiate contracts that will always ensure the business gets the best price. With a few exceptions, business and information moves too fast for that to be realistic. The better strategy is to rely on the wisdom of the crowd to source the best deals and drive savings for the business.

As information proliferates over the web, and more and more markets become increasingly transparent, pricing has become more scientific. Think airline seats. Don’t like the price of your aisle seat? Just wait ten minutes and check again, the price may well be different this time around.

Employees have always looked upon the purchasing department and preferred supplier agreements with suspicion. They know, especially now that they can often find better contract prices with a basic amount of research online. Let’s face it–the information is out there. And there’s no way to stop it. Spend management initiatives build around a ‘need to know’ mindset that controls the flow of information are doomed to fail. There’s just no way to hold back that wave. So don’t.

Ride the Wave Instead! Leverage tools that allow empoyees to “discover and share” online money-saving purchasing opportunities as part of their requisition process. Download the free e-book How to Cut Costs in the Cloud, and get the details on how to crowd source savings, and for other cost-cutting best practices.

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This post is excerpted from the free Coupa ebook How to Cut Costs in the Cloud: 5 Spend Management Best Practices for 2010. Look out for more best practice tips next week, or download the full ebook here, at no cost.

Best Practice #1: Skip the surveys, and benchmark against real transactional market data.

In general, business performance is about beating your objectives, trending in the right direction and doing it better than your competition. Without real data, it can be very difficult to measure your performance, particularly relative to others in your industry, or perhaps even relative to another division within your organization.

To date, benchmarking for the industry, both in terms of commodity pricing and the efficiency of the procure-to-pay process, has been based entirely on comparison to survey data collected by consultants and analyst firms. Neither represents a true representation of companies’ procure-to-pay transactional data.

An Accurate, Real Time View of Spend Performance

Enter cloud computing and the incredible power of the network effect. Cloud computing applications with a true multi-tenant architecture offer an inherent advantage over premise-based solutions, and even their single-tenant on-demand (hosted) alternatives, because they enable the aggregation of data across the network or platform. For Coupa, that means aggregating the billions of dollars in spend through its platform into transactional benchmarks for more than 30 key performance indicators. Companies can opt-in to the program to measure their performance, both against prior periods’ performance, and against the market benchmarks, providing a real-time report card and true visibility into the effectiveness of the company’s savings programs. Based on actual transactional data through the system, companies can use the benchmarks to determine their performance relative to the broader market on metrics including:

-Savings as a percentage of spend

-Average requisition approval time

-Percentage of requisitions rejected

-Percentage of purchase orders revised

-Percentage of non-matched invoices

Consider the Potential Ramifications of Benchmarks

What if you learned that, on average, turnaround time from requisition to approval took two hours, while at your company the average is three days? Wouldn’t you consider simplifying the work flow and approval routing process at your company so that employees can get the goods and services they need to do their jobs faster? How much administrative burden and expense would that eliminate?

Readers: Do you currently manage spend in the cloud? Share your best practices in the comment section. We’d love to hear from you.

Following our successful web seminar with The Container Store on Dec. 10, we invited David Howard, the Director of Central Purchasing at Reebok-CCM to share an inspiring story of how he single-handedly brought $15M in non-product purchasing spend under control at his organization, despite facing obstacles at every turn.

An audit created a sense of urgency around David’s need to quickly get the $15M annual spend in non-product purchasing under control. Money was being spent without proper approvals, the invoice matching and approval process was messy and manual (imagine AP chasing managers down the hallways, to no avail). Late payments resulted in late fees, and multiple ordering and payment systems rounded out inefficiencies in the overall purchasing process.

Worst of all, senior management wasn’t bought into the idea that Reebok-CCM even needed purchasing automation. They believed tighter manual controls would be sufficient to control spend. But our spend samurai, David, knew that it was time for a change, and took the lead on driving an e-procurement initiative.

David shares the strategy and tactics he used to secure management support and get the green light to implement an e-procurement system and get Reebok-CCM on a path to smarter spending. Ultimately, his automated procurement initiatives led to impressive results like:

• 10-15% cost reduction through SKU & supplier consolidation
• 20% reduction in suppliers through consolidation
• 30% reduction in invoice payment transactions
• High compliance to use of contract pricing
• Process savings estimated at $50/PO, primarily from invoice approval process
• Payment discounts now available in 100% of invoice opportunities
• Accruals changed from guessing to firm numbers

I can’t really do justice to David’s story here; it’s a non-stop thrill ride with twists and turns that will keep you guessing. Plus, it’s a fantastic cheat sheet for other businesses that may be going through similar woes with their unwieldy requisition-to-payment process, so I definitely recommend viewing the full webinar, below. Check it out, all you aspiring spend samurais! I know you’re out there. And once you’re done with that one, take a look at a few of our archived webinars here.)

Last week’s ISM webinar Containing Costs: A Lesson in Smarter Spending featuring The Container Store was such a hit, we could hardly keep a lid on it. (Note: Forgive the bad pun—the allure for word play here is simply too tempting.)

Scott Jones and Mike Morrow got very specific in describing how they used e-procurement to gain control over the centralized ordering and inventory processes for managing non-merchandise supplies for each of The Container Store’s 47 locations.

You can get the full details on how The Container Store found new ways to save by dowloading the entire webinar, below. Yes, it’s free. And yes, you can fast forward through parts that don’t apply to your use case. But I highly recommend watching the webinar to see if their cost-cutting lessons may work for your company. For the record, here are some highlights of their impressive results. They:

-Eliminated 36 hours a week of manual rekeying

-Cut the number of weekly purchase orders in half

-Reduced the number of SKUs held in inventory by 62%

Nearly 1,200 people registered for this webinar, and the attendees were full of questions for Mike, Scott, and our very own Marketing Guru here at Coupa Sotfware, Jason Hekl.

Even if you slept on making it to the Container Store live event, you can still make it to Wednesday’s Supply & Demand Chain Executive webinar Urgent Purchasing with Reebok: How One Procurment Professional Took Matters into his Own Hands to Get Spend Under Control. It begins at 11AM PT, 2PM ET, and is a free, streaming event. In this one, Reebok-CMM’s Purchasing Director will speak to how a merger financial audit spurred him to act on quickly implementing a spend management process.

Download the Containing Costs with the Container Store Presentation here: