As Coupa’s CFO, I get the opportunity to talk to a lot of my peers at industry events, and at customer and prospect companies. I’ve had a number of conversations lately with people about their ERP systems and plans to upgrade, re-implement, or replace their existing system. If that’s you, you are in good company. With the economy continuing to improve, it seems to me we are witnessing an echo of the pre-Y2K ERP adoption bubble.
An ERP project consumes a lot of organizational time and energy, and it’s something most companies would rather avoid. I feel your pain.
When I worked at Deloitte, I helped Fortune 500 companies implement SAP and PeopleSoft. As CFO both at Coupa and my previous company, I implemented new ERP systems so I know first hand how much stress this cause CFOs. Naturally it’s something we’d like to avoid. Ultimately though, your hand gets forced.
Maybe your company has grown to the point where your system can no longer handle the transaction volume you’re doing now. Maybe you want new functionality that isn’t available with your current system. Or, maybe your vendor is no longer supporting your version of the product.
Being on an unsupported version that works for you might not be the end of the world, but eventually something like your tax interface or your browser support will break so you need to be prepared for that eventuality.
So how do you decide to reinvest, upgrade, or go to something new? While it would generally seem to be easier to just upgrade to the latest version of your current product, I see surprisingly few organizations that take this option. That’s usually because of the level of customization of the product they are using requires a complex upgrade process, or because they have a desire to change business processes from those supported by the initial implementation.
That being the case, should you re-implement the devil you know, or take a risk on the devil you don’t? There may be some exciting opportunities open to you, and there’s also lot to consider.
If you’re facing an inflection point like this with your ERP system, here are some high level considerations that will drive the cost versus benefit of each approach:
In both of my ERP implementations as CFO, the benefits of a modern “best of breed” system used by peer companies outweighed the cost savings of re-implementing the old system. These were both high-growth companies, and I think many high-growth companies would come to the same conclusion. With fast growth comes significant business change, and there is usually an opportunity to make a truly transformational change with your ERP selection.
When you also take into account the company’s growth in resources -- both budget and people -- and the easier integration that’s possible with newer, more modern systems, the cost gap between reimplementing the old system and adopting a new one can be more easily bridged by the likely benefits.
The world changes; companies transform, and technology advances, requiring ERP systems to keep up as well. At some point, every company has to weigh the cost/benefit of change versus the status quo. The answer will be different for every company.
I don’t have all the answers -- just an inside view on some of the questions that a lot of smart people at forward-thinking companies are considering right now. What about you? What is your experience? Is there anything else that should be taken into account? Please share your thoughts.
During my long career in procurement, I worked withmany folks striving to get recognition, senior-level engagement and ultimately move to a higher level of the organization. I often saw the aspirations of these talented individuals frustrated because they weren’t operating in a way that was going to get them where they wanted to go.
Most companies can benefit greatly from the skill sets procurement brings to the table. So, what can procurement folks do to strengthen their position with CFOs, the finance team and business leadership so they can benefit themselves and their organizations? Operate differently.
A lot of it is attitude and approach. Too often, procurement is
Earlier this month, Procurement Leaders ran a guest post from Are eCommerce Network Fees For Suppliers a Barrier Too Far? in which he takes on the perennial controversy of whether network fees are a fair charge for value received, or a barrier to adoption.Forrester Research’s Duncan Jones titled
Jones supports the view that suppliers should pay for the value they receive, but with some caveats. He states, “In a market in which many networks are free to the supplier, procurement chiefs should consider whether that is the right approach for them.”
He says procurement chiefs should ask themselves three questions, which he considers at lenghth in his post:
Jones concludes that while both options are valid, companies ultimately
Earlier this month, we held a live “State of Coupa” webcast at recent results and highlights from 2013 and then we turned it over to the audience to have Rob take a crack at their most pressing questions. Here is one.our headquarters in San Mateo featuring CEO Rob Bernshteyn. We went over our most
Q: What do you see technology enabling in the next five years in the terms of purchase-to-pay processes?
Rob: A lot of systems, whether they be CRM (Customer Relationship Management), HCM (Human Capital Management) or in what we call the spend optimization or financial applications area, today are systems that take data in and pull data out. They take transactional data in and then show it with some analytics around it. That's really very interesting and it's part of the information revolution.
My view is in the next five years, we're going to be transitioning to more of a knowledge revolution. These systems are not just going to be pulling data and
What exactly does it mean for procurement to be strategic?There are a lot of things wrapped around that, but at a high level I define it as being engaged with your colleagues within the company, being perceived as a valuable resource and ultimately, being decision makers—people who can say yes as well as no.
To do this, procurement people need to take themselves out of governance-type mindsets where they sit back and wait for people to come to them with something that they want to do. They need to get out and engage with the business to see how they can help. They need to take a more customer service- oriented approach. Here’s an example.
At one point in my career, I was in an organization where procurement was set up in charge-back mode, so the business units had to pay for our time. This organization wanted the overhead areas to
Last month Coupa released PayStream Advisors' seventh annual Electronic Invoice Management: A Move to the Middle is based on a survey of 300 AP and procurement professionals at U.S. based companies ranging in size from $250 million to $2.5 billion in revenues.look at the “state of the state” of eInvoicing use. The report,
We chatted with Henry Ijams, one of the principal researchers, to get his view on the results of the survey and what the key takeaways are. Henry has been following the eInvoicing marketplace for the past twelve years.
Coupa: What’s new in this year’s report?
Henry: We're seeing more activity in the upper-middle market, especially from organizations that have not previously participated in EDI or enterprise-level automation. What’s
Undertaking any kind of business transformation involves changeand change always introduces risk. Careers, cash and your company’s competitiveness are at stake. The key to a successful transformation is proactive risk management.
There are two areas of risk: that which you control internally, and external risk associated with vendors and partners—whom you’re buying software from, who’s implementing it, and so forth.
Internal risk can be controlled by having well-defined goals and KPIs, having strong executive sponsorship, and putting governance and change management processes in place. Everybody knows and recognizes these are good things, like motherhood and apple pie. Putting these into practice is
There are only two ways a company can increase profitabilitythinking more like sales.—make more money or save more, and the two are equally important. I've written previously about how one of the ways procurement can become more strategic is by
Salespeoples' sole job is to go out and bring in money. They forecast, they measure and salespeople get paid in part on their revenue contribution. Procurement needs to think like sales in that they need to make pursuit of the dollar saved the driving force behind all of their activities.
The other part of this is that salespeople have a quota to meet—a big fat KPI staring them in the face on the first of every month, and it’s not too difficult to measure their performance against that.
Naturally, they think and behave differently than people on the spend side because
Reading supplychain.com recently, I came across this ten point procurement fraud prevention checklist by Paul Guile, a CIPS global procurement fraud advisor from across the pond. Paul outlines some basic best practices that your organization should put in place if you haven’t already.
I want to recap and add to Paul’s list, because while his list is a great starting point, most of the fraud I’ve seen in my career did not and would not have shown up solely through following these best practices. There is still more you need to do. Here Paul’s list:
1. Ensure the risk of procurement fraud is acknowledged on your company risk register, and there is a risk owner who has overall responsibility in the organisation.
Earlier this month, we hosted a webinar on managed travel with Charles Bacharach of Orbitz for Business and our own Tony Darugar, Product Manager for Coupa Expenses. Back in April of 2013 Coupa bought a travel and expense management company called Xpenser which Tony founded. We thought we’d take the opportunity to properly introduce you to Tony, who has quite a passion for expense management.
I believe the best business are born from scratching your own itch,and in my case the itch, managing my expense reimbursements, had gotten to be very painful.
I lived in San Diego but worked primarily in Los Angeles and the Bay Area - in a typical week I had multiple flights, train rides, hotels, lunches, coffees, and plenty of other miscellaneous expenses to submit. The expense management tool we were using was painful and time consuming, and as the project I was working on got more intense I just didn't have the time or patience to deal with it. So I kept putting it off.
My wife is a financial planner. She’s very good at cash management, investment options, and keeping on top of things. She kept telling me to submit my expense reports, and as much