In my last article, I wrote about why worries about integrating cloud-based Software as a Service (SaaS) should be a thing of the past if you’re dealing with a true cloud vendor.
In a true cloud SaaS offering, the vendor does not customize their code to customer requirements. So, with every integration, they are integrating something familiar and unchanging on their side to whatever the customer has.
If the vendor has custom code, then all bets are off; then they’re integrating two custom systems and it is a custom integration, subject to all the risks and problems thereof, and not a true cloud offering.
The dividing line is code. A true cloud SaaS offering is written on a single code line. Customers can configure the software every which way, but they cannot customize the code for their businesses or to install it on their own servers. Consistent code makes maintenance easier and lets the company focus on innovation. Coding for cloud-only delivery lets the vendor design for super-efficient, secure, and scalable operations. Therein lies the meat of thecloud SaaS value proposition. Customized code is the fastest way to descend from the clouds and head in the other direction.
If you’re already convinced, you can stop reading right there. If you’d like to understand exactly what I mean by “single code line” and why it matters so much, read on.
Why a single code line matters
Imagine you run a 200-page website and you have a simple footer that is the same on every page. It has your address and phone number, copyright, and maybe a few other pieces of information. You’ve seen this type of footer many times.
Let’s say you want to make a change to your phone number. You go to where your footer code lives, you change the phone number and the new phone number appears on all 200 pages. This is possible because you have a single code line for your footer.
On the other hand, let’s say HR wants a customized footer. Their reasons are very compelling, so you give it to them. Legal sees that, and then they ask for some customizations on different footers around the site. Then marketing gets wind that there’s a custom footer opportunity and they want one too. Now instead of just one file in a central place that defines the footer, you have multiple footers in multiple places and life is a lot more complicated.
Now if you want to change your phone number you have to go to each and every place to make that update. You have to create some way of keeping track of all those places to make sure you don’t miss any. And then you find one that is different and then you can't remember why it is different. So can you update it to the new version or not? Confusion ensues. Now you’re spending time and resources keeping track of all these versions, instead of creating fresh web content.
The plot thickens
That’s a very simple example, much simpler than what happens with software, but you get the basic concept. Let’s make our analogy a little more complicated.
If your footer just has text in it, that’s data. Let’s say it also has some links in it, maybe to your “About Us” page. Now you have both data and functionality; the text is data and the links actually do something. If you start customizing your footers, you will have both data and functionality spread all over the place, which is similar to what happens once you start down the path towards customization in a software development environment.
In software, the functionality and the way that the data is stored are two different things but you want to have them uniform across all the customer implementations of the software, the same way you’d want a single footer across all your web pages - so you can make your updates in one place and have them go everywhere.
That’s why if you’re a webmaster you don't allow people to monkey around with the footer, and why you can’t really lay claim all the advantages of SaaS if you start doing custom code. You lose all the efficiency, scalability and cost advantage of the single code line. This is the road to hell for a SaaS company. It’s not just integration that becomes considerably more time consuming, difficult and expensive. Everything does.
A scalable model
The SaaS subscription model only works when you can sell the same thing to a lot of customers. SaaS companies aren’t collecting big up-front fees. They’re investing a lot in R&D, but for the business to be viable, they have to sell the resulting product over and over again. If you start building code that is only used by one customer, you’ll ruin your financial model.
Still, there are plenty of SaaS companies who do this. The main reason is short-term gain. It’s very tempting if someone offers you a million dollars to have any footer they want on their webpage to take the money and worry about this scale problem later.
It’s all cool until you have to change something and you realize you can't because you’ve created all this complexity. Meanwhile you spent the million dollars and now you have some pretty big, hairy problems that need solving.
We’ve talked about what it really means to be a true cloud SaaS company at every one that I’ve been with, and I think this is what it boils down to: You have to be committed to maintaining that integrity, that single code line, or you’re not a SaaS shop, you’re a custom development shop and that’s a completely different business model and you can’t claim all the advantages of a true cloud SaaS offering.
Those typically include lower up front costs, lower total cost of ownership, easy access to frequent software upgrades, easy deployment across multiple locations and fast, easy integration, which is where I started this whole discussion.
Why is it so much harder to integrate custom code? It’s a bit of a stretch to extend our single code line website analogy to integration, but here goes: Integration is all about getting information from one system into another. So, if you have a footer consisting of two sentences and you want to send that information to another footer via integration, that will be easy as long as you have a two-sentence footer on the other end. But say some of your web pages only have a one-sentence footer, and you built your integration to send the second sentence. Your integration is going to break, because the expected data format isn’t there.
Now in reality, you would probably know when you are building the integration that you have some complexity to deal with, so you have to invest time and effort in managing it. This is what makes an integration more time consuming, costly, complicated and prone to errors. But, if you’re dealing with a true cloud solution, integration should not be a big concern. So if you’re buying SaaS, you should make sure it’s true cloud SaaS. Don’t take any wooden nickels.
Jake Adger is Director of Product Marketing at Coupa.
Some times it seems the more things change the more they stay the same. This week we shared articles about things that have changed – and not changed – in procurement in the past decade; Deloitte’s annual CPO survey, KPMG’s cloud survey, Procurement Leaders’ 2015 prediction series, and a report on delays in government procurement that haven’t changed, but the depth and breadth may surprise you.
Procurement Changes in Past 10 Years - My Purchasing Center
My Purchasing Center’s Susan Avery’s demographic survey of the procurement industry shows many constants over the years - mostly related to age, gender makeup, and professional experience. What’s changed the most? Technology, and also the level of education and responsibility: 54 percent or procurement professionals hold at least one professional certification, compared to just 21 percent in 2003. Additionally, 40 percent now report to the CFO, up from six percent ten years ago.
The Deloitte Global CPO Survey 2014 - Deloitte
Good thing the level of education and qualifications are going up. In the latest edition of their Global CPO Survey, Deloitte says procurement professionals will have to ramp up their efforts, as the rebounding global economy will drive spending to new heights. Survey says, the procurement function will need to become more rapid, efficient, and innovative to keep up. And even though levels of skills and education have improved, there’s still a talent shortage.
Technology Predictions For 2015 - Procurement Leaders
Coupa’s own Darayush Mistry contritubted to part 3 of this multi-part series from leaders at top procurement technology companies on what to expect in procurement tech this year. Check out the whole series, with contributions from Mickey North Rizza, VP strategic services, BravoSolution and The Smart Cube’s Mark Bjedov and Mayank Taneja.
Inside the pain and peril of procurement delays - Washington Technology
For those of us happily insulated from Washington D.C.’s procurement landscape, it can be easy to forget what a ponderous process contracting for the government can be. This piece by Washington Technology’s Nick Wakeman reminds us. Nearly 90 percent of government contractors surveyed reported frequent delays, often in excess of six months. Most surprising: the scope of the delays – less than 2 percent of respondents had never experience a delay – and their general acceptance. Government customers often provide no reason for delays and act as though they are expected and unavoidable, Wakeman found.
In their annual survey of cloud computing trends, KPMG found that businesses now look to the cloud to drive more than cost reductions, Louis Colombo reports in Forbes. While reducing cost inefficiencies remains the top priority, alignment with customer success and usability is a growing focus. Expect this trend to continue as cloud computing continues to grow. And grow it will: The public cloud market is expected to reach $191 billion by 2020.
Last year, Coupa joined up with the User-centric IT movement, a group of companies dedicated to creating technology that puts the needs of end users first, allowing them to work the way they want, without getting in their way. User-centric is bit of a mouthful to say, but it’s actually a very simple concept.
We’ve all had experiences with technology that works “technically” but as a practical matter makes your life harder. Remember the clocks on VCRs? Setting the time should have been easy for anyone, but did you ever see one that did anything but flash 12:00, 12:00, 12:00? Not user centric. Or the original Xbox, which launched with a controller so big and clunky it made playing a video game frustrating. It seemed to have been designed by a committee that had heard of human hands, but never used them. Also not user-centric.
E-sourcing is a must for the modern sourcing professional, but sometimes it falls by the wayside due to the press of business. Running an e-sourcing event is a great reminder that the time and money you save with e-sourcing makes it well worth investing in mastering the process.
Such was the case with an e-sourcing event I recently helped run for a large U.S. services company. They needed to replace the copiers in 2,000 locations across the country over the next few years, at a cost of a few million dollars.
The team there had dabbled in e-sourcing in the past with positive results, but still mostly relied on Excel and email for sourcing management. With copiers being one of their largest areas of indirect spend and the current contract about to expire, they decided to take part in Coupa’s QuickStart sourcing program. Through the program, Coupa Procurement customers get a free 30-day trial of our sourcing module, along with free expert assistance to launch their first e-sourcing event using the tool.
We’re about 15 years into cloud computing now, and one thing that’s become clear is that even with the proliferation of cloud solutions, on-premise software is not going away anytime soon. That means cloud solutions have to integrate with on-premise systems, especially with ERP. This has been the case since Salesforce burst on the scene in 1999, and over the years, cloud providers have become integration ninjas. Today’s cloud solutions can easily integrate with just about any on-premise or cloud solution.
However, many people continue to believe that integrating with cloud solutions is risky, expensive and unreliable. This is simply not the case. These fears are largely founded on past non-cloud integration traumas, either experienced first hand or heard about second hand. A quick search for integration failures in enterprise software turns up a litany of past failures and lessons learned, such as PC World’s 10 Biggest ERP Software Failures. Past experiences integrating non-cloud solutions have little or no relevance to today’s leading cloud providers.
Sequential invoice processing—paying invoices in the order they come in--is the default practice for many Accounts Payable organizations. But is it a best practice? No, because it eliminates the ability for AP to be strategic, and potentially save millions of dollars.
Here’s why: If your AP department is processing invoices sequentially, you're operating under the assumption that every invoice is equally important to your company. That's simply not the case. Invoices with pre-negotiated early pay discount terms or dynamic discount payment offers associated with them are exponentially more important to your company. It makes sense to do everything you can to process those invoices faster so you can get those discounts.
Hello 2015! It’s a new year, and you know what that means: overcrowded gyms, discarded Christmas trees lining the sidewalks, and of course, folks looking into their crystal balls to try to divine what the year ahead will bring. Last week, Coupa vice president of product development Darayush Mistry shared his thoughts on where procurement technology will head in the coming year.
Today we look beyond our four walls at what analysts and industry leaders have to say. One thing looks certain: With the economy looking up, 2015 promises good things for those tasked with powering business processes.
It’s January, and that means we’re getting ready for Coupa Inspire, this coming June 2-4 in San Francisco. Food is being tasted, DJs are being auditioned, speakers are being recruited and sponsorships are on sale now. Save the date because this is one event you won’t want to miss!
This will be our third Inspire, and over the past two years we’ve set a pretty high bar for ourselves, and we’re determined to leap even higher this year. Last year nearly 800 Coupa customers, partners, prospects and employees came together for two days of inspirational keynotes, learning, networking, and celebration – everything you’d expect from a user conference, but with some extra Coupa touches.
It’s that time of year again – prediction time. Prompted by these questions from Procurement Leaders, Darayush Mistry, vice president of product development for Coupa, peers into the future of procurement technology for the coming year.
Q. How do you think the expectations of customers will change in terms of what they’re looking for from procurement technology solutions in 2015?
Customers will look to take a more holistic approach to procurement with tightly integrated spend management solutions that make the function more strategic. Expectations for greater transparency and control will rise as customers become more sophisticated in the use of analytics for predictive and proactive spend control.
In yesterday’s post, I explained why it’s become a competitive imperative for companies to get smarter about sourcing contingent labor. Today I’ll explain how.
There hasn’t been a lot of transparency around pricing in the past, which has made applying sourcing rigor difficult. But, that is changing. There are ways to get this information, and companies need to then take that information and adapt some of their internal HR processes to be able to compare price and quality and make smarter, more strategic decisions about contingent labor.
Getting accurate pricing
One of the reasons we don’t have transparency is that up until now companies have mainly dealt with contingent labor through temp agencies and placement services, which have mostly dictated prices. The delta between agency bill rate and worker pay rate can be considerable, and it’s tough to know what the real going rate should be, how it is trending and how much above or below market you are paying.