Of Toast and Technology: Delivering Value as a Service

The hotel industry is providing Coupa CEO Rob Bernshteyn with a lot of great Coupa Inspire keynote material.

In last year’s talk, a deluxe executive suite shower with so many features as to render it unusable became an illustration of how enterprise software vendors have come to the end of the road with feature function, but haven’t achieved usability—or success.

This year, a room service fiasco helped him illustrate what he sees as the next evolution of technology, and of Coupa: Value as a Service.

What is value to a waist-watching, gluten-avoiding CEO heading into a day of back-to-back meetings starting at 8 a.m.? A room service breakfast of black coffee and oatmeal, delivered promptly at 7:15 a.m.

What he got instead: Oatmeal and assorted toppings, coffee, water, cream, milk, lemon wedges, two tiny jars of jam, a basket containing eight slices of toast, a fork, a knife and no spoon, delivered at 7:55 am.

The point: It’s time for every business—hotels and enterprise software included--- to rethink value--what it is and how they go about delivering it, said Bernshteyn. It’s something he’s thought about at book length—an advance copy of his forthcoming book, Value as a Service: Embracing the Coming Disruption was placed on every chair in the grand ballroom where he delivered the keynote and the overflow room where attendees watched on the big screen.

The basic premise of value as a service is that customers should no longer have to worry about the how—the underlying processes, features and functions that deliver value. They should only have to worry about the what—the outcome they are trying to achieve--and let the vendor do the rest. “We’re not a product company,” Bernshteyn said of Coupa. “We’re a value as a service company.”

Selling an Outcome

That idea was echoed throughout the morning by speakers and panelists in the main stage sessions. “You don’t sell products any more,” said R "Ray" Wang of Constellation Research, speaking on the analyst panel. “You have to sell an outcome.”

“We’re recommending that source-to-pay be designed with more focus on benefits realization, and less on feature function,” said panel leader Bhargavi Khosaraju, director, operations advisory, KPMG. Executives on the panel from AON and CapitalOne detailed how they followed her guidance to achieve measurable value from their Coupa deployments.

Technology underpins value as a service of course, and Bernshteyn hinted at product innovations utilizing machine learning, data analytics and smart benchmarking to push Coupa further in that direction. In spend management that could mean things such as serving requisitioners personalized recommendations instead of an entire category of a catalog, and automatically fixing missing or incorrect invoice fields.

Peak Toast

In hospitality management, analyst Dana Gardner of Interarbor Partners playfully imagined a scenario where sensors on toast baskets provide data on uneaten toast so room service managers can determine the correct number of slices of toast –if any--to deliver with a cup of oatmeal.  

In these scenarios, “Machines and technology don’t replace people. They allow them to ask the right questions and extract data in order to support decisions,” said Gardner.

The convergence of these new technologies, along with the emergence of cloud and the removal of constraints around data storage is creating a multiplier effect that’s speeding up the pace of change. “True SaaS is a business model shift. You’re consuming a continuous stream of innovation,” said Wang.

To deliver value in this new paradigm, Gardner, Wang and fellow analysts Jason Busch of Azul Partners, and Duncan Jones of Forrester all cautioned buyers against relying solely on the RFP process.

Rethinking the RFP

Instead, they recommended an open-ended process that allows for vendors to bring new ideas and solutions. Vendor partnerships and ecosystems also need to be taken into consideration when considering cloud vendors, since integrations and APIs make it possible for third parties to easily increase the value a platform can deliver. To that end, Bernshteyn announced a certification program that provides customers access to a larger set of software partners that can connect third-party applications to the Coupa platform faster than ever before.

The key takeaway is that solutions today have to earn their keep. They only provide value when they make users' lives easier. Vendors have to look at everything through that lens, and buyers have to collaborate across functions to navigate the waters of change, something that takes courage and persistence, agreed executives on the cross functional CPO-CFO-CIO panel.

“Have persistence and courage to implement the right solution, not the politically expedient one,” urged CPO Advisory’s David Hearn. His remark drew a spontaneous round of applause.

The bottom line:  “Digital disruption is changing the expectations of the user,” said Forrester’s Jones. “If you can’t meet them you’re toast.”

Eight pieces of uneaten dry toast, to be precise.