Coupa Blog

Coupa is a company of talkers, passionate about sharing tips, tricks and advice for improving finance and procurement and saving companies of all sizes time and money. But we’re not the only people with opinions and ideas. We’d love to hear from you so join the conversation!

 

The staying warm guide to choosing technology solutions

Since the Great Recession, mid-market companies have come into their own, on average recovering and growing at a much faster clip than big and small businesses. According to research from the National Center for the Middle Market, for the year ended July 2017, mid-market companies grew revenues 6.7 percent on average, versus 4.8 percent for the S&P 500. These companies have strong bias for reinvesting cash, with 67 percent saying they will invest to add equipment, make acquisitions, and train or hire employees. They also recognize that simply adding more people isn’t scalable, so they’re looking to solve problems with technology. The problem is, when you’re running that fast, there’s a tendency to be myopic with software choices, often looking to point solutions to fix a specific problem as quickly as possible. That’s not necessarily scalable either. There are a lot of great solutions designed for the mid-market, but in many areas, companies may be better served by broader software platforms that can expand and grow with them, eventually addressing the entire process the current problem is part of. It’s kind of like when you’re a litle kid and mom insists on buying your winter coat one size too big. You probably want the cool coat that fits you now, but mom knows you’ll be bigger next year, and that coat isn’t going to fit you anymore and will probably be out of style. That’s the situation mid-markets tend to get into when buying technology. The moles always win Why? Because solving problems one at a time with point solutions leads to a game of technology whack a mole that will eventually be won by the moles. For example, a typical problem that crops up in a fast-growing company is that accounts payable is drowning in paper invoices. So, you go out and buy a paper scanning OCR solution. Now that you’re getting invoices into the system faster, you realize that your invoice approval process is slowing you down. So, you get some workflow software and integrate it to your scanning solution and your accounting system. That starts to reduce some AP team time which shines a light on the enormous amount of time you’re spending processing expense reports. So, you go out and buy an expense management solution for that. And so the cycle goes. Every core business process—customer relationship management, business spend management, human capital management—can be broken down into set of non-optional activities that will all have to be automated at some point in time. You may not be ready or able to automate all of them at once, but it’s not hard to see the writing on the wall. When you do them one at a time, without thinking about the bigger picture, you eventually end up with a bunch of disconnected processes and data silos. At some point, you’re going to have stop and fix it with new technology that consolidates your systems and fits the business you are today. That’s really going to slow you down. Why not find a solution you can grow into? Cold wrists Yes, it takes longer to evaluate end to end solutions, and it’s harder to make the case for a solution with capabilities you don’t need at this very moment. What you have to realize though, is that a significant investment of time and money goes into every solution you buy. You still have to divert resources to run a selection process. Depending on what you’re buying, there could many steps in that process, carried out over a period of months. There are people, and politics, to deal with. And that’s just to get to a signed contract. Implementation and change management are even more disruptive, time consuming and costly to your organization. And, depending on how fast you’re growing, you’ll probably outgrow the technology in a few short years. Then you’re left with a situation where the sleeves of your coat are too short. You can no longer zip it up past the waist, your wrists are cold, and you have to go coat shopping again. As much as you hate to admit it, mom was right. So, you run the whole process again and redo what you already have, in the next size up. And the cycle continues. This is a classic mid-market problem, compounded by the explosion of point solutions on the market. In a company devoting a lot of resources to growth, there’s a strong incentive to put a band-aid on problem areas now because it's seems cheaper and faster to implement in the short term, and put off thinking about or dealing with the big problem until you absolutely have to. However, that big problem is going to be even bigger when you try to solve your problems with a point solution approach. Making the leap Eventually there’s a realization that you’ve got to think not just about the immediate problem and how to solve it, but where you want to be in two or three years, and whether that solution is still going to work for you then. The faster you can make that maturity leap, the better. That doesn't mean that you should try to solve every problem at once. But you should have a plan, and the technology solutions that you bring into your organization should be ones you can grow into, because they are able to address those next problems when you're ready. Selecting the right solution Look for cloud-native solutions that both enterprises and mid-markets are using, but avoid solutions that are one-trick ponies, or enterprise solutions that have had been stripped down to create a mid-market version. The latter won’t easily scale up when you need them to. The right solution should be able to meet your existing needs and get you started quickly while also giving you the flexibility to eventually cover your end to end process, and even related processes. It should integrate easily into your existing infrastructure, and it should be easy to update the integrations as your infrastructure changes. Picking a solution that can grow and expand with your business leads to much bigger benefits, and with configurable cloud technology, it isn’t necessarily going to be more expensive or have longer implementation times. It will likely end up being less expensive in the long run, because people don’t usually consider the cost of business disruption associated with buying and deploying software, and the rework costs of replacing short-term solutions. In a fast-growing company they absolutely should. They should take mom’s advice and buy the bigger coat.

The View from the Cloud

Back in 2005, while working for Sun Microsystems, I was delivering a keynote at a computing event in Moscow. One of the slides in my presentation outlined how IT would move from being the builder of things to being the aggregator and integrator of things. It was an innocuous sounding argument, but there was a deeper agenda: make the IT professionals in the audience uncomfortable and help them realize that the IT of the future was going to revolve around this thing called utility computing—what we now call cloud computing. The slide helped accomplish that mission. There was a bit of shock and awe from the audience, along with questions and pushback. We were told that this so-called “cloud computing” would never happen – at least not in the way we said it would. But the idea that you could use computers in the same way you could use power coming out of the wall - only paying for what you used - was something we had been envisioning and talking about at Sun for a long time. “The network is the computer,” was the phrase that we used, back in the day. Even if the audience in Moscow couldn’t see this vision, we could. We were watching the rise of Salesforce and other young upstarts in the SaaS world. I recall thinking, “either we're crazy, or the rest of the world is.” I had enough conviction to believe we were the ones who were right. Indoctrinated into the cloudBy the time I left Sun when it was acquired in 2010, there was no longer any internal debate about the shape of things to come - we knew we were right. When I interviewed for my current role here at Juniper Networks I learned that their board had made a strategic decision to move all of the company’s IT operations, including internal corporate applications and data to the cloud. This was in alignment with my belief that the cloud was the way forward. Juniper had already begun to make strides towards its cloud vision and, since joining, I have had the pleasure of assuming a leadership role in both the vision and the execution of the vision of cloud-only solutions. So where are we today? Well I’m happy to report that the transition of Juniper’s IT operations to the cloud is virtually complete. Almost all of Juniper’s internal corporate applications and data have been shifted to the cloud, either as software as a service, infrastructure as a service, or platform as a service. We’re down to a couple of applications left in a small data center that are on track to transition by next summer. Still strugglingMy message to organizations that are still struggling with this transition remains unchanged: there is no longer a debate, the cloud is here to stay. So, get started with your journey. We now have at least three generations of workers in the office - baby boomers, GenX and millennials. When it comes to cloud, it’s best to take a cue from millennials who have embraced the cloud wholeheartedly. There are four dimensions for organizations to consider as they start their journey. The first is cost. Yes, one of the selling points of a shift to the cloud is that it can be less expensive – the caveat being that it has to be planned, budgeted and rolled out in a way that makes it more efficient. The second consideration is security. Some in IT still worry about security in the cloud. One of the benefits of the cloud is that you can gain access to external security professionals in addition to your existing in-house resources. The third consideration is agility. This may be the single biggest benefit derived from the cloud – agility and speed to market. The fourth consideration is the providers. It can feel like a game of roulette where you’re gambling the future of your organization on one of the many providers. There are a number of possibilities, including Amazon, Azure, Google and IBM. The key is finding the right provider to scale along with you as your organization grows. When, not ifThere’s another set of considerations around the “what” and “when” of the cloud. The question of what to move to the cloud has gotten a little bit easier as markets have matured. There are many good choices, and clear winners in many spaces. What every company has to decide is how far down the application stack to go. There’s a case to be made that everything required to run your most common business processes can now be shifted to the cloud. For most companies, it’s not if they will be moving to the cloud, but when. The question of “when” comes down to order of operations. Exceptions may include financial services or security companies, as well as healthcare organizations. These organizations have data and intellectual property that may require them to forgo potential cost savings or agility gains the cloud may offer and maintain those assets in their own data center. Becoming strategicWith the rise of the cloud, IT is being asked to think differently. Historically, all projects were considered ‘in-house’ so there was not a lot of debate whether to build or outsource – the question was more along the lines of the number of servers that would have to be purchased and how large of a data center needed to be built. Today, IT has moved to a more strategic role where they are tasked with evaluating what to do with their organizations most valuable asset: its data. The cloud is a great tool for agility, cost savings, security and scale – but any strategy starts with trust. As organizations explore these considerations, it’s important to align with senior leaders to determine what the appetite for change is – because without a willingness from the c-suite, your journey to the cloud may be over before it begins. Bob Worrall is SVP and Chief Information Officer of Juniper Networks and a member of the Coupa Executive Advisory Board.

How to Evolve to Two-speed IT

It used to be that IT had one set of customers, and they were internal, and one system to maintain: The ERP. Fast forward 10 years and people are using mobile applications in every aspect of their daily lives, using social media to communicate more with pictures than words, and expecting the same kinds of experiences at work. IT is increasingly being asked to help enable new business models to serve these changing needs – often via the cloud. In the face of that challenge, we’ve come to realize that the ERP is in many cases not up to the task of supporting the speed, mobility, user experience and self-service capability external customers now expect. So, we’re moving to what Gartner calls it two-speed IT. As we go through this evolution, IT professionals need to keep an open mind. We need to stop reflexively looking to the ERP for everything, and stop identifying ourselves as “an SAP shop,” or an “Oracle shop,” and refocus on finding the right balance between traditional systems of record and these new systems of differentiation and engagement. Becoming a convertI’ll be the first to admit that when I was CIO at The Global Fund a few years back and we needed an ordering system, I immediately thought, why not do it through our Oracle system? The volume and structure of information that we needed clearly belonged in an ERP system. But as far as the ordering function went, we needed to do something that offered the user a more consumer-like experience. And, it couldn’t be something that we had to train people for. With high turnover a fact of life for our external stakeholders, we needed to deploy applications that were intuitive. I kept an open mind, and we did a rigorous analysis of three different scenarios before choosing Coupa. I realized we could build the best ordering system in the world, but if nobody can use it, or wants to use it, the business process wouldn’t work. We still integrated it with the ERP, to manage all of the financial flows and to control the spend. This CIO was converted. This is a perfect example of two speed IT. Speed one is for systems of record, where you’re running your core business processes--accounting, product planning, etc. Speed two is for systems that run processes where you’re looking to reach out to customers and interact with them. ERP is the engine, but you put something more modern that supports self-service and mobility on top of it to build today’s business models. New business modelsFor example, if you were running a service center 10 or 15 years ago, it would probably have been a remote call center. A customer in California would call and talk to someone in Kansas who would arrange for a service technician to come out and fix their washing machine. That’s now a very outdated model. What the customer does now is open an app, take a photo of the barcode on the back of the machine, type in the problem and send it off. From there a ticket is created and sent to a service center, and a service technician is dispatched electronically, directly to the location. Another example: At the moment, I’m working with a lot of banks that would never have considered having an e-banking solution. Now they’re coming to us and saying, “Our customers are demanding e-banking.” If we had to build things like these 10 years ago we would have said, “We need a six-month project to change the ERP to do this,” and what we built still would have been unsatisfactory. The ERP is not a system that thousands of people want to interact with. The two speedsWhen ERP went in, there was no notion of someone taking a photo on a mobile phone and uploading it, or of a process that didn’t require human interaction. This is the pressure that our internal customers are under. They’re looking for solutions to address the changing needs of their customers. They’re having to change the way that they do business, so we do as well. You can see why we need a second speed. As a CIO, you’ve got to continue to maintain your ERP, which requires about an 18-month cycle time to change. That’s okay. If you’re running payroll or your financial closing or your planning, you don’t want to be changing that all the time. You also want to be able to adapt quickly to new business conditions and extend the ecosystem without touching the core. For systems of engagement, you want is speed and simplicity. People don’t need access to all the financial accounting structures. You need to give them a way of providing you the data you need to drive your financial accounting structures, while allowing them to do their job quite quickly and simply. Keeping an open mindThe big idea is to have the right tool for the right job. There’s still life in the old ERP yet, but you have to realize that the demands of the external market require more agility. IT leaders have to figure out the best way of structuring the organization to solve problems in the short-term, but also for the long-term. That will probably end up being a mixture of ERP and systems of interaction or differentiation. Above all, it is imperative to keep an open mind. Most CIOs have had some degree of this type of change forced on them over the past decade. If you say no too often, if your knee jerk response is always to look to the ERP, people will go straight to the market and buy their own solutions. What you’re doing then is diluting your organization in terms of information, security, and governance. It’s much better to be leading the charge. So, as you consider these requests to support your new, external customers, ask yourself: Can you do it better internally? And, can doing it better internally give you a critical business advantage? If not, outsource it, integrate it, and focus your efforts on adding value to the core.

The surprising truth about humans and artificial intelligence

Artificial intelligence is not new, but suddenly everyone seems to be talking about it. As I explained in my last article, we have hit an inflection point with computing power and data that is finally allowing for commercial applications of this technology, and that’s what all the excitement is about. It’s only going to get faster and better from here on out. Along with talk about the new possibilities, there is also a lot of fear about people possibly losing their job to a robot, or even becoming irrelevant. Should humans worry? Artificial intelligence expert Andrew Ng, the founder of the Google Deep Brain Learning Project and the former chief scientist at Baidu says yes. How much? About as much as we should worry about overpopulation on Mars, says Ng. In other words, any such scenario is unimaginably far in the future. Narrow problems For one thing, the problems that AI is solving now are very narrow. Despite the wow factor of being able to shout a command at Siri or Alexa and have a task performed, when you get right down to it the tasks they are performing are rudimentary. But the bigger reason is that the robots need us. What makes technology good is the fact that people are involved in it. You only need look at the evolution of software up until now to see that humans are essential for AI even to exist, and that our relationship will always be a symbiotic one. As little as ten years ago, a lot of our approach to technology was, "Here you go, that's your interface, get on with it." And you think, "Crikey, how do I use that? I have no idea." And then you give up and move on. For example, if you look at the software we had in procurement back in the late '90s and early 2000s for example, no one really could use it because it took five years to get the system up and running and then you had a whole bunch of screens and you needed a lot of training to do anything at all. It never really worked, because we’re a bit belligerent as a species. We’re not going to use something just because it’s forced upon us. What we have now is much simpler and easier to use, so therefore people use it. How to train your software When you get people using your software, the system gets more feedback, which it uses to make things even simpler. Then more people use it, and it gets even better. That's what's happened with Salesforce, the first cloud-based software to be adopted on a mass scale. Humans taught it how they wanted it to behave, and they continue to do so.   The same has happened in other areas. Back in 2000, before there was Facebook, in the UK there was a social network called Friends Reunited. It was not that much different than what Facebook is doing now. It got up to about 15 million users before it died a slow death. What Facebook did a better job of was learning from humans and evolving. You may think of Facebook as social in that everyone can share and comment on pictures of performing cats. What I think is social about it is that you have a billion people intimately involved in the software development process, not because they’re part of a formalized user group, but simply because their every interaction feeds data back into the process. Fueled by people With the cloud, no one develops software in isolation any more. If you look at all the disruptive technologies that have taken hold, they've been fueled by an ever-growing amount of data from an ever-growing number of people using them. They’re not using them because they've bought them, but because they want to.   There’s a very predictable trajectory to getting to that place where people want to interact with the software. You have an early version with a small number of adopters who accept and then ultimately reject it. The next iteration solves some of the problems of earlier attempts, so it gets more adopters and more feedback, and it gets better, and so on. There’s a chain reaction that happens. Eventually you get to mass adoption, and these technologies just become a part and parcel of peoples’ everyday life, like Facebook and cell phones and Google. There’s a hell of a lot of work and failure that goes into getting to that point, and then you make that leap. But it’s all based on the feedback from the human. Without people, it wouldn’t happen. That's why I don't think humans will ever be out of the picture because no matter how good artificial intelligence is as a technology, it can’t exist in a vacuum. If people aren't engaged with it, you don't get that feedback loop. Not standing still People aren’t going to stand still either. We've been at this innovation thing for tens of thousands of years. When agriculture was invented, people no longer had to hunt and forage for their food and they turned their attention to perfecting farming instead, and that’s worked out rather well. More recently, when automation came to the coal mines in England, people didn’t sit on their backsides doing nothing. They became mining engineers or machine engineers.   For those that are worried about the threat of machines taking over, it's just not going to happen. For AI to evolve and for a business to evolve, it means the people trained in the machine and using the machine will have to evolve too. People will still have massive influence over the technology.   Our activities and skill sets will change. When machines take on some of life’s more mundane, repetitive tasks, human behavior and quality of life goes up. Work life probably won't change for a long time because people still need to talk to people, buy stuff and pay people.   We’re not going to run out of problems to solve any time soon, which is all the more reason we need to free up the creative energy of humans: To work on really big problems such as global warming, disease, and people not having enough food or clean water, and eventually, hundreds or thousands of years from now, figuring out how to live on Mars. Paddy Lawton is General Manager, Coupa Spend Analytics. He is the founder of London-based Spend360, which was acquired by Coupa in January of 2017. Prior to that, he was the CEO of  Digital Union. He holds a BSc in Computing and Software Engineering from Oxford Brookes University. To hear more from Paddy, download our webinar, “Cutting Through the Noise: A Pragmatic Look at Artificial Intelligence’s Impact on Spend Management” 

The role of the CIO in the digital era

Today, every IT leader has to have a strategy for digital transformation. But what is digital transformation, and how do you craft a strategy? What is the role of SaaS solutions? Is it safe to leave the confines of the ERP?   Those were the issues that were top of mind at our CIO panel at Coupa Inspire ’17 last month. Coupa Executive Advisor Kendra Von Esh hosted a lively panel with Coupa customers Bob Worrall, Senior Vice President/CIO of Juniper Networks; Oscar Nafarrate, Director de Procesos y TI at Grupo Herdez, and Paul Tuxford, General Manager and Head of Change, Transformation and Integration at Avaloq. Paul is also the former CIO of the Global Fund, where he implemented Coupa. Kendra: What is your definition of a digital strategy or digital transformation? Oscar: When we talk about digital strategy in our company, it’s about how to help the global team achieve what our company wants to do in the areas of business strategy, competitive opportunities, and risk management. We try to enable the company to do it in a faster way. We talk about how to speed processes, how to make them leaner, and how to get information about the market in a faster way so people take better decisions. It’s about how to do things faster, better, with less people, and make better decisions. Kendra: Bob, what is the digital transformation strategy at Juniper Networks? Bob: We purposefully try not to use that phrase. It's another one of those glorified marketing phrases. I think as was just pointed out very concisely and accurately, it's all about speed. It's how can we bring solutions to customers faster, promote our services and make technologies available to customers in a self-service mode, and how we can do our back office functions faster. Kendra: That means that IT leaders' roles are changing. What do CIOs really need to be focusing on in today's day and age? Paul:   Yeah, the CIO's role is changing, and it's not changing now. It actually changed three or four years ago. What the business is looking for now is a way of enabling new business models. How do I enable my salespeople to collaborate, to enter new markets, to sell new products? That's what they're looking for technology to do, not just to have a safe backup and a good data center and a fast network connection. Kendra: How has software as a service and cloud changed the way in which your organization operates, is staffed and supports your business? Paul: I joined the Global Fund in 2013. It's a UN organization funding AIDS, tuberculosis, and malaria programs around the world. So, very focused on the outcomes in country. IT had never been a priority. When I got there, about 17 percent of the IT budget was running the data center, running SharePoint, running email--all that stuff that I just said that you didn't need to do. The transformation has been to move away from that infrastructure-heavy sort of organization and look at how we could project into the countries and enable business models that were never possible before. One of the things that the CFO and CPO and myself as the CIO realized was that we were putting about $2 billion worth of funding into the countries and tracking it on Excel. We didn't have that visibility before spending was happening, where things were moving, where things weren't moving. We couldn't facilitate that. We changed from “boxes and lines” IT to enabling collaboration in a way that could never have happened without the cloud. Oscar: Software as a service has helped us in not thinking too much about the technical issues, more about the business. That’s the CIO role now--to enable the business thinking about the business, not thinking about the technology. That's one part. The other part is there are some processes like purchasing, for example, that need a lot of mobility. I think it's easier to do this if you have SaaS. Bob: I think with every sort of new iteration comes pros and cons. In the case of SaaS, for me, one benefit is sleep. It's a little bit easier to not have to worry about what's going on with my SaaS providers, so I sleep easier. On the downside, in days gone by, I rested a little bit easier knowing that I had complete control of the data. Now the data's sitting somewhere in Amazon, or Azure, or somewhere else. And yeah, it's probably being supervised and managed well, but my board doesn't care about that. They just want to know, what are you doing to control data spread and access? It requires a slightly different skill set from our infosec team and our data management team to handle these issues. But I think the key benefit is being able to offer solutions to the business much more quickly than we've ever been able to before.