Why Coupa?Watch Now
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!
- August 07, 2014
- Ravi Thakur
Through the Coupa cloud platform, we track hundreds of metrics in order to help us continually improve our platform and help our customers be successful. The annual Coupa Benchmark is designed to provide finance and procurement organizations with broad visibility and guidance by sharing data on some of these key performance indicators. It includes metrics about ten of the areas where we commonly find that companies do not know how good they can be. Over the coming weeks, we'll be sharing these with you in depth.
This week's featured benchmark is Requsition-to-Order cycle time. This is
the length of time it takes between a requisition being submitted, approved and an order being issued.
According to our data, companies in the $250 million to $1.5 billion range averaged requistion-to- order times of 16 hours. They were followed closely by companies larger than $1.5 billion in annual revenue, with req-to-order times of 17 hours. Companies with under $250 million in revenues averaged 27.5 hours. By hours, we mean total hours, not working hours.
Why does requistion to approval time matter?
Requistion approval cycle time should match the pace of your business. When an employee needs a business-critical item, long approval cycles hamper their ability to conduct busines, and contribute to maverick spend by employees. If it takes too long to get necessary products or services, people will bypass standard processes and systems.
Improving requistion approval workflows
Cloud and mobile technologies have “democratized” the approval process; now even small companies can use technology to get approvals done quickly. Here are some concrete ideas for improving requistion to approval workflows:
- Evaluate your data to see which types of requisitions are taking the longest to approve, and who the approvers are.
- If you find approvers taking longer-than-usual times to approve requisitions, spend time with them to identify the problem. Offer training, or provide them with mobile devices so they can make approvals when away from their desks.
- Review requisitions that have many approvers. In most cases, having many approvers doesn’t provide real value. Often, you can decrease the number to shorten the approval time without affecting the controls of the approval process.
- Changing the limits and nature of approvals can accelerate the approval process. Shorten approval cycle times and become more competitive by introducing self-approval limits for some employees or increasing approval limits. In general, the more dynamic and flexible your approval processes, the better.
About the benchmark: This data was extrapolated from customer usage metrics on the Coupa cloud platform, comprising hundreds of thousands of global users, over 750,000 suppliers, millions of transactions and billions of dollars of spending. The performance metrics arebased on aggregate data; no individual companies are identified.
To avoid skew from very small organizations or those that are very new to Coupa, we've only included customers that have accrued a year's worth of spending and at least $5 million in P.O. spending through Coupa. For reported averages, the extreme outlying data points are eliminated to normalize the data. To learn more click here.
Ravi Thakur is Vice President, Customer Succes, for Coupa.