A Fitness Tracker for Finance and Procurement
Finance and procurement organizations need ways to determine if their efforts to drive savings and increase efficiencies are successful. But, their visibility is usually limited to what’s happening in their own business.
It’s like working out. Let’s say you’ve started running, and you’re doing a 15-minute mile and you're proud of yourself. The fact that you're working out is great, but is a 15-minute mile good enough to get your heart pumping at the optimal rate, burn fat and keep your cholesterol under control? Not so much. You need a to know what average, better and best mile times are for a person of your gender and age, and measure yourself against that to make sure you’re getting the full benefit of your workout.
At the beginning of the summer, we released our second annual new and improved Coupa Benchmark Report, a compilation of 10 key performance indicators. Think of it as a fitness benchmark for finance and procurement.
The Coupa Benchmark reports on data gathered from hundreds of millions in spend that has run through our cloud platform. This data is grouped by company size and represents millions of transactions by hundreds of thousands of global users and over 1 million suppliers. All data is aggregated and kept entirely private.
Our cloud platform actually allows us to track and measure hundreds of KPIs that we don’t report on publicly. Our Customer Success team uses these internally to help our customers continually improve their performance. The benchmarks we've selected for the report are in areas where we’ve found that companies really don’t know how good they could be.
1. Req-to-order cycle time
2. Number of approvers per requisition
3. Invoice OK-to-pay hours
4. Visible P.O. spend-on-contract percentage
5. Percentage of P.O.s sent via CXML and EDI
6. Self-service potential
7. Catalog items
8. Number of punchout sites
9. Embedded buying policies
10. Web forms
These are areas where organizations can make immediate gains with Coupa, even those that are not very mature in their procurement life cycles.
We reported on the first six metrics in the 2013 benchmark. I would describe most of these as some of the core metrics of efficiency that organizations should be looking at.
This year we’ve added four more metrics around the content that companies are providing to users. These are what we see as fundamental to creating an organization-wide culture of spend optimization.
We believe that when people see these metrics and read the report, most of these items should be immediately actionable. Over the coming weeks, we’ll exploring each one in depth and providing suggestions for improvement.
We look forward to expanding the number of metrics we report on and we’ll continue to mine our platform for data as we deepen our offerings in inventory, catalog management and travel and entertainment expense management.
We believe that providing this information, along with product capability that makes improvement easy, is the best way to help finance and procurement get everyone in the organization engaged with the mission to optimize spend.
In coming years, we’re thinking about using our data to look at commodity and pricing analysis to give real trends on certain parts of the economy. What benchmarks would be most valuable to your organization? What would you like to know? Leave me a comment and let me know.