There is a (relatively) new business acronym starting to gain traction around the world. Over the last three to five years, we have started to hear more about BSM, or business spend management. This is a term for software and processes used to manage procurement and business payments. This therefore covers any way that employees can spend money.
The idea behind BSM is not reducing spend, or even controlling it, although these are part of the outcome. The focus is on getting best value for money out of company spending. Gartner’s definition states that BSM covers ‘spend analysis, supplier relationship management and strategic sourcing’. One of the leading players in the BSM space is Coupa, which has hit the headlines this month by launching an App Marketplace. This is part of its commitment to building an open business spend management community—but there is much to Coupa than this.
‘Value as a service’ business ethos
Piggybacking on the idea of software, infrastructure and platforms as services, Coupa’s selling point is value. By ‘value’, the company does not mean helping its customers to reduce costs, or even make savings. Instead, it defines value as the measurable improvement delivered to a business by a solution. It also notes that this cannot be considered as a single achievement or moment in time. Instead, it is an ongoing situation.
Coupa has five values, linked to the letters in the company name. The first value is comprehensive, because the Coupa platform brings every aspect of spend together in one place. The second is open, because Coupa operates transparently as a way to generate trust. The third is user-centric, with a huge focus on making things easier for every user. The fourth is prescriptive, because Coupa offers prescriptive recommendations to improve spend management. Finally, accelerated recognises the importance of getting value fast.
Supplier portal as research and development resource
Customers include Pearson, the educational publisher, and AstraZeneca, the pharmaceutical giant. The platform brings together all forms of payment within the company, including procurement, payments, supply chain, and travel and expenses. Customers use the Coupa Supplier Portal to enable them to work better with suppliers, and manage these relationships more efficiently. This has hugely simplified the buying process for these customers.
The Coupa Supplier Portal provides benefits to both suppliers and purchasers. The key to adoption of software is that it solves problems. In this case, both suppliers and purchasers benefit from using the Coupa Supplier Portal. For example, Purchase Orders are all visible on the portal, and suppliers can use those to generate and submit invoices automatically. This speeds up the payment process. Suppliers can also track progress on payment of invoices, making it easier to chase up late payments.
Portal revenue model
The cost of the Coupa Supplier Portal is paid by direct customers, making it free to suppliers . Coupa’s business model is to charge only its direct customers. Their suppliers can then use the Coupa Supplier Portal with no additional charge. The set-up process is also flexible. For example, AstraZeneca has chosen to set up all its suppliers on the portal, on receipt of the necessary information. The suppliers then only need to respond to an invitation and complete the set-up process. Pearson has provided a guide for its suppliers to enable them to set themselves up. The portal is accessible from any browser or via email, and there is no software or hardware to download.
App Marketplace as extension of its open platform
The Coupa App Marketplace is designed to build and extend the BSM community around the Coupa platform. It will allow Coupa customers to find more solutions from within Coupa’s partner community. For example, customers may wish to extend their BSM solutions to share information across the company, or to automate workflows for a particular process. The App Marketplace will allow them to connect with suppliers offering those solutions.
Apps in the Coupa App Marketplace are all expected to demonstrate three characteristics. Apps in the marketplace cover a wide range of tasks, but all have three characteristics. They must be adaptable, to solve evolving business problems. They must also be connected, to provide seamless integration between systems and solutions. Finally, they are expected to be efficient. In other words, they must provide value for limited IT resources, and be built specifically for Coupa’s platform.
Three takeaways for marketplace builders
The way Coupa has moved into the marketplace ecosystem is impressive. We suggest these three takeaways for marketplace builders:
Community is key. By encouraging large buyers with no platform costs, Coupa has attracted many sellers, which has in turn driven momentum
Platform extensions will continue to raise the bar for new entrants. Attention to technology and new possibilities very much matter in this highly dynamic space
Simplifying administrative tasks is profitable. It may not be glamorous, but taking away the pain of routine purchase and sales admin resonates with customers.