The question of how to manage direct materials can yield polarized answers and requires deeper evaluation than simply evaluating a few narrow use cases. One consideration is the range of scenarios direct procurement encompasses, which can vary significantly from one customer to the next. The specific processes and needs involved may include upstream (i.e., prior to P2P execution) and/or downstream activities, new or existing products, procurement and/or supply chain functions, etc. As such, different solution providers will have different strengths and weaknesses in each area.
It is in that context that one should evaluate the evolving nature of Coupa’s product offerings. As announced at the recent Inspire 2023 conference, Coupa is introducing several new products to address industry gaps in direct spend management as part of its vision to become a comprehensive spend management platform (which for direct also means a supply management platform). These capabilities further extend Coupa’s existing advanced supply chain capabilities (Supply Chain Planning and Design solution).
The most significant enhancement is the new ‘Coupa supply chain collaboration’ solution. The intention is that by creating a user-centric collaboration layer between buyers and suppliers on top of the Coupa platform and infrastructure, the solution will streamline and enhance collaboration while decreasing operational business risks. As is the usual case for Coupa, the product was co-innovated closely with large global customers.
It includes (by order of priorities in Coupa’s current development cycle):
- Purchase Order (PO) collaboration for buyers and suppliers to know in real-time the status of POs and Scheduling Agreements (SA), acknowledgements, ASNs, etc.
- Forecast collaboration on forecasts and demand plans to anticipate shortages or bottlenecks and automate exception management.
- Inventory collaboration (Vendor Managed Inventory) to extend supplier visibility and the ability to act into inventory operations to enable a fully streamlined replenishment model.
- Quality collaboration to manage the direct-materials quality control processes from design to execution.
Coupa is not releasing all of the above at the same time. PO collaboration will be the first to be made available; the other modules will come later with Forecast Collaboration planned for early 2024. This ramp-up release order reflects Coupa’s pragmatic incremental approach. Coupa works closely with key global customers to understand their needs and how best to address them while also ensuring it provides the largest portion of its customers and prospects with foundational capabilities that can be a springboard for the future (for Coupa and customers).
This article explores Coupa’s direct offering through the following elements:
- Yesterday — Coupa’s offering until the announcement was made at Inspire.
- Today — what new capabilities will be available in the first releases.
- Tomorrow — what is expected to come next?
The article concludes with comments on the solution’s potential impact on the direct procurement landscape and where opportunities remain.