Last week the Ardent Partners analyst team attended Coupa Inspire at the fashionable Aria Resort and Casino in Las Vegas. According to Coupa, this was the largest Inspire so far with about 3,000 attendees and 50 sponsors/partners in the exhibition hall (or the community village as Coupa calls it).
This was my first Coupa Inspire event without Rob Bernshteyn, former Coupa CEO, and his special brand of highly entertaining keynotes — my favorites were the pre-IPO ones, especially when he compared using enterprise software to using the complicated shower in his hotel room or the one where he compared buying SaaS software to booking a hotel room in Paris. So, it was large shoes to fill for relatively new CEO Leagh Turner. That said, she did a great job, starting with talking about why she decided to take the job before pivoting to the new positioning of Coupa as “the margin multiplier.”
Coupa — The Margin Multiplier
Turner talked about being a margin multiplier in five dimensions — efficiency, productivity, resiliency, sustainability, and growth. My take is that this is an attempt to bridge the different personas that Coupa is selling to (i.e., the CFO, CPO, and CSCO) or even an attempt to address the CEO. Getting the CEO involved in software for the S2P process seems quite ambitious, but if they are successful it would benefit us all.
In a similar vein, Coupa is moving away from the term “business spend management” as this never really resonated with all the various target audiences/stakeholders. Instead, Coupa is now talking about total spend management (even though business spend management still appeared in several presentations).
The Six Trillion Dollar Differentiator
As the S2P market continues to evolve, it’s getting harder for solution providers to differentiate. I found myself thinking this could have been a presentation from virtually any S2P provider — with one big exception, a 6 trillion-dollar one. From the start, Coupa built its solution to capture and ensure contractual rights to leverage its customers’ data (in aggregated and anonymized formats). This means that Coupa today sits in six trillion dollar’s worth of transactional data (and associated contracts, sourcing events, and so on), giving them a big advantage when it comes to training AI algorithms. And the various Coupa representatives on the different stages were not going to allow us to leave without knowing that!
Coupa did, however, not fully leverage one of its other differentiators —the breadth of its suite. While the supply chain was often front and center (more on that below) its services procurement capabilities weren’t mentioned and its treasury solution was only mentioned in passing (with the reservation that we couldn’t attend every breakout session).
Coupa did reveal the release of a couple of AI-powered innovations, such as contract intelligence (helping organizations manage legacy contracts and third-party paper) and Coupa Navi (an AI agent/chatbot), but these are table stakes in today’s world and are hardly differentiating. That said, maybe that six trillion-dollar differentiator will help them perform better than others? Coupa also announced some new direct materials/supply chain capabilities, which leads us to the next section.
Closing the Gap Between LLamasoft and Coupa
Yes, I know it’s not called LLamasoft anymore but even Coupa has realized the value of the Llamasoft brand and is bringing it back as “Coupa Supply Chain Design and Planning Powered by Llamasoft.” But whatever you call it, there has been a functional gap between it and the rest of the Coupa platform that was only partially bridged by Coupa Sourcing Optimization (CSO). Last year Coupa started to fill that gap by releasing its PO collaboration capabilities designed specifically for direct materials POs (including those originating from various ERP systems).
This year Coupa announced the release of PO collaboration intelligence and forecast collaboration, with inventory collaboration and quality collaboration in the pipeline. The PO collaboration intelligence is one of the more useful and unique GenAI use cases I’ve come across. It parses and interprets emails from suppliers and classifies them into different groups such as order confirmations, delays, partial deliveries, and so on, streamlining the process of keeping records and schedules up to date.
As part of the inventory collaboration release, Coupa is also including BoM management and item master data management capabilities. Once these are released, Coupa will have one of the most comprehensive offerings in the market for direct material sourcing and procurement, with differentiating capabilities in both sourcing and network optimization.
ESG on the Main Stage
Day two started with the Coupa stalwart and EVP of strategy and product management, Donna Wilczek, on stage talking about ESG. Wilczek talked about how Coupa customers can use network optimization, supplier intelligence, and third-party risk management to drive and support their ESG agendas. While, again, we’ve heard similar stories from other solution providers, Coupa has some unique capabilities when it comes to both sourcing and network optimization that allow its customers to run different scenarios to visualize and quantify the different options when it comes to balancing cost and sustainability. And sometimes the sustainable option might be the lowest cost as well, if you can identify it. As Jennifer Brown, CPO of Salesforce, said, “It doesn’t have to be more expensive, you just have to make different choices.”
Perhaps No News Is the Best News?
There was a lack of really big news at this year’s Coupa Inspire. But given that almost the whole management team is brand new, we probably shouldn’t have expected that either. Maybe the most important takeaway is that the course seems to be the same for the “new” Coupa. Even if they are calling it total spend management, Coupa remains committed to the existing scope of its platform. But that said, things can change quickly in a PE world.
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