Today, technology has the ability to significantly increase the efficiency with which organizations handle expenditures while simultaneously containing costs, increasing controls and improving visibility into where the money is going. Procure-to-pay software enables organizations to manage the end-to-end process of requesting, procuring, receiving and paying for goods and services. The related and often interchangeable category of source-to-pay software begins with the process of securing the vendor. Both approaches are part of the 2023 Ventana Research market agenda for Office of Finance.
Coupa is a cloud-based P2P platform that supports an organization’s efforts to optimize spend processes, addressing a variety of challenges including limited control over spending, inefficient processes, compliance and risk management and improved insight into spend. Coupa was recently acquired by private equity firm Thoma Bravo, which could lead to changes in how it manages its investments and financials.
Coupa’s platform addresses procurement, expenses, invoices, pay, supply chain design, contact management, strategy sourcing and supplier management. Features include travel and expense management, accounts payable automation and compilation, streamlined payments and discounts, automated contract workflows, treasury management and predictive spend insights.
The market for P2P software is fragmented and highly competitive across many vendors. Coupa positions itself as easy to use and highly flexible with strong integration capabilities, able to address the needs of midsize and very large organizations.
Automating the full procure-to-pay cycle using straight-through processing should be a priority because, in most organizations, some or many of these disjointed steps remain the same as they were in the late 1990s. Some finance executives, however, might be unaware of the gaps that exist. For instance, they may believe their department utilizes electronic invoicing, when, in reality, a significant number of invoices are received as email attachments which must be manually entered into the system or printed out and scanned. Even organizations that think these steps are digitally connected are likely to find that there are multiple gaps requiring manual intervention that delay completion (especially if reviews and escalations are required) and introduce errors through data reentry.
Unfortunately, these less-than-perfect systems are likely to persist. Ventana Research asserts that by 2027, only one-fourth of larger organizations will consistently manage source-to-pay end-to-end, but those that do will outperform competitors. Updated technology can improve P2P effectiveness, streamline processes and automate repetitive work. Technology can also improve the efficiency of purchasing and payments processes while ensuring guidelines, controls and regulations are observed and costs are minimized.
Transforming core business processes such as P2P became essential as organizations locked down in early 2020 because of the pandemic. The need to operate remotely presented a set of new challenges that were best addressed by software. Especially in the areas of sourcing, purchasing and payments, Coupa’s platform can streamline P2P processes, shorten cycles, reduce unnecessary costs, provide greater visibility into cash flow, increase control and improve results. Its P2P software can also make it possible for organizations to strategically negotiate and manage early payment discounts to reduce purchasing costs. Too often, manual, paper-based invoice management makes it impractical to process payments with adequate control to benefit from such discounts. P2P software also helps organizations address the growing challenge of attracting and retaining staff because they spend less time on mechanical, repetitive tasks and more time on work that requires their training and skills.
Ventana Research recommends that finance executives examine P2P process management to determine how they can benefit from end-to-end automation. They should assess the potential value that can be achieved from lower overhead, more effective spend management, reduced costs and better insight into supplier performance. They should evaluate how well the capabilities meet current and future requirements, the breadth of services offered by vendors, the product roadmap to ensure continued enhancements to address their needs and whether the total cost of ownership is in line with their budget. Consider the software’s ease-of-use to promote employee adoption, ease-of-configuration to promote flexibility and its ability to scale to meet the needs of the enterprise. We recommend that organizations include Coupa in that assessment.