Today’s press releases by Coupa, Coupa Guarantees 1% Reduction in OpEx within 6 Months and, Coupa Sets New Standard for Ease of Use in Business Software, provide further evidence as to just how far the vendor has come from the heady days of being an outsider innovator trying to crack the then seemingly impenetrable wall of large ERP vendor prejudice and the inaccurate (and derogatory) bolt-on application moniker, to the mainstream recognition and acceptance it has and is continuing to achieve today.
While I will leave it to you to read and draw your own conclusions as to the significance of this latest news from the San Mateo, California SaaS vendor, who’s cloud-based spend intelligence solutions consistently deliver real-time insight and the associated savings, I wanted to focus on what I consider to be the $1 million dollar question.
Specifically, I asked COUPA VP Jason Hekl the following:
As you know, what your offering (per your press release) is great, but is a two-edged sword in that for many executive decision-makers who have lived the lie so to speak re savings can only be gained after a costly and herculean effort now have to admit that their present vendors (someone with whom they have likely spent a great deal of money) got it wrong. Do you see where I am going?
If they don’t go with COUPA they lose and for some if they go with COUPA they admit that what they were doing before was wrong or perhaps more diplomatically ineffective.
How do you overcome this very real obstacle?
Jason’s answer which follows is both telling and is, the real story behind the press releases:
Executives are right to be cynical. Buyers often take a defensive, cynical, arms-crossed posture when dealing with software vendors. Too many people have been burned by expensive software projects that did not deliver the promised value. But understand what we are doing here. The software-as-a-service model improves upon the original premise-based model, removing much of the financial risk for the customer with a subscription pricing model. However, the challenges of driving implementation speed, adoption, business case development, and eventual value delivery is still on the customer, regardless of the pricing or delivery model. The reality is that nobody really wants to go through all the steps involved with evaluating, selecting, approving, and implementing enterprise software. Writing detailed RFPs, watching long demos, coordinating teams, proving ROI, getting budget approval, negotiating the deal, and then driving an implementation is something most buyers are neither interested in nor truly qualified to be doing. So, what if instead of selling the ‘means’ to an end, the vendor aligns with the customer on the ‘end’. That is exactly what Coupa is doing. It changes the dynamic of the collaboration and fosters a true partnership, one where both parties are focused 100% on the achieving the objective, be it a 1% reduction in operating expenses, or something else. No more hard selling from sales, spamming from marketing, feature creep from engineering, or time and materials fees from services. All the customer has to buy is the agreed ‘Business Outcome’, and if not delivered then the onus is on us. We don’t know of a better way to create 100% alignment between a vendor and a buyer than committing to the outcome up front. And with the experience of dozens of successful implementations around the world delivering tangible OpEx reductions, we’re confident we can have the same impact with any company committed to implementing tighter controls over how its people spend.
I will be taping an interview later this week, which will be released across the PI Social Media Network the week following. Check back her for details or, visit the COUPA website at http://www.coupa.com/
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Procurement Insights 
May 18th, 2011 → 1:31 pm
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