Next week, I will devote these virtual pages to a special series on eSourcing and eProcurement and where their respective spheres cross. I have enlisted some friends in the industry to help give perspective on topics such as integration and next generation supplier networks.
Next week’s authors will include myself, Dave Stephens – CEO of Coupa, Gary Hare – CEO of Vinimaya, and Michael Lamoureux – blogger extraordinaire, consultant, and visionary. I truly welcome as many other opinions and guest posters as can be stuffed in to the party. If you read something next week that inspires your own lengthy agreement or rebuttal, please let me know and it will be published.
My original goal was to tackle a concept that gets discussed regularly but rarely, ever implemented. The concept of an integrated platform for sourcing and procurement. There are legions of people on both sides of the value proposition of this argument, and probably always will be. Since I had a couple posts come to me in favor of the idea, I decided to stump strongly against the idea. In reality, I do side more on the “against integration” side of the fence, but I do also see the value in seamless applications. My post will explain why in much more detail as I believe integration is a word mastered much more by good sales reps and much less by practitioners. I absolutely do not believe there is a right answer to these problems, there are only individual scenarios that must be analyzed and acted on within a vacuum.
I hope the posts are thought provoking and valuable to others and very much appreciate those that helped me try to flush out some of these issues. As I mentioned, I do not believe any one can state one method is better than another but there are very well thought out arguments for both coming soon.
I do not spend much time discussing e-Procurement on E-Sourcing Forum but do want to bring attention to a new blog dedicated to the subject. Coupa seems to have had a really good launch and Dave and Noah have plenty of experience and talent to discuss e-Procurement. Right now, the content is just ramping up and I am sure will get more and more interesting over time as their experiences and products develop and mature. You can read the Coupa blog here.
I was traveling during part of this week with a broken laptop, so I missed some of the posts going on that I would have normally seen right away. Needless to say, it was an exciting week with lots of action.
I raised some questions about a Hackett report on diversity sourcing which was followed on by a spirited exchange and my request for some input by Pierre Mitchell was ultimately answered, just not on ESF.
BIQ and Spend Analysis fighter ace, Eric Strovink, helped spearhead a very interesting conversation on the details of spend visibility. At last count, there were 14 comments which is a virtual geyser of discussion for our blogs.
Coupa Release Candidate 3 was announced (previous week) and from all I hear, is doing very well and gaining steam.
Our post on the EU, by Sean Delaney, got some pretty good attention in Europe. We received some emails on the topic but they were too shy to post in a comment. Regardless, some liked it and thought it spot on, others thought we were a little too hard on the EU.
Spend Matters and Supply Excellence announced a podcast series, an idea that I have wanted to launch for almost a year now, but alas, 24 hours in a day just aren’t what they used to be. Nice work guys, should be good stuff.
I have no doubt that the amount of quality news and information about supply management has literally doubled, or even, tripled or more in the last 12 months. I think 2006 can be described as the year of the blog in supply management.
The well buzzed and documented release of Dave Stephens new venture, Coupa, has gone live. Originally slated for July 4th – “Independence Day” (meant to symbolize freedom from expensive installations of the past) is available at Coupa eProcurement. Dave personally took me through the tool in mid-June and I can attest that it had the best user interface and smooth, intuitive e-proc functionality that I have been exposed to. Coupa also has a social networking structure that breaks the mold for traditional e-Procurement solutions. Lets call it e-Procurement 2.0.
I am very curious to see how Coupa takes off compared to its well known brethren like SugarCRM. I will be watching closely at the code development pace and install base. Of course, I will also make sure to get regular feedback from Dave himself, to post here. As with any start up, there will be mistakes and strategy shifts, but Dave is well equipped to make the adjustments on the fly to make it all work.
Today ESF brings you commentary from Dave Stephens, author of Procurement Central, co-founder of Coupa, and overall procurement technology guru (with over ten years of experience at Oracle who had one of the few early offerings and alternatives to SAP). This month, along with co-founder Noah Eisner, David is launching Coupa, an open source e-Procurement platform that is set to revolutionize the industry by giving small and large companies alike without extensive platform needs a cost-effective alternative to the extensive, and often expensive, offerings of the three hundred pound gorillas.
I was flattered that Michael asked me to write a post for his series on Purchasing Innovation. I like to think of it as a little like speaking at a business conference — but without all the slides, the clip-on microphone, an audience to look in the eyes, and that awkward moment when, after you’ve flubbed a key line, you try to figure out if folks are laughing at you and whether you should sprint off stage and call it a day.
Okay, maybe it’s not actually that much like speaking after all …
I have spent a fair amount of time reflecting on invention over the years. Like many of you, I’ve spent nights making lists of new business ideas, following trends, and trying to anticipate the path of progress in fields that intrigued me. Sometimes I was right, sometimes I was way, way off. And up until I co-founded Coupa, I always watched from the safety of the sidelines.
But even as a longtime Monday-morning quarterback I came to hold a few beliefs on innovation and its context within the purview of Procurement. You may be surprised to find them ordinary. And because they are ordinary they just might stand out. So let’s get to it.
I subscribe to the view that very little “invention” or “innovation” is actually new. I believe ideas progress incrementally. I believe that solving a problem most often involves failing a few times at it first. Innovation is about experimenting & about finding a path towards incremental progress.
Take Open Source for instance. It’s been a buzzword a while now. And if I were in the venture community every entrepreneur who pitched to me would call it “discontinuous innovation”. So Open Source must be a “new” thing, right?
No, surely not. Open Source is the simple idea of collaboration and teamwork sponsored by an organizing force to collectively provide goods and services. A co-operative if you will. It’s based on ideas that go back hundreds, if not thousands, of years. It’s not revolutionary, and in fact it’s barely evolutionary. Open Source takes a concept that has worked in a different context and applies it to software and to software development. It’s incremental. (For more information, see The Myths of Open Source by Malcolm Wheatley in CIO Magazine, March 2004.)
But just because Open Source is incremental doesn’t make it minor. That’s why a November 2003 article in Wired Magazine stated: “Open source is doing for mass innovation what the assembly line did for mass production. Get ready for the era when collaboration replaces the corporation.” So what’s going on?
Most of you know the story of Thomas Edison. Was he an inventor or an entrepreneur? His gift, or at least what we remember of it, was to take ideas discovered by others and make them practical. To make them useful. Did he discover the electric light bulb? No, he did not. Did he figure out how to make it inexpensive enough for mass production and consumption? Yes, he sure did. And that made all the difference.
Now, through the arc of progress in the 20th century invention and innovation seemed a lot different than it does now. With massive “basic research” laboratories sponsored by the world’s biggest companies, progress may not have been overnight but it was amazing. And naturally you can trace innovation back so much further. And what you discover when you do is that innovation is not often restricted to the isolated work of a single genius but instead borne from an infrastructure of collaboration and sharing that supports a “genius collective.”
Now I certainly believe each of us has the power to do great things. But as is said so often it’s become cliche, we stand on the shoulders of giants.
But something does feel different now. Over the last few hundred years and through today our ability to communicate with each other and receive feedback has increased exponentially. This has affected our lives in a profound way. It wasn’t that long ago when people didn’t expect to be able to reach each other anytime, anywhere. It wasn’t that long ago when you were unplugged. (Or when you could unplug.)
There are positives and negatives associated with our new digital world. But for innovation, for invention, it has fostered an ability to aggregate “ronin” and destroy barriers. (Editors note: in feudal Japan, ronin were masterless samurai.) Ronin is a term I use to mean individuals who are highly skilled, who possess shared passion and knowledge, but prefer to call no company their “master.” They can collaborate easily, virtually, and with great success. They might be independent consultants, they might be full-time researchers. They could be anywhere in the world.
Ronin collaborate to introduce collective inventions and innovation in an increasingly digital world. Their digital works can be distributed worldwide immediately. And even when their digital innovation takes physical form (microelectronics, etc) the speed with which progress can be made is breathtaking. Remember the Wendy’s commercial with the older woman complaining “Where’s the beef?” – well, with Ronin, it’s ALL BEEF. All meat, no bun. No overhead. No bureaucracy.
And when published works are available for worldwide review and criticism, as in Open Source, economic efficiency is achieved. What is found useful is recognized and grows. What is not is ignored and discarded. It’s the democratic process applied to progress, but compressed into a New York minute. And the Ronin like it that way. They are having fun & enjoy doing useful work. And so their numbers will continue to grow. (For example, What Business Can Learn From Open Source by Paul Graham from August 2005.)
There is certainly still room for innovation sponsored by corporations. For instance, I’m not suggesting IBM has closed up shop on invention. In fact, they are still doing extraordinary things. But the days of the mini-inventor, the micro- supra-differentiated businesses are arriving. Or perhaps they have been here but are increasing in number. For as I’ve said in the beginning, and as I’ll say for a 3rd time at the end, there is nothing new.
Now I’ve cast the forward march of speed and transparency in communication in very personal terms thus far. But it’s true that these changes have affected the way businesses operate and compete just as much as its affected our daily lives. Supply chains can form and dissolve faster. Competition is fierce, and grows fiercer.
As I’ve posted on previously, enabling your organization to handle rapid changes in your supply base can be very difficult and often counter-intuitive. Procurement executives risk taking on unpopular positions in managing their programs. Yet industry by industry, procurement category by procurement category, Procurement must assess the velocity of intrinsic innovation and place a value on it. Then for key areas they should take on increased risk and exposure to reduce time to value generation.
Procurement managers wield a lot of power in today’s economic climate, and sometimes do so without realizing it. They have the ability to tap into innovation or kill it. The key question is to determine where innovation will drive operational improvements and competitive advantage, and when to stick to the traditional, old methods.
It wasn’t that long ago when GE was a vertical behemoth, mining their own raw materials all the way through selling to customers. And back then, that was best practice. In the 1990’s there was Dell, essentially a hardware design firm that assembled to order. They could rapidly shift their supply chain – and moreover, their supply chain was a source of their competitive advantage.
What firms will stand out in the 2000’s? What model will they use to tap into innovation and invention that their competitors miss until it’s too late? Will a collective and democratic approach to innovation and invention such as Open Source begin to pull away as a clear alternative to “bunkered, not-invented-here” mentalities? It sure will be interesting to see. My belief is that open, transparent innovation will move faster & further in the next few years. Time will tell. Procurement executives that tune in early, may just be able to find the type of strategic advantage for their company that early use of reverse auctions provided in 2000 and 2001.
But calm yourself as you bet on innovative new suppliers in key categories important to your business. Their ideas are probably not that radical, and also not that revolutionary. For as I’ll say one last time & in closing – when it comes to invention and innovation, its about incremental progress. After all, as Harry Truman once said, “There is nothing new in the world except the history you do not know.”
For more of Dave Stephens’ thoughts, check out Procurement Central, and for more on Coupa, you can start by checking out Michael Lamoureux’s post on Sourcing Innovation and stay tuned to ESF for more deep dives into Coupa in the near future. Thanks again Dave!
Unfortunately, I missed the timeliness for Dave Stephens new venture, Coupa. For those that read blogs, you know that Dave runs Procurement Central, which is a great source of information. He was kind enough to give me advance warning of his announcement but I was on vacation and could not post last week on it.
I also had a long conversation yesterday with Dave to get more understanding of Coupa and, needless to say, it is very exciting and interesting. I am really looking forward to some one of Dave’s intellect and experience to add more value to software solutions for this industry. Credible and valuable software is a rising tide that lifts all ships. Read Dave’s email and summary below and look for more about this soon.
copy for Iasta-
My New Venture
Today I’m announcing what many of you have been anticipating for some time – my new venture. It’s called “Coupa”, and it’s been operating in stealth mode for a few months now. Our small crew consists entirely of “Top Guns” from the Oracle Advanced Procurement team. It would be fair to say as a group we’ve designed & built quite a few Procurement products over the years. And we’ve come away with some pretty interesting beliefs that we now intend to test in the market.
At Coupa, we believe open source is the future of enterprise software. To that end, we intend to introduce best-in-class Procurement products at absolute rock bottom TCO based entirely on an open source technology stack. Our first product, a new take on eProcurement, will be available this July.
Why eProcurement and how is it different? I’ll delay answering these rather important questions for now. Suffice it to say those we’ve shared it with are saying things like “now why didn’t I think of that?!”
On the technology front, the Coupa team knows all too well today’s enterprise software is overly complicated, heavyweight, and yawn-inspiring. Our open source alternative aims to be the antithesis – lightweight, easy to deploy, and fun.
We expect to offer the software via traditional download and via SaaS. In the end, we believe you should retain choice on how you deploy your software.
Via open source, we will look to our partners and customers to help shape our products. We look forward to seeding the Coupa open source project & to growing an open source community around the Coupa initiative.
I encourage you to register on the Coupa website to receive our latest news. And here’s a new email address you can reach me at: dave at coupa dot com. We’d love to hear from parties interested in engaging in our open source projects. In addition, we have a few openings for early adopter customers who can engage with us in an advisory role. Finally, we’d love to connect with SI’s specializing in either open source or Procurement.
I am planning to continue to operate Procurement Central as a separate blogging conversation from Coupa. It will afford me the opportunity to continue to recount my Oracle experiences, as well as touch upon the current trends I’m seeing in Procurement. And now I can add news on the start-up & also be able to share the technology and functionality choices we’re making.
Thanks to all of you who pushed me to get off the beach and do this. I’m grateful for your support and encouragement & hope Coupa will eventually live up to your high expectations!
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