May 24, 2021

Coupa BSI: Business Confidence is Accelerating

Coupa
Procure-to-pay
businessspend
BSI
4 min
Coupa’s Business Spend Index reveals continued improvement in spending, signalling an acceleration in economic growth into Q3

Coupa Software, recognised with the Customers’ Choice distinction in the Gartner Peer Insights “Voice of the Customer”: Procure-to-Pay Suites 2021 report, has published findings from its Business Spend Index (BSI), Q2 2021 Outlook. 

Coupa has relaunched the BSI based on a revised methodology that is intended to help provide stronger insights to their community and better equip them to take action during these uncertain times.

As Jeff Collins PhD, VP of Business Value Engineering and Chief Ecomist at Coupa Software, writes in the Coupa blog, “As an economist, one of the most rewarding parts of my job at Coupa is being able to provide rich insights to our customers based on our unique access to high-quality business spend data. After all, spend is an expression of demand.  The BSI is powered by the billions of dollars of aggregated, anonymised, and permissioned business spend data flowing annually through our platform. This data provides an unparalleled look into the past, present, and planned spend of companies around the globe. In turn, this provides insight into the larger trends affecting our economy and industries.”

Leveraging insights from the Coupa Community, Coupa BSI is a predictive measure of business confidence. As measured by the BSI, this quarter showed continued improvement, increasing to 91.4.

The rate of improvement also accelerated, driven in part by strong order activity, suggesting that U.S. economic output is on a path to return to "normal" levels over the coming months. 

"It's encouraging to see signs of optimism in the economic outlook after the precipitous drop at the start of the pandemic," said Collins. "However, a full rebound will take time given slower improvements in some sectors, such as healthcare, manufacturing, and high tech that were hit with labour shortages and supply chain disruptions. In the near term, we expect the economy to improve modestly, accelerating throughout Q2 2021 as COVID infection rates decline and vaccinations increase."

Unsurprisingly, as businesses began planning a return to the office, spending on related goods and services increased. Data from this quarter showed the following quarter-over-quarter changes, measured by average spend per customer:

  • Air travel saw a 37.5 per cent increase in business spend
  • Office supplies increased by 20.5 per cent in business spend
  • Technology, including hardware, software, and services increased by 9.8 per cent in business spend
  • Contingent workforce spend decreased by 24.9 per cent
  • Shipping and freight spend increased by 65.3 per cent

Coupa further provides the following insights on key vertical industries:

It's important to note while we're seeing increased volatility at the individual sector level, the business confidence level continued to trend upwards when looking in aggregate across all sectors. The BSI reflects business confidence at the macroeconomic level and is highly correlated with output growth. While we estimate industry level Business Spend Indices for a handful of industries, they reflect only a portion of overall business activity.

  • Business Services: The BSI for Business Services increased as demand for business and IT services accelerated, driving improved confidence in the sector that was hard hit by the pandemic.
  • Financial Services: The BSI for Financial Services remained unchanged. Despite rising default risk, business confidence in the sector remained stable throughout the pandemic. Income support from a variety of programs will continue to prop consumer demand benefiting the banking industry in the near term.
  • Health and Life Sciences: The BSI for Health and Life Sciences decreased, driven by a significant decrease in Pay activity. We expect the sector to continue to perform below trend into Q3. Although hospitals are expected to see a return to more normal operations as vaccines become widespread, rising costs and staffing shortages will continue to affect output. 
  • High Tech: The BSI for High Tech was relatively unchanged this quarter. We expect the sector to continue to perform on par, however global chip shortages could disrupt activity in the sector and reduce growth.
  • Manufacturing: The BSI for Manufacturing decreased for the third consecutive quarter. Strong demand for materials, coupled with supply chain disruptions, drove price increases and wide-scale shortages.  
  • Retail: The BSI for Retail strongly decreased this quarter but remains above trend. Strong output from grocery and online retailers bolstered the sector overall. However, brick and mortar retailers continued to suffer, and retail employment remained depressed.

For more, including what you can learn from the BSI report to help your business, check out the Coupa Blog. You can also follow @Coupa on Twitter.

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Jun 7, 2021

Coupa Launches US$50 Million Ventures Fund

Coupa
BSM
Procurement
SourceDay
3 min
Business spend management (BSM) is coming back ─ and with its return, Coupa intends to invest in the future of its supply chain operation

Operational resilience and agility. Following the events of the last twelve months, companies have focused on these strategic areas like never before. Some, as we’ve noted, have started to wonder whether this trend will continue post-pandemic—or will we go back to the same old supply chain? Not if Coupa Software has its way. 

 

Last week, the company launched Coupa Ventures, a global fund that will invest US$50mn in early- and growth-stage companies that target business spend inefficiencies. “Coupa Ventures enables us to invest in a future where businesses and their suppliers can harness the power of their spend to constantly adapt, transform, and innovate”, said Rob Bernshteyn, Coupa’s Chairman and CEO. 

 

What’s Business Spend Management (BSM)? 

Let’s be honest, it doesn’t sound particularly sexy—it sounds like a subsection of the finance department. But business spend management, together with ERP (enterprise resource planning), CRM (customer relationship management) and HCM (human capital management) make up the core operating process of any company out there. When companies spend money, sign contracts, analyse supplier costs, take inventory or budget for the future, that’s BSM. Overall, business spend management is made up of three main areas: procuring materials, managing invoice, and handling expenses. Essentially, it’s the engine of the entire operation. 

 

Why Change It Up? 

According to Coupa, the next wave of BSM is now. It wasn’t always this way: in March of 2016, advisory giant Gartner claimed that BSM was dead. At that time, the firm was partly right. Companies couldn’t handle trillions of bits of data by themselves—and they were sinking as the waves of big data swept over their heads. 

 

But recent developments have meant that BSM isn’t fated to die just yet. “The key to optimisation is data—and not just any data”, Coupa stated. The company has supported community intelligence, in which machine learning uses anonymised data from hundreds or thousands of client companies to suggest better spend tactics. This way, companies can get better insight into their suppliers, track supply chain disruptions, and investigate procurement alternatives. 

 

This network effect is part of what makes Coupa Ventures so exciting. Said Eric Christopher, co-founder and CEO of Zylo, “We’re excited to join an expansive ecosystem of customers, suppliers, and partners”. 

 

 

First Companies in the Ventures Portfolio 

 

  • Zylo, a leading SaaS management platform that helps companies manage cloud-based applications, offers visibility into what software is being used, how much is present, and how a company can optimise its software investments. 

 

  • SourceDay, a leading supply chain performance solution, bridges the gap between a company’s enterprise resource planning (ERP) and its supply chain network. 

 

 

At SourceDay, Coupa’s investment is heralded as a chance for the company to really take off. “The investment from Coupa Ventures will...enable our joint customers to save money and leverage supplier performance as a competitive edge”, said Tom Kieley, SourceDay CEO. “We’re honoured to expand our relationship with the Coupa ecosystem”. 

 

Looking ahead, Coupa will capitalise on community intelligence to help its partners make smarter spending decisions. “[Organisations will] place bets on which investments will quickly pay off to accelerate their growth and resilience in the post-pandemic economy”, said J.J. Freitag, senior vice president of Corporate Development at Coupa. “[And] we’re looking to back the best ideas across Europe and beyond to help businesses build back even stronger”. 

 

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