Coupa Software (COUP 63.14, +0.09, +0.14%) is extending its capabilities again:
this morning, Coupa announced the acquisition of Aquiire, which provides
real-time supplier catalog search functions.
The value of the acquisition is best understood with reference to Coupa Software’s core operations. Essentially, Coupa Software is a cloud-based provider of business spend management (BSM) software. Its platform provides clients with greater visibility into and control over monetary spending at their companies with the goal of empowering clients to identify and realize opportunities for saving money.
The company’s platform helps clients to monitor many different forms of corporate expenditure, from supply procurement to inventory balancing to travel charges, providing capabilities suited to different types of expenses and payments. Indirect spend -- that is, expenses related to the goods and services that support a company’s operations, rather than a company’s direct spend into its products -- is particularly difficult to manage due to inefficient employee spending behavior and disparate systems that obscure spending visibility. The core of COUP's platform consists of procurement, invoicing, and expense management modules that form the transactional engine and capture different aspects of a company's spend.
The company offers purchasing programs as well as a system known as the Coupa Open Business Network through which suppliers of all sizes can interact with buyers electronically, thus significantly reducing paper usage, improving operating efficiencies, and reducing costs. As more supplier vendors use Coupa’s BSM platform, the platform becomes more useful to clients, and the collective amount of spend under management increases.
COUP sells its product on its own, but it also works closely with systems integrators, including KPMG, Deloitte, Accenture, IBM, PwC, and Wipro, to drive enterprise adoption.
Turning to today's news, Coupa provided some rationale for the acquisition. Without real-time search capability, employees often waste precious time and productivity navigating catalogs across many different supplier websites to find the products they need. Joining Aquiire's patented technology to Coupa’s procurement and inventory-focused BSM Platform enables employees to access all the information they need across suppliers with one instant search. This instant search allows for real-time competitive shopping, which can result in lower purchase prices as well as improved overall employee productivity. As an interesting tidbit, Aquiire was recently named to the "50 to Watch 2018" list by Spend Matters.
This was not Coupa's only acquisition in the catalog space. In December 2017, Coupa acquired Simeno Holding AG, a provider of cross-catalog search and advanced catalog management. Simeno creates localized content from third-party supplier sites to power cross-catalog searches, including content from many of the leading B2B marketplaces.
From an outside perspective, catalogs might sound vaguely obsolete these days. But many suppliers still use catalogs for parts or products they sell to other businesses; they are especially prevalent among companies purchasing from another company. Given that prevalence, this acquisition boosts the capabilities of the Coupa BSM Platform.
Furthermore, Coupa has said that one of the emerging trends within procurement technology is the ability to bring more spend under management by integrating “out-of-catalog” purchases while maintaining control of a company's approval workflows and business rules. Coupa sees itself as leading the charge in this area, firstly by integrating Amazon Business in a unique way then by integrating Simeno's cross-marketplace search capabilities into its platform. Today's purchase of Aquiire will further this goal.
From a broader perspective, COUP sees a lot of growth ahead given that spend management is still in the early adoption stage. COUP says that only maybe 20-30% of spend is actually being managed through an IT platform. Most of it still being managed through paper, fax, email, phone calls, and related traditional methods. COUP sees a very sizable multi-billion-dollar marketplace that is just starting to be tapped into.
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