THE2022BUSINESSSPENDMANAGEMENT(BSM)

BENCHMARKREPORT

Unitedby

thePower

ofSpend

20Community-PoweredKPIsfor

Best-in-ClassPerformanceAcross

Procurement,Risk,Invoicing,

Expenses,andPayments

POWEREDBYCOMMUNITY.AI

THECOUPABSMBENCHMARKREPORT

TableofContents

Introduction:WhyCommunityData?

3

UnitedbythePowerofSpend

5

Environmental,Social,andGovernance(ESG)

8

SpendWithDiverseSuppliers

9

Source-to-Contract

10

ContractManagementCycleTime

11

StructuredSpend

12

On-ContractSpend

13

PrimarySuppliers

14

Procurement

15

ElectronicPOProcessing

16

Requisition-to-OrderCycleTime

17

ServicesRequisition-to-OrderCycleTime

17

ServicesProcurementWorkConfirmationCycleTime

18

Pre-ApprovedSpend

19

SupplierandThird-PartyRiskManagement

20

SupplierInformationManagementCycleTime

21

RiskManagementEvaluationCompletionRate

22

RiskManagementEvaluationCycleTime

23

Invoicing

24

ElectronicInvoiceProcessing

25

InvoiceApprovalCycleTime

26

First-TimeMatchRate

27

Expenses

28

ExpenseReportApprovalCycleTime

29

ExpenseReportLinesWithinPolicy

30

Payments

31

InvoicesPaidDigitally

32

SuppliersUsingDigitalPayments

33

PaymentBatchApprovalCycleTime

34

Conclusion:UnitedbythePowerofSpend

35

AboutCoupa

37

THECOUPABSMBENCHMARKREPORT

3

INTRODUCTION

WhyCommunityData?

It’satimeofgreatchangeformanyindustries.Globaleventsareforcingustoreevaluateourprioritiesandwaysofworking.

Ifyou’regoingtomakechanges,it’simportanttomeasureyourprogress.It’sequallyimportanttohavestandards—benchmarks—tocompareagainst,soyoucancreatetangiblegoals,takeclearaction,andevaluateyourprogress.

TraditionalBusinessSpendManagement(BSM)benchmarks,whicharebasedonself-reportedsurveyinformation,provideausefulbutincompletepicture.

Thisreportistheindustry’sonlycollectionofbenchmarksbasedentirelyonharddatafromrealbusinessspendtransactions(munitydata).Wegatheredthesedatapointsthroughthepowerof

Community.ai

,aninitiativethatcombinesdata-driveninsightswithhuman-to-humanconnections.ByanalyzinganonymizedtransactionsfromthousandsofcustomersacrosstheCoupacommunity,Community.aiisabletoprovideadeeperlevelofinsightthanwithsurveydataalone.

InsightsfromCommunityData

6.5BusinessHours

TOAPPROVEEXPENSES

Withbusinesstravelandexpenses

(T&E)expectedtorise,leading

organizationstookonly6.5

businesshourstoapprove

expensereports.

bestpractices.

$2M

PERBILLIONINSPENDIDENTIFIEDASSUSPICIOUS

Coupa’sCommunity.aiintelli-

gentlyanalyzesbusinessspend

for

potentialfraud,usererror,

andprocessavoidance

.The

averagebuyeridentified0.2%of

theiroverallspendinCoupatobe

non-compliant.

AseffortsaroundEnvironmental,

Social,andGovernance(ESG)

grow,best-in-classcompanies

currentlyhave15.4%oftheirtotal

supplierbaseclassifiedasdiverse.

Traditionalspendmanagement

approachestypicallyyield2%to

3%insavingsrelativetooverall

spend.Topperformersthisyear

savedfarmorebyapplyingBSM

15.4%

DIVERSESUPPLIERS

6.3%

OVERALLSAVINGS

Thebenchmarkslaterinthisreportrepresentbest-in-classperformanceforeachKPI.EachbenchmarkmeasurementrepresentsthemedianvaluesofthetopquartileofCoupacustomersforthatKPI.

ByaggregatingdatafromtopperformersontheCoupaBSMplatform,weaimtoprovideyouwithadata-drivenperspectiveofwhatBSMsuccesslookslike,toguideyourowndigitaltransformationefforts.

LearnmoreaboutCommunity.ai

THECOUPABSMBENCHMARKREPORT

4

Environmental,

Social,and

Governance(ESG)

Source-to-Contract

SupplierandThird-PartyRiskManagement

Invoicing

Expenses

Payments

INTRODUCTION

20KPIsforBusinessSpendManagement

SpendWith

DiverseSuppliers

PrimarySuppliers

Contract

Management

CycleTime

StructuredSpend

On-Contract

Spend

Procurement

ElectronicPO

Processing

Requisition-to-

OrderCycleTime

ServicesProcurement

WorkConfirmation

CycleTime

Pre-ApprovedSpend

RiskManagement

Evaluation

CompletionRate

SupplierInformation

Management

CycleTime

RiskManagement

Evaluation

CycleTime

InvoiceApproval

CycleTime

First-Time

MatchRate

ElectronicInvoice

Processing

ExpenseReport

ApprovalCycleTime

ExpenseReport

LinesWithinPolicy

SuppliersUsing

DigitalPayments

Invoices

PaidDigitally

PaymentBatch

ApprovalCycleTime

THECOUPABSMBENCHMARKREPORT

5

UNITEDBYTHEPOWEROFSPEND

UnitedbythePowerofSpend

Howtobreakdownsilostosolvetoday’sgreatest

businesschallengesusingBusinessSpendManagement

“BusinessSpendManagementallowsustohavegreatertransparencyandinsightsto

steerourbusiness

.Wearenotonlyabletocontrolwhatpeoplearebuying,buthavethebestpossibleconditionswithoursuppliers.”

—Zalando,Germanmultinationalfashione-commercecompany

SPENDISTHEFUELOFBUSINESS

Thebestcompaniesintheworldseebusinessspendasadriverofgrowthandsuccess.

Thoughitoftengoesunnoticed,spendactuallysitsbehindeverycompanydecision,whetheryou’rebuildingamorerobustsupplychain,satisfyingyourboard’sEnvironmental,Social,andGovernance(ESG)mandates,orjusttryingtobemoreefficient.

Howeffectivelyyoumanageyourspendimpactshowsuccessfullyyourorganizationruns.

SMARTERSPENDINGCANHELPYOUOVERCOMETODAY’SBIGGESTCHALLENGES

Today’senvironmentisparticularlyunforgivingofpoorlyrunorganizations.Operatingamodernbusinessrequiresbeingresilient(whenfacedwithglobaldisruptions)whilealsobeingresponsible(contributingtosustainability,diversity,andsocialimpact).

Eachofthesechallengesisnotoriouslydifficult,andonlythebest-runorganizationscantacklebothsimultaneously.Thisiswherethesmart,strategicmanagementofbusinessspendcanreallymakeadifference.

Byhavingvisibilityandcontroloveryourentireend-to-endspendmanagementprocesses—fromsourcing,topayments,tosupplychaindesign—youcanmakereal-timedecisionstooptimizeyourbusiness,nomatterwhatoutsidefactorsareatplay.

ThepracticeofharnessingthepowerofspendcomprehensivelyacrossyourorganizationiswhatwecallBusinessSpendManagement(BSM).It’sbestaccomplishedwithsmartprocesses,sharppeople,strongsupplierrelationships,and,crucially,dataandtechnology.

Learnmoreaboutthepowerofspend

THECOUPABSMBENCHMARKREPORT

6

UNITEDBYTHEPOWEROFSPEND

DIGITALTRANSFORMATIONOFSPENDMANAGEMENT

TounderstandthepowerofBSM,weneedtorememberhowcompaniesmanagedspendhistorically.

Alongwithcustomersandemployees,suppliersarecriticaltothesuccessofanyorganization.Yet,overthelasttwodecades,majordigitaltransformationinvestmentshavefocusedmainlyoncustomer-facinginitiatives.Thedomainofsuppliersandspendstayedinthebackground,stuckwithlegacytechnologystacks.

Now,asbusinessenvironmentsbecomemorecomplex,companiesaretakingawiderlookathowdigitaltransformationofspendmanagementcanproduceresults.

BSMisincreasinglyseenalongsideCustomerRelationshipManagement(CRM)andHumanCapitalManagement(HCM)asacorecompetencyofsuccessfulorganizations.

WHYBSMWORKS

BSMstartswithusingtechnologytoobtain

aunifiedview

ofallthespendinyourorganization.Alongwiththiscomesthecapabilityandagilitytomakequickdecisionswhilemitigatingrisks.Whenimplementedproperly,BSMallowsyoutomakebetterchoicesaboutwhichsuppliersyouworkwith,whatinitiativesyouinvestin,andhownimbleandeffectiveyourorganizationis.

BSMismorethanjustprocuring,sourcing,invoicing,makingpayments,handlingcontracts,managingsuppliers,ordoinganyothersinglebusinessactivityalone.It’saboutharmonizingabroadrangeofspend-relatedprocessestogethersothatoverallbusinessvalueismaximized.

BSMmaximizesvalueby:

IMPROVINGOPERATIONALPERFORMANCE

Reducingtimeandeffortand

freeingupresourcestofocuson

higher-value,strategicwork.

REDUCING

RISK

Emphasizingcomplianceand

governancesoyoucanbemore

awareoftherisksinvolvedwhen

usingthirdpartiesandmitigatethem.

OPTIMIZING

SPENDANDCASH

Empoweringyoutouseyour

financialresourcesmore

thoughtfullyandstrategically.

AsyoureadthroughtheKPIsinthisreport,you’llseewhichofthesethreeareasbenefitsthemostfromperformanceimprovements.

UNITEDBYTHEPOWEROFSPEND

UNITEDBYTHEPOWEROFSPEND

UnlikedigitaltransformationeffortsaroundCRMandHCM,whichsuccessfullybrokedowndatasilosandprovidedcentralizedworkflowsforallstakeholders,spendandsupplychainprocessestoooftenremainfragmented.

Thegoodnewsisthatorganizationsarestartingtomakechanges.Leadersarerealizingthatsourcing,procurement,finance,treasury,legal,compliance,supplychain,andsustainabilityteamsneedtobeabletoworktogethertosolvetoday’sgreatestchallenges.Andacrossorganizations,theBSMcommunityiscomingtogethertoshareinsightsandbestpractices.

ThisannualreportdemonstratestheexceptionalachievementsoforganizationsthathavemadesolidprogressintheirBSMjourneys.It’salsoatestamenttoaBSMcommunitythatbelieveswecanallgrowstrongerandbuildabetterworldbylearningfromoneanother.Forthisreason,eachbenchmarkinthisreportispairedwithstrategiesthathaveworkedformanyorganizationsandthatwebelievewillfuelyourowntransformationsuccess.

Readytostartyourjourney?

Let’sgo!

THECOUPABSMBENCHMARKREPORT

7

Environmental,Social,

andGovernance(ESG)

“Wehaveamoreassertiveandprecisevisionof

theopportunities.AcommongoalistomeettheESGtargetssetbythecompanyfor2025,2030,and2050.”

—SaintGobain,Frenchmultinationalmanufacturer

?AchievingESGgoalshasbecome

abusinessimperativeofgrowing

importancetoboardsofdirectors,

investors,customers,employees,

andthegeneralpublic.Companies

areexpectedtoprioritizemeaningful

ESGinitiatives,

measureimpact

,and

betransparentabouttheirprogress.

?Thoseinprocurement,finance,and

supplychain

playkeyrolesincreating

apositiveimpactfortheircompanies

byintegratingESGconsiderations

intotheirspendingdecisionsand

measuringimpact.

?Supplierdiversity,inparticular,isa

growingcorporateESGprioritythat

canbereadilymeasuredwithdata

andtechnologiesavailabletoday.

LearnmoreaboutSustainable

BusinessSpendManagement

THECOUPABSMBENCHMARKREPORT

DEFINITION:

SpendWithDiverseSuppliersmeasureshowmuchofacompany’stotalspendgoestosuppliersclassifiedasdiverseacrossarangeofcategoriesestablishedbygovernmentsaroundtheworld.

WHYITMATTERS:

?Companieshavesetcommitmentstoincreasetheirbusinesswithdiversesuppliers,aspartoftheirESGprograms.

?Governmentcontractorsarerequiredtotracktheirspendwithdiversesuppliersandmeetaggressivetargets(15%oftheirtotalspend,intheU.S.).

?Buyingfromdiversesupplierscreates

realimpactbydirectlysupportingdiverseowners,theiremployees,andbyincreasingeconomicactivitywithintheircommunities.

ENVIRONMENTAL,SOCIAL,ANDGOVERNANCE(ESG)

>SPENDWITHDIVERSESUPPLIERS

SpendWithDiverseSuppliers

OPTIMIZINGSPENDANDCASH

23.9%PRIMARYBENEFIT:

HOWTOIMPROVE:

HIGHERISBETTER

Requireatleastonediversesuppliertobeincludedineachsourcingevent.Providediversitymanagerswithvisibilityintonon-diversein-flightsourcingeventsandspendrequisitions,sothattheycanproactivelyprovidesupport.

Monitordiversesuppliersforriskindicatorsandproactivelyintervenebyextendingmoregenerouspaymenttermsorreviewinggeneralcontractrequirementsthatmaycausehardship.

Participatein

community-powered

programs

thatprovidepre-sourced,diversesuppliersincommoncategories.Flagdiversesupplierstoendusersdirectlywithinthesearchresultsofyourprocurementsoftware.

?

?

?

Learnmoreaboutworking

withdiversesuppliers

THECOUPABSMBENCHMARKREPORT

9

Source-to-Contract

“ContractLifecycleManagementprovedtobeabig

winforIT,procurement,andlegal

—wewereable

tocompleteacriticalcontract

inweeksthatwouldhavetakenmonthstonegotiatebefore.”

—SonicAutomotive,Americanautomotiveretailer

?Asaresultofrecenteconomicdisruptions,

spendmanagementprofessionalsare

reexaminingtheirapproachtocontracts.

Somearefavoringmorecontracts

withshortertermdurations.Others

arechoosingtogo“all-in”withafew

trustedsuppliers.

?Beingabletodeftlycreate,access,

andapplycontractsisessential.Quickly

movingtheresultsofsourcingactivities

andriskmitigationtermsintocontracts

increasesagilityandmaximizesthevalue

ofsuppliernegotiations.

Learnmoreabouttheconnections

betweensourcingandcontracting

THECOUPABSMBENCHMARKREPORT

HOWTOIMPROVE:

LOWERISBETTER

ImplementContractLifecycleManagement(CLM)capabilitiesthataretightlyconnectedtosourcingandthird-partyrisktoacceleratedraftingandtoensurethatsourcingresultsandriskprotectionsarerecordedaccurately.

Usestandardcontractclauselanguage,digitalworkflowsandapprovals,andriskscoringtoacceleratecontractreviewandapproval.

ConnectyourCLMdirectlytopurchasingandinvoicevalidationtoimmediatelystartrealizingthevalueofnegotiations.

?

?

?

LearnaboutintegratingCLM

intoyourprocure-to-pay

(P2P)processes

SOURCE-TO-CONTRACT

>CONTRACTMANAGEMENTCYCLETIME

ContractManagementCycleTime

PRIMARYBENEFIT:

IMPROVINGOPERATIONALPERFORMANCE

8.1BusinessDays

DEFINITION:

ContractManagementCycleTimeisthe

timebetweenrequestingacontractand

thecontractbeingsigned.

WHYITMATTERS:

?Typically,companieshavealreadydonetheup-frontworkofsourcingasuppliertomeetabusinessneed.Acontractisnecessarytoformalizetherelationship.Longcontractcycletimesdelaythebusinessbenefitsofnewagreements.

?Longcycletimesalsocausethebusinesstostartworkingwiththenewsupplierbeforethecontractisactuallysigned.

Thiscreatesrisk

becauseanyprotectionsinthecontractarenotyetinforce.

?Fastertimetoexecutecontractsalsoremovesuncertaintyintheoverallsupplychain,leadingtobetterplanningandquickerbusinessenablement.

THECOUPABSMBENCHMARKREPORT

11

DEFINITION:

StructuredSpenddescribesthepercentageofspendthatgoesthroughcompany-hostedandvendor-hostedcatalogs(a.k.a.punch-outs).

WHYITMATTERS:

?Catalogsandguidedformsdrivecontrol,efficiency,andlowerprices.Standarditemdescriptionswithpreferredpricesandtermsavoidtheproliferationofitemsandsuppliersthatresultfromad-hocpurchases.

?Maximizingstructuredspendoffersascalablewaytomanagechangeandenablesyourbusinesstoadaptquicklyasgoodsandservicesareintroduced.

?Employeesbenefitfromhavingmoreinformationregardingavailability,discounts,andshippingcosts;suppliersbenefitfromfewererrorsincommunication.

SOURCE-TO-CONTRACT

>STRUCTUREDSPEND

StructuredSpend

64.8%

PRIMARYBENEFIT:

OPTIMIZINGSPEND

ANDCASH

HOWTOIMPROVE:

HIGHERISBETTER

Usedigitalsystemstoeasilycreatevendorcatalogswithminimaleffortforyouandthevendor.

Makesurethebuyingexperienceisseamlessandintuitive.Canemployeeseasilysearchforwhattheyneed?Dotherightitemsshowupinsearchresults?

Ifpossible,useproven,trusted

platformsandprograms

toreducetheworkloadofestablishingcatalogsandpunch-outs.

?

?

?

Learnmoreabout

source-to-pay(S2P)

THECOUPABSMBENCHMARKREPORT

12

HOWTOIMPROVE:

HIGHERISBETTER

Implementacategorysourcingstrategyinwhichthecategoriesthatdeliverthegreatestvaluetothebusinessarestrategicallysourcedwithnegotiatedpricesandterms.

EnsurethatcontractsarequicklyandeasilyimplementedintopurchasingpolicythroughanintegratedCLMsystem.

Makesureyourprocure-to-pay(P2P)systemiseasytouseforemployees,andthatitautomaticallyservesupcontractedgoodsandservicesinthesearchresults.

?

?

?

Learnmoreabout

managingcontracts

SOURCE-TO-CONTRACT

>ON-CONTRACTSPEND

On-ContractSpend

79.2%D

DEFINITION:

On-ContractSpendmeasuresthepercentage

ofspendputthroughpre-negotiatedcontracts

toenablebetterpricesandterms.

WHYITMATTERS:

?Havinggreateron-contractspendreducesthefinancialriskandbusiness

costsfromsupplierliabilityorwrongdoing

bychannelingspendtosupplierswho

haverisk-relatedcontractprotections.

?Greaterspendoncontractenablesprocurementtonegotiateevenbettertermsandlowerpricinginthefuturebyhighlightingthefactthatalargeamountofspendhasgonethroughexistingcontracts.

?Sincepaymenttermsarenegotiatedinthecontract,gettingmorespendoncontractletsyoutakeadvantageoffavorablepaymentterms,whichimprovescashflow.

THECOUPABSMBENCHMARKREPORT

13

DEFINITION:

PrimarySuppliersisthepercentageoftotalsupplierswithwhomacompanyspends80%ofitstotalspend.

WHYITMATTERS:

?Tailsuppliers(thosewithwhomanorganizationspendsverylittle)aremadeupofnichesuppliersforimportantgoodsandservicesandduplicatesuppliersincategoriesthathaven’tbeensourcedormanagedproperly.

?Spendingwithtailsuppliersisundesirable

becauseyouaren’tconsolidatingyourspendtogetbetterprices.Italsocreatesexcessivecostsandpotentialdanger,sinceresourceconstraintsoftenforceriskmanagementeffortstoprioritizesupplierswithgreaterspend.

?Reducingtailsuppliers(increasingprimarysuppliers)generatesincreasedvaluethroughnegotiatedcontracts,greaterbuyingpower,lowerrisk,andfavorable