Dive Brief:

• Coupa executives are seeing a "strong pipeline" of customers and increased requests for proposals as the pandemic brings greater attention to spend-management practices, sourcing and risk. CEO Rob Bernshteyn named several new customers on the company's earnings call Tuesday, including Engen Petroleum, Sekisui Chemical and Westpac Banking.
• The software-as-a-service provider reduced implementation times by one month, Bernshteyn said on the call. "We completed 100% of our go-lives remotely and did so with great efficiency" in the quarter ending July 31, Bernshteyn said.
• Coupa has witnessed higher demand for several of its products that Bernshteyn described as "quick ROI solutions." He pointed to the pandemic putting more focus on cost reduction and risk mitigation as reasons for the higher demand. 

Dive Insight:

Coupa's earnings presentation shows procurement departments are lining up to get a better grasp on cash flow, spend management and sourcing risk. The SaaS provider's new spend under management grew 20% over last year, and revenue from subscription services was up 34%. 

Oppenheimer analysts noted a "good pipeline" of customers as one of the highlights from Coupa's earnings call. "Coupa is successfully taking share in a large and lightly penetrated spend management [market]," the analysts wrote in a research note.

Circumstances surrounding the pandemic — such as cash flow constraints and limited supplier output — have increased the need for procurement leaders to save costs and manage risk (more so than they already do), according to Bernshteyn. "Where there is real disruption happening ... procurement and CFOs really have a chance to lead," he said, adding that the key focus areas in the near term are sourcing and risk.

Bernshteyn's conversations with supply chain leaders and chief financial officers revolve around supply chain disruption and seeking advice on how to transition away from single sourcing for certain suppliers and categories.

Several types of risk have amplified during the pandemic as well, from lack of inventory leading to stockouts, to clouded visibility beyond tier 1. A recent report from Verisk Maplecroft found an elevated risk of modern slavery in Asian manufacturing hubs, in part due to travel restrictions that left companies unable to audit in-person at supplier facilities.

Coupa has worked with customers on improving inventory visibility and management, an area that's often manual and/or inaccurate. "When you consider that inventory represents approximately 15% of the total assets for public companies in the United States, there's clearly a big disconnect," Bernshteyn said.

Coordinating inventory management with procurement can directly impact, and lessen, spend, he said.

One way to link the two is through technology or software. Coupa's customers are "clearly moving away from paper-based or disjointed processes to more streamlined centralized processes," Bernshteyn said.

But not all businesses have cash available to invest in software. Many procurement leaders are caught between a rock and a hard place, deciding whether to prioritize cost reduction or process automation. Oppenheimer analysts named "lingering adverse effects from COVID-19" as one of its downside risks for Coupa.

Coupa executives acknowledged sales cycles are longer, as "many customers and prospects continue to operate with caution," CFO Todd Ford said on the earnings call.