Business & Technology Nexus

Dave Stephens on technology and business trends

Why eProcurement

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After developing Oracle’s eProcurement solution under the leadership of Kevin Miller back in 1997 and 1998 it may seem odd that Noah Eisner and I chose to build our first open source Procurement module in that venerable space. But it’s not. Year in and year out, our experiences led us to believe eProcurement was the place where the “rubber met the road” in terms of effectively managing Procurement across an organization.

And here are some numbers to consider. Worldwide, we estimate eProcurement penetration from Oracle, SAP, Ariba, Ketera, etc, at no more than 7,000 companies. We think that represents live support contracts and subscriptions. Yet many of these support contracts are for implementations that are now inactive – ones that were once started but now abandoned. Many others are “limping along,” never having achieved control over the majority of employee spend.

But even if you assume these 7,000 companies and public sector organizations were delighted with their <insert vendor name here> eProcurement solution, there is still a universe of around 50,000 we think could benefit from an open source solution.

Choosing to deploy an eProcurement solution to your organization is the Football equivalent of “running it up the middle.” It doesn’t get much more basic than promoting self-service buying. It’s useful, important work. And that makes it fun to work on & very rewarding. Noah and I have always enjoyed execution and transaction automation in Procurement over complex optimization and theoretical modeling.

So we thought: wouldn’t it be great to bring the power of effective Procurement to companies of all sizes? And wouldn’t it be great to bring some innovation to a space like eProcurement, which really hasn’t changed that much over the past decade?

As I’ve written previously, I believe Ariba ceded the eProcurement market to SAP and Oracle with their Freemarkets acquisition. It was a good move at the time. They were following the money. Nowadays they still give eProcurement good lip service, but since it is not a revenue driver it can’t get the same focus as their other business areas. Ketera is doing some good work. But the drop-off is dramatic. And so there’s been less innovation in eProcurement than perhaps in an area like Sourcing.

Well, we aim to change that. We hope to offer a true alternative to the Oracle / SAP duopoly rapidly developing in this space. Please join us!

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Written by Dave Stephens

07/24/06 11:59 PM at 11:59 pm

Posted in Coupa, Opinion

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