Name: The New Era of Direct Spend: A Roadmap to 2.6x ROI and Direct Procurement Maturity
Uploaded: 2026-03-26T17:30:06.275Z
Duration: 59 min 26 s
Description: The New Era of Direct Spend: A Roadmap to 2.6x ROI and Direct Procurement Maturity

Transcript for "The New Era of Direct Spend: A Roadmap to 2.6x ROI and Direct Procurement Maturity": Welcome everyone to the new era of direct spend, a road map to 2.6 x ROI and direct procurement maturity webinar. We are very thrilled to have you join us for our session. Just a quick of logistical points before we dive in. We welcome questions at any time. You can use the q and a box in your viewer, and we will address them live throughout the presentation and during our dedicated, q and a segment at the end. If you're having trouble seeing slides, please use the expand or Zoom features. And one of the things we have also done is we have added the slides in the docs, folder out here. So if you click on the docs area, you can download the slides that we are presenting today as well as you can download the ebook that, form the source of the materials that we'll be sharing today. So my name is Nari, Nari Viswanathan. I am the head of product marketing for supply chain and direct spend at Coupa. I would like to introduce our speakers today. We have Jeff Gilkerson with The Hackett Group who will be providing us with key industry perspectives. Also from Coupa, we have Eric Bjorndal, who is a category management expert, consultant, trainer, and coach, who will be walking us through some of the key areas of Coupa category strategy, I mean, how it fits in within the concept of direct procurement maturity. Today, many organizations remain trapped in reactive procurement. And what they see as the impact is in terms of missing components, shutdown of plants, things of that nature, all sorts of supply chain disruptions. Stage one of our maturity model looks like this. Companies are operating in email purgatory, essentially, chasing unconfirmed purchase orders across manual spreadsheets and disconnected ERP silos. These companies do not have the visibility to their strategy and how it executes, and this is the reason why margins error. I'm going to be turning it over to Jeff now to talk about how ROI is an important factor here. Yeah. Thanks, Nari. So based on our research, digital world class procurement organizations that are using, technology and in generative AI are seeing significant performance advantages. You can see on here these aren't simply incremental improvements. Right? Two and a half times greater ROI, 30% fewer resources, 20 almost 20% fewer, or lower cost. And, actually, what we're seeing is as, AI evolves and and adoption accelerates, the gap is actually widening between digital world class organizations and others. So we expect that gap to get even bigger over time, and it's really a fundamental shift in what's possible as we go through this. However, we can't ignore the human element of this, the the process element of it. Technology and and AI, in particular, have a an important and critical component of this, but we wanna make sure that we can use it optimally and that we can, you know, really drive and, you know, leverage the AI and and technology to to get all those benefits. So in this webinar, we're we'll talk about how companies, that are looking to manage their direct spend and refocus their attention on that process, can reimagine the process and and and landscape in the in the context of AI. Great. So you. Thank you, Jeff. And to get us started, we wanted to have a poll question. The poll question is essentially about where does your direct procurement organization sit today? We have about four choices here, you know, talking about whether it's mostly reactive, manual, and siloed. Is it structured with defined sourcing and category processes? Is it collaborative, cross functional, data driven? And then the fourth choice is AI enabled predictive intelligent supply network. Really appreciate it if you could share your thoughts. This is an anonymous input, so, you know, it'll it'll help us to really get an idea of where companies are today in the spectrum. I'll give a few seconds for the audience to chime in. And once we get some critical mass, we can we can look at the result. The words are coming in, so if you could, kindly, let us know where you stand. K. Maybe ten more seconds, and then we'll, look at it. Okay. I think in the interest of time, let's let's look at the results. So, my observation is it kind of follows the pattern that we have seen in other service where most companies are stuck in the stage one and two. So we have stage two is kind of the highest number of companies followed by stage one. Very few companies are in stage three, and literally no one is in stage four. So that is some kind of a big drop off that's happening between stage two and three, and that's that's very interesting because that's that's exactly what we see as well. So I want to go back to the slides now. Thanks for those who, you know, answer to the poll. And I want to use the opportunity to introduce our direct spend maturity model, and that's the maturity model that we have captured as part of the ebook that we have published. You can download this report. It's available in the docs area. And, you know, just to summarize very quickly, this this particular report was done jointly with The Hackett Group, and we really looked at what is the different dimensions associated with their expense. So we didn't not only look at the different stages that are out there, but we also identified people, process, and technology dimensions, which are very relevant for companies to move along in this maturity model. So what it really means is companies can be mature in in for example, from a people perspective in some areas, whereas from a technology perspective, they're not be that mature. So it's very granular. Once you go through it, you will see that it's it's quite to be quite useful for anybody using it. So, Jeff, do you want to share some thoughts about the whole process, how we collaborated on it, and so on? Yeah. I think I alluded to it in the intro. This is actually something we use with a lot of our clients, a variation of it, to help them understand where the opportunities are, across what we would call service delivery model, which is your people, process, and technology, so that you can look at, well, it it's not just about you may be more mature in some areas, maybe less mature in other areas, and it allows you to really hone in and dial in where do you need investment, where are there where where do we wanna focus on improving? And I think we often, as we go through this with a lot of our clients, say, where do you wanna get to level four? Maybe you don't wanna be level four in everything, but there's gonna be some areas that it's really important that you get to level four. And maybe some of it's gonna be staged where we we wanna get to level three kind of in the next six months, and, you know, we have a a twelve to eighteen month window to get to level four. But it allows you to go through that planning. And I think, importantly, it's not just we all you know, if you read paper or listen to to any of the the news out there, right, it's all about AI. And, yes, that's important, but the AI and the technology isn't gonna work. You're not gonna see all of the benefits if you don't, adjust all of the elements of of the the people and process. So, we'll we'll talk a lot about that today. And when you look at the model, you'll see, yes, there's a heavy dose of here's what the technology can do, here's what AI can enable, but it's not only focused on that. So as you go through it, that that that holistic view, is critical. Yeah. Excellent. Yeah. Thank you. So we now if you look at what is the reason why we saw that companies were stuck between stage two and stage three. And real if you if you think about it, that's that's essentially the result we also saw, right, in the the pool that did. We kind of was this pattern where there's a big drop off that happened between stage two and three. And one of the biggest reasons was that companies had a strategy, but they didn't have a way by which they could really connect to execution. They also had challenges with other aspects in terms of their inability to do sourcing through an optimized process, lack of visibility to their supply chain, and things like that. But the biggest area is the the notion of category strategy. So I want to introduce Jeff. And, actually, I want to introduce Eric to talk about this particular point now of where the breakdown happens in the maturity curve. Frankly, both of you can chime in. So Yeah. Sure. So if we, if if we think about category strategy and where where we break down and we have a slide that we'll cover maybe later on this in more depth. But the challenge happens when we we do category management. We we think about our stakeholders. We think about execution. But there's something in between that we have to have that drives the action, that drives the behavior, and, of course, that's category strategy. So we'll talk about that more, maybe in a slide or two, but I think that's that's where we're we're really I think the the breakdown happens. Yeah. Yeah. I think the the category strategy is really right. If you think about level two, it's going it's getting you to an efficient and relatively relatively efficient and automated process. Right? So it's taking manual work. It's automating it. You're getting some efficiency, and it there's a lot of value in that. But the problem is a lot of organizations get stuck in that of, okay. Well, now I've got the talent and the processes to do things quickly, and I've automated it. But now I've gotta take to get to level three is you've gotta take that step up to say, how do I add more strategically? How do I leverage that automate you know, the time saved and and the opportunity they have from from that automate you know, from automating this to to drive more value? And I think Eric will go through kind of a process and technology, but but at a high level, there's really I think there's there's five things that we typically see, at to make kind of category strategy alive. So one is the integration with product life cycle and, management systems and and, the engineering teams. Right? So, you know, you your product design product design and procurement decisions can't be, separated. Right? What you know, 80% of the cost roughly is locked in once you made the design decisions. And so if the drug procurement team doesn't have a a seat at the table and isn't actively involved in that working with the supply base, working with the teams to do that, you're gonna be limited in what you can execute. So having having those systems linked, but then also having those processes and and people linked, just as importantly. You know, making sure you understand your bill of materials. Right? This is the the product's recipe, but it it's not just a list, right, when you go to the grocery store and create a list for for shopping. It you know, it's hundreds or or thousands of lines. There's interdependencies. There's quality considerations that you gotta take into. There's alternatives. Right? What if how do we manage, if we have to go from one supplier or we have to get it from a different source? So all of that information, you need to really understand that. It's tied to working with the engineering and product team, but that's a critical part when we think about strategy is how do you incorporate that into the strategy. And then you can use the technology to to leverage that, to automate that, to be more efficient, but there is a a people element to that as well. You know? And then it's really looking at the, you know, what I would call the the total landed cost. And and what I mean by that is it's not just what's my unit price and, you know, what's it what does it cost to ship it? You've gotta think about things like geopolitical risk, transit times, there's a quality. And so when you go through all of that sourcing, how do you then optimize that, right, to look at supply assurance, defects, lead times, inventory, and price. Right? So through all of that and and be agile in it because as we've seen in the last month, shipping routes close, you know, over the last year. There's been multiple times when we've had to reconfigure supply chain scramble to get this. So how do you, you know, keep production running? Because at the end of the day, the supply assurance from a direct is is the single most important thing we can do. There's no amount of savings that we can do, whether it be from automation or negotiation or, you know, design, managing specs and and designing smartly. There's no amount of money that we can save doing that that's gonna offset revenue loss if we if we don't shut it down. So, you know, when we when we think about a strategy, that's what I it sounds simple. Right? I have a category strategy and you know? But it's not just about putting it on paper. It's it's thinking through and and having your arms around all of, you know, those five elements to drive to drive that strategy. And that and that is the the jump. Right? So going from two to three. Then as you go to level four, right, it's, you know, even more automation, leveraging AI, advanced analytics. Not to downplay those, but just getting to level three, right, is is a big jump for for a lot of organizations and really a mindset shift Yeah. for a lot of them. That that's critical. Think I I think the summary is focus a lot of energy and going from level two to level three along. as dimensions as possible before you think about going to level four. Yeah. Exactly. No. Okay. So we are ready for, another poll. And the focus of this poll is around the specific focus on the direct categories. So we want to know about if you think about all of your direct categories, how many have a documented strategy tied to business goals? Less than 25 percentage, 20 to 50 percentage, 50 to 75 percentage, and more than 75 percentage. Again, we'll leave a few seconds for the audience to send in their comments. Thanks for submitting your inputs. We'll wait for a few more seconds. K? So I think, the gist of the message or the the results that we saw so far is, again, this whole shift happens where most companies are in those level, less than 25 percentage and 25 percentage to 50 percentage area. So and very few companies which are between 80 to 100 percentage. So, again, there is a big gap that exists between from going from a 50 percentage to a 100 percentage standpoint. And those are some other things that we'll be exploring as we go into the next section of our presentation. And I want to, hand it over to Eric to. talk about that. There we go. Okay. So before, I was telling you guys there's a slide, and and Jeff did a great job explaining there's there's breakdowns that happen between step two and three. And he the reality, guys, is that the there are so many challenges. If you if you think about the past seven years of procurement, like, you started procurement seven years ago, the this has been the most insane profession to be in because we've seen almost everything happen in the world of procurement. Right? And so the inputs at the top of this this slide here, we're talking about, you know, taxonomy, experiences, failures, category management, all these inputs into the procurement experience are happening. And then we put together a category strategy that organizes and gives purpose. It's your GPS, your compass. Sometimes I even say it's a religion. It's like a guiding compass on how we make decisions in what value we capture, what what things we prioritize, how we show up to meetings, the suppliers that get preference. This middle section of category strategy, it gives purpose and organizes key things, to make sense and for us to ultimately execute and transact in a much more efficient and faster and more effective way. And so what I wanna do now, I wanna switch over. I'm actually gonna show you guys a a demo of the tool of an actual category strategy in Coupa Software category strategy. So let me stop sharing and then share my screen. Here we go. So I have a category strategy that I built, and I'm gonna walk you guys through a really, really fast version of what this technology does, how our logic is is created, and then why this is so important for directs. Like, this is so important. But the first thing I wanna highlight is that our first three tiles, stakeholder mapping, business requirements prioritization, and then a deeper dive of the business prioritization. This is all about this is all central to the idea that people matter and people are fundamentally super important into how strategy at the end is able to be executed. And here's what I mean. If I click on stakeholder mapping, we actually map out what's the level of influence of the stakeholder and what's the impact to the stakeholder. Right? And as we think about people in our world, guys, everybody that's been in procurement, especially in direct, oftentimes, they hold the budgets or or engineering maybe or quality or, these type of stakeholders are are the ones that typically have had challenges or stand up in rooms and say, hey. We don't have the resources or we don't have the the ability to do that this year. We'll have to wait till next year. Our solution our our solution here starts with the idea that those people's opinions, their challenges, they matter, and we wanna start with them in mind. We wanna remove the friction. This is looking for friction. We wanna remove that immediately at the start of our of our process. So we actually map out who are the people, what do we need to think about when we take them on this journey with us. And then in some cases, you can see here let me try to find one. I actually have a communication plan written for how I'm gonna drive the communication with this person considering their issues. They they are concerned with risk, reliability, communication, etcetera. From here, guys, not only do we map out who matters, we we think to ourselves what matters to them, what are the requirements of the business. So things like assurance of supply, cost, quality, innovation. And then if I scroll further down, you can see here there's more options to select. But procurement, nine times out of 10, what would we say number one thing that we care about is? It's cost. Right? But the reality is the business if we surveyed the business, the people whom we serve, they actually would probably suggest a different order or a different suggestion of how we think go about these prioritization. So what we're doing, if I just zoom out, if I go back to these first two tiles, we're deciding who is important and then what do these folks actually want. Are we delivering the right value? And let me give you an example. Let's say that we have challenges with our quality team, and and we're we're gonna deliver all kinds of cost reduction. I prioritize cost as my number one, but we continue to have quality issues with our again, I'll I'll use this one, plastics. They're coming in, and they're not the right shape. Dimensionally, they're off. Customers are having issues. It's causing back end cost with warranty or whatever it might be. This is a problem, and we're delivering the wrong value to the company. So our strategy tool starts with the idea that we're gonna deliver the right value to the right people in the business. Okay? From here, we actually this first three tiles are all aimed about people, stakeholders. And then from here, we're aligning the value that we'll eventually get to. The next phase of the process is what I'll call the internal and external analysis. It's 11 tiles here, including spend analysis, CrowdGic. I'm not gonna read them all, but it's a market survey. These are all things that are commonly accepted in the academia world of category strategy. What Coupa has done is simply digitize this process, which is awesome. And then what's behind all this is a machine that's learning the category and searching for incremental value. So I'll show you two quickly just to show the point of how the AI learns. But the first one is this CrowdGic matrix. Everybody's familiar with the CrowdGic. It measures the impact on business success and then the overall market complexity. But a lot of times, what happens is there's such an influence from suppliers to be on this right hand side of the matrix because I'm special. I'm unique. My, you know, my products are special. We get influenced in procurement. We we and then our people potentially make things complicated. Our requirements are too complicated, and it limits our supply. Right? So our our behavior oftentimes pushes us to this right hand side. Then internally, stakeholders often push us upward because our stakeholders naturally care about what we're doing. They care about the sources. They care about the products. And so they make us feel like, well, everything we do is important. So here's the here's the squeeze. If we get this wrong, if we if we behave as if we're strategic but we're actually something else, you're missing out on value. You're missing out on value or, potentially, you're you're you're probably difficult to work with. Like, if, for example, if you're strategic, but you're you're or if sorry. If you're bottlenecked, you're behaving as if you're strategic, you're probably annoying your suppliers. And so we have to be careful. We have to think strategically about what position we're actually living in, and these are not descriptors of the person. It's environments that the category is living in. And so here's why this is this technology is cool. Right? Instead of simply asking the category manager to plot their position, we go through and we ask them to bite size, answer questions about buyer power or supplier power. And they go through, they answer some of these questions. What's the level of capability of the supplier? What's the spend in in relation to the total company spend? We go through, we answer these questions, and it sets the position. This is a non biased, non emotional, very sanitized way of getting an actual position on a project. Now this is super important because the rest of our category, the rest of our highway is going to be considering that environment. Right? If I go back in here, there's descriptors of leverage. You guys know this. But there's descriptors of, okay, buyer possesses the power. The relationship is strong. Our levers that we're gonna eventually look at are gonna consider this data. The machine is learning in the background. So, again, I'm not gonna go into all these details, but if I fast forward real quick, there's risk analysis, market analysis, sustainability, diversity, pro supplier profile in-depth. I'm gonna go to the end. Alright? This is the strategy recommendation. Our AI is searching for incremental opportunity to create value for your particular category. And there's eight key areas that we are searching on how to do that. It's not just cost. It's not just contracts. Not just payment terms. It's eight key areas. So what this graph is saying here is that if I optimize my process, if I improve or look at redistributing my spend or optimize my spend somehow, there's a 100% probability that I'll have some sort of incremental value. And remember, we're defining value as how we described it before, which could be assurance of supply or more secured supply, better quality parts. It could be cost as well. In in my case, this that was a third ranked one. Another way of saying the same thing. If I look at organization, if I optimize my organization or if I improve my supply chain, guess what? There is zero incremental opportunity that I can find for delivering value to the business, the value that they need. This tool also is not gonna recommend what you're already doing well. It's designed to find incremental value. So if I scroll down, this is my favorite part. We talk about AI. We talk about how the AI is learning your category, but we don't force you to select the high probabilities of success levers. So there's 77 levers in here that you can pull, and you'll see they all have percentages based upon success. Like, some of these are 6%. Some of them are all the way up at 65. What we coach when we do training and when we deploy this technology is this is an art. Before, it was a science. Now it's an art. You have to select levers that you think, know, feel, are going to drive the most value. So, for example, I need to improve my supplier's performance. That was one I selected here. It's a 100% match. But if I scroll down, you'll see here I have one as low as 14%. And the reason is we give these percentages and probabilities as a guidance, but they're not a hard and fast rule. What we want to do here is create the most actionable the most actionable strategy outcome that can be delivered for the organization. So I'm gonna hit continue. I'm gonna walk you guys through the rest of this process here. After I pick my levers, I'm gonna meet back with those people. Remember that remember that guy that stood up in a room or or a girl or who whoever and said, hey, Eric. I can't do the strategy because we don't have we don't have the resource. We don't have the funds. It's not in our AOP plan, and we can't do it. Well, those we want to sit down with those people, think about those people, and answer the questions. For each one of these levers, what's the risk of us doing this? What's the effort? Do we know how to do it, and is it a strategic fit to the company? Right? And so what happens is that our AI initially makes a recommendation, and I'm gonna scroll down to one like here. It's enlarging the spend commitment. It's high risk. It's a lot of effort. We don't know how to do it, and it's not strategic. Right? That's showing 48%. Check this out. After I meet with my stakeholders, I walk them through this. I'm gonna go to this next tab. If I scroll down, enlarge spend commitment, it changed percentages here. Because what happens is when we rationalize those previous levers, it actually can change to get us to the most actionable outcome. So here here's what I mean. This is what my AI initially recommended. It said, hey. We really need to look at our process. We should look at optimizing spend and introduce some competition. But I manage this category. I know plastics very well from, former roles in procurement. And I and this is, of course, a sanitized, strategy. But here's what I know. In order for me to do process, there's probably a lot of bigger topics than just Eric, than just me, just my category, things like our ability to forecast or things like our ability to, you know, talk about inventory. Those are things that involve operational teams, and they're outside of my control. And so, therefore, for me, that made it more difficult to actually realize value in process. So where I'm choosing to focus my energy and time and resources for my category strategy is increasing competition and then driving spend optimization with my suppliers. So what this is gonna do, ultimately, it's gonna be a high resourcing, high sourcing type of a an outcome of a strategy. And you can see here, these are my objectives. And all of these, by the way, were generated using AI. So if I hit, like, edit, I pull these over, pull these levers over, I hit edit with Navi. And Navi, of course, is our AI agent that creates these objectives for me. And then I hit save. Let me click do that. And these objectives are now actions that I can take to improve my performance in the actual category of that which I manage. But it doesn't stop there, guys. This is probably one of my favorite parts of the tool. Category strategies, the status quo, most of our our clients or most of the industry, actually people always ask me, who's your biggest competitor? Well, it's it's paper. It's documents. It's Excel. It's PowerPoint. Right? What we're doing here is we're we're doing something that Excel and PowerPoint can never do. We're actioning out. We're translating the strategy into action. So here's what I mean. Each one of these objectives that the that Navi created for me is now being managed in an actual Gantt chart. I'm now saying, in order for me to do and achieve this objective, I have four tangible steps, four milestones that I need to take to get this objective to completion. And now I can show how long it'll take. I can even show in here, guys. I can show the savings, whether there's cost reduction or, in this case, increase because I think this one's a dual source situation. I can even show I might have it on one of these. There is nonfinancial savings, c o two emissions. In procurement, guys, we do so much work to create value, but we typically track just cost. I had a client the other day, shared that by, switching a product, they were reducing workplace injuries. Like, how cool is that? That's value that procurement needs to get credit for because it's super important to the business. Right? And so we build our objectives. We build our initiatives. We have the steps to create and action out these strategies. Let me show you one more feature, and then we'll wrap up our time. So if I go to the home page of my strategy, I'm gonna hit the strategy tab up here. And now I wanna highlight something that's really nice as a as a user. I can't tell you how many times I've had to edit PowerPoints, PDFs, prereads for leadership or to share with certain people. We actually have in the tool the ability to customize what sections, what content you want to show. So if I just scroll down, this is not in presentation mode. But if I needed to click to share, what's my executive overview? What's my situation? How is it complicated? And then how do I plan to resolve it? I can quickly show key information about what's going on in my category. Why am I saying that certain things are a problem or challenges, cost drivers, leverage? All the content that I worked on is now easily presentable both in the tool. And I'm gonna keep scrolling. There's a lot of content in here. I now can export this to a PowerPoint. I can send this to a PDF. I can create custom PowerPoints. Or we have two AI options to help drive this. As a category manager, guys, this is so such a nice tool, such a nice feature because it's gonna save time. And no longer do we care about the formatting in the right hand corner that it's not the right size or the right font. Right? This is this is so important as a category manager to have this. And, again, you can toggle on and off different things that you're showing based upon who you're meeting with. I wanna stop there. There's so much more. I I really wanna encourage you guys to ask if this is of interest to you, please reach out for a demo or for a a more in-depth analysis of what this is, how it can impact you. I went really fast today, but I wanted to show you the power of the inputs, the strategy, and then how that can fundamentally, like, change how you go to market, change how you do procurement, and align the value that your stakeholders wanna see to the output of the strategy. But I again, I wanna encourage you to reach out, for questions if you have them. So with that, maybe I'll stop sharing. And, Nari, I can turn it over to you. Thank you so much, Eric. That was a great demo and great discussion about taking plastics as an example, but the solution is generic and can be applied to all types of categories, whether it's indirect, whether it's commodities, whether it's products which have bills of materials, complex manufacture items, and so on and so forth. So and one of the the thread which was very obvious, well, you described it, Eric, was the people aspect. The fact that the first three boxes really were about people, stakeholders, their goals, their incentives. And that's really what we are talking about as part of the maturity framework is it's really the combination of people, process, and technology. It's always been the case, and it'll continue to be, especially in the world of supply chain and procurement where we are dealing with so many different stakeholders. So I want to request Jeff Gilkerson to chime in a bit about the interplay between people, process, and technology. Yeah. Thanks, Nari Viswanathan. I think, you know, hopefully, having seen that tool, I I I we love the tool, by the way. Think it's super helpful for organizations that are trying to to move up the maturity curve. But I think you can also see that if you if you said and and with our clients, unfortunately, that that have done this where they say, okay. Yeah. This tool is great. Gonna implement it and put it in place. But it still requires a person to be that strategist to think about it. Right? So what it really does besides walking you through the process is it accelerates all of the, I'll say, the analysis and that initial strategic thinking, but it doesn't give you the final answer, right, as Eric Bjorndal kind of alluded to at the end. But it allows you to, you know, free up your time to then go have those conversations, have those difficult, strategic, thoughtful, insightful conversations with your stakeholders. It frees up your time to actually think about, right, like, what is my power in this market? What is the supplier's how can we improve it, right, looking at all those different levers and really evaluate them. And so as you think about I think it's really a change management effort both within the business. Right? So how do we engage with the business differently? But there's also a a change management and a change element within most direct procurement organizations to say, you need to move into being you know, you're not just buying. Yes. There's a buying element. We have to do that, but we can automate a lot of that. And so now we need more, you know, strategists, right, who can look at a category, look at a market, work with stakeholders to develop that. There's you know, you can see what I alluded to earlier. Right? Like, working with engineering a lot earlier in the process to design specs. You can have different levers. You can apply different levers. You can have different percentages based on what you're doing. And you still need to think about the process. This isn't something that's gonna happen. Even with technology, it can automate a lot of it, but it it's not something that's gonna get automated, and that you're gonna develop a strategy and execute it in two days. It it's still going to take time. You still need to go through all those different steps. It just allows I I think it provides a great structure and and allows you to do it in a in a more meaningful way as you go through it. So Excellent. Yeah. That's a that that's a that's a great summary of the section where we talk about the people process and technology. And one of the key aspects of technology is AI. It's our opinion that AI really amplifies the maturity. It does not replace discipline. You got to really have a strong foundation in terms of people and process for companies to be able to leverage AI. And we have also tackled a lot of the AI capabilities within this particular maturity model. For each stage of maturity, we have identified the types of AI capabilities which are very relevant. So, for example, if companies are in stage two, that's a that's an area where for companies to automate their intelligence. So looking at AI forward spend classification, automated purchase order to invoice matching, AI guided request for proposals and contract life cycle management. Those are very relevant to companies in this stage. Companies who are in stage three for for companies who are in stage two and who want to go to stage three, the first recommendation that we have is start off your journey with AI powered category strategy, which is really what, you know, Eric was talking about having a supply chain digital twin to be able to run scenarios of your supply chain and identify where disruptions are happening. As we know, supply chain disruptions are happening all the time even with recent times where, you know, ships are unable to cross and go to their destinations. The the ability to model different sourcing scenarios through sourcing optimization, those are all great features to have or capabilities to have for companies who are in the stage three time frame. For companies who want to really move from the augmentation of their intelligence and really have autonomous capabilities, we do have a whole variety of agentic capabilities which are coming in. So having the idea of an agent which can automate a particular task and operate on its own to execute that particular task is what we mean by agent driven design to pay capabilities. So in this particular companies who are trying to reach this stage, having the ability to, you know, optimize on various areas, come up with opportunities for improving their sourcing, having a consultant, like a digital consultant made available to them to execute some of their scenarios. Those are those are the things that we talk about as autonomous intelligence. So in summary, really look at for your particular process area, how mature are you? And based on that, look at for the AI capabilities, which are very relevant for you from your company standpoint. So let's do a quick poll and look at where do you stand or where do you believe you are in your AI readiness for Direct Spend. So the various topics that we have here are, you know, what best describes your AI readiness in Direct Spend. You know, no AI, fully manual process. Isolated use cases where you have pockets of automation. You have AI assisting decisions, which is augmented intelligence. And then the fourth is in terms of executing AI executing within some guardrails, which is the autonomous intelligence, which is basically the agentic AI. K. So we are seeing some of the results coming in. We'll give a few seconds for getting a critical mass. The results so far are not surprising at all. Most companies are either not having any AI capabilities or having isolated use cases with pockets of automation, which is very consistent with what we see with our customers as well. Yeah. It's consistent with what we saw on the other polls as well, Nari. Yep. K. I think we we have a good critical mass. I can we can move on. So we are ready for a kind of a a quick summary before we go into a q and q and a section. We have a few questions lined up that we will go through. But as a as a takeaway or, you know, summary of what we saw today is direct spend maturity is not optional. Companies are able to gain significant ROI as we saw within the results that Jeff shared from The Hackett Group, where companies who target direct procurement can achieve up to 2.6 r o 2.6 times ROI. And companies are really looking to have direct procurement become a strategic function and not just a call center. Of the examples with, Eric shared in terms of some of the second order effect of creating, procurement as a strategic function. Like, for example, the carbon emissions, the, reducing workplace injuries, those are very critical. The the second key takeaway is category strategy is really critical for companies, and it's like the structural background structural backbone for companies to reach higher levels of maturity. You got to have the process discipline, the ability to bring stakeholders in, and have a way to track progress from strategy to execution. And then the third aspect we want to say is AI native execution is a key accelerator and really look at AI from the point of view of where you are in your maturity model and for each dimension where you stand and apply the right AI capabilities for the right problem. That's very important. You got you got to think of AI as very points point or very specific capabilities, and it's not like a one size fit all. So those are some of the key takeaways from my side. You know, Jeff and Eric, do you have any closing remarks before we go into q and a? I think we had a couple of questions. So let's say we only have 15. So, no, I don't know. It's a good summary. Probably Okay. good to move to the q and a. yes. Okay. So one of the questions that we are getting is, like, in terms of the interface itself, it's a guided interface, but you still need to input some data. So and I think, Eric Eric, Yeah. you have answered that. online. If I could if I could add to that answer. So I well, I didn't have time to cut or to cover it in the the demo, and that's why I said, guys, please reach out. Ask to set up more in-depth because I did fifteen minutes and normally what we do in an hour. So hang with me. But the the AI not only is machine learning your category and looking for incremental opportunity, it's actually also prioritizing the questions you get asked. So if I would've gone back and showed my screen, it would've we have a a recommended set of questions that we want you to answer, and then there's a full list. And what we what we do is we actually we look. We know that your teams are busy. We know that this has to be a sharper, faster process than than PowerPoints. Right? So we prioritize the questions that get asked based upon, again, the AI. So for example, if, let's just say innovation is not important to my plastics category, I may get less questions on the topic of innovation because it's not it's not a a requirement of my business. Now it's not gonna avoid asking questions like that, but it it's gonna ask maybe less questions. The other thing that I I ought to point out, we do have integrations with third party market intelligence providers. That makes a massive, massive difference. So if you can get on board with those, and, of course, we can explain more in a deeper demo, That's I I ballparked it around 40%. It it could be more, but it just depends. What what is not covered by market intelligence providers is anything that is specific and unique to your organization. Got it. Good question, though. Yeah. I think, Eric, I'd also just add that it it it's a little bit more work the first time. But as. you as you think about and we always talk about category strategy and category management. It it's not an ad hoc onetime event that you do, and then you kinda set it aside and forget about for three years. Right? Yeah. Something It's that really becomes a day in the life of. If you're if you're if you're moving up to level three into level four, you're you're constantly have market scans looking for data, updating. things, right, identifying when there's new opportunities that that may come up even if it's not part of the strategy because stuff happens, especially, it seems like lately, in the world that that, you know, might impact our strategy. And so Yeah. you have a starting point after the first time you've done it. And so, yes, it's little bit more work the first time. It's not a 100% to Eric's point, but it's, you know but maybe maybe 50%. But the second time you do it, it might be 5% or 10%. It. it's more of a how do we you're providing the the AI and the tool we're providing. Here's what we see as different. You're providing. Here's what's different. And then it which is how you can make it a day in the life of Right? It. it's continually updated. Exactly. Exactly. And and maybe I'll add one last thought to that. Some of the deployments that we do, we can have strategies built in twelve, sixteen hours. Guys, I've managed categories for ten years, and then I led categories. The shortest one that I saw or led was about three to six months. In that range was typically normal time. If we if we're on-site and we can get and we can deploy this in person, we're talking twelve to sixteen hours where it's roughly 80% complete. So from a from a anytime we digitize something like this, we're gonna make it easier, faster, sharper for you guys because we know that we can't go backwards. There is no going backwards, especially when using AI. Like, it is this is so much more efficient is maybe where I'll I'll leave you guys with. Good. question, though. Yep. Yeah. Yep. That's a good point, Eric. It's you know, category strategies often got left beside because it was harder, more was always something else that you had to do. And I think what we see as world class organizations, one, they have some. There's some dedicated resources to it that that is their job is to to focus on it, but they're also leveraging this technology to make it easier so that you can cover more of. of the spend. And and it's becoming even, you know, I I'd say more more critical and more important as the world becomes more volatile. Right? Supply chains were relatively stable for a long time. Over the last three to five years, they've been less stable. There's been more dynamic in it, and organizations are moving, sourcing of where they're buying you know, products are coming from, where they're shipping from, how they're shipping them, how they're managing how they're evaluating those trade offs. And so having that framework should be able to say, alright. How do I wanna think about these trade offs, which may be different than what I've always thought about them for, is. even more important and and critical for for being successful. Makes makes a lot of sense. Before we go into a couple more q and a's, want to make sure that we get with the last poll from our audience. We really want to engage with you further. You know, after the learnings of today's session, what next step would you like to take? You know, we have a a live demo that's that's available for you to join. Please do share the recording with the team members. We can provide you the link, and we'll be happy to, have a one on one demo with you. And we would also like to know if you don't think that direct spend is a priority right now. So like to get some of the inputs from the group before we go into the next question. Alright. So maybe we'll give a few more seconds, and then we can k. Alright. Great. Thank you. Thank you so much. So the the next question that we that we saw, Jeff and Eric, was how can category strata strategy data be used to demonstrate strategic impact beyond just cost savings? Yeah. Maybe maybe I'll start on that one. So, again, I told you guys the story. I had a client switch materials. And by doing so, they they not only save money, but they reduce workplace injuries. And so I I tend to get on a soapbox about this type of stuff because that's like the the money is typically what we care about. Right? But for that person that gets to go home that night because they like, they're not in a hospital or they're not, you know, injured because of some sort of a material issue, and I don't I don't necessarily wanna disclose what it is. But it's like, that's that's so cool. Right? Like, procurement is making an impact in this world, and we we tend to just show cost because that's what our our key value is. But, man, it's it's it was such a powerful it was humbling for me to hear that story. I also have another client where they get budgeted amounts from health organizations. And so the more cost reduction they can get, it actually is not necessarily cost reduction. It's actually furthering their medical care for low cost country health care situations or global health issues. So the more stewardship they have over their procurement, the more people they reach to solve health health issues, like global health issues, and specifically in Africa and India. So, man, guys, I I I get so passionate about the the world of procurement. We gotta switch from cost reduction, cost savings, cost avoidant. We gotta start seeing value because there's there is so much more value beyond just cost. That's my rant. Yeah. I think that's right, Eric's. You know? And I think, you know, it's really if you think about it from the CFO perspective, right, it's how do you connect the value and and what procurement's doing to commercial decisions and and targets. Right? So the the one I typically think about, right, there's there's cost, and I think it's really material cost impact on product margins. Right? CFOs think about margins. So it's not just, well, what's procurement savings, but what does that how does that translate to margin, whether it be at a SKU level or a a product or kind of platform level. But then I think there's also really what I'll call revenue enablement. Right? How can we and so that sense, like, time to market improvement. So how can we drive faster sourcing, qualification, supplier onboarding? Because we have a new idea that we wanna get out to market. We wanna be the first in, you know, engineering. We've worked with them upfront, and so now we have kind of a stable of suppliers that we can go to, and we can very quickly make a decision and get supply up and running in in our production to get out to the market. Right? So we can get we can get revenue faster. I think there's a a supply continuity metric. So thinking about what's the revenue we've protected, you know, because we had whether it'd be dual sourcing or we had contingencies or we had worked with our suppliers to have a plan if, something was to go amiss. And so how can we how can we quantify that, right, to say, here's what here's what we enable from an uptime from a production standpoint because we we had a good strategy. We had a good plan. And then I think there's looking to the supply base to say how can they help us evolve and enable, whether it be new product ideas, you know, new specifications, etcetera. But, you know, thinking about the supplier led innovation or or supplier collaborated innovation from a revenue standpoint. Yep. Well, I I think those those are all perfect. In fact, the the last question that I was going to ask from the audience was what metrics would make your CFO see procurement as a growth engine? I think you've already answered that. question. So That's a good a good summary. Yeah. I I think we, pretty much have come to the conclusion of the questions and want to let the team know one final point before we conclude today is we we have a very exciting, Coupa, on May, yeah, at the Aria Resort, Las Vegas. We have several dedicated sessions for direct material procurement, sourcing, and supply chain. And we are continuing to evolve and bring more and more customers who are willing to talk about what they are doing, in this particular area. So, you know, if you if you have any of our customers listening to us, please do register, and we look forward to seeing you there. And also the final poll, is still live. So if you would like to hear from us, and we'll be very happy to provide you a one on one demo or any other information that you would like. So with this, I want to thank the audience and also thank our expert panel, Jeff and Eric, for talking us through this very important topic. Thank you so much.