Business model of Coupa Software

Customer Segments

Coupa Software has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at organizations of all industries and sizes.

Value Proposition

Coupa Software offers two primary value propositions: performance and brand/status.

The company demonstrates strong performance through tangible results. Its clients go live within four months on average (two months for smaller customers and six months for larger ones). Specific positive outcomes for clients include the following:

• Service Corporation International used Coupa Software’s solutions to send 98% of P.O.s electronically to 160,000 suppliers and save its locations 30+ hours a week
• Molina Healthcare used Coupa Software’s solutions to increase invoices processed per team member by 360% while only having to increase staffing by 10%
• AAA Northern California used Coupa Software’s solutions to reduce the number of rule exceptions for its approval process from 300 to 25
• Avalon Health Care used Coupa Software’s solutions to save approximately 75% of the time it would normally spend on implementation and upgrades and also reduce expenses
• Alta Devices used Coupa Software’s solutions to increase hiring volume while simultaneously reducing training costs

The company has established a strong brand due to its success. Its platform connects over 500 clients in more than 40 countries with millions of suppliers worldwide. These customers have used the platform to bring billions of dollars in cumulative spend under management. Specific clients include Coca-Cola, Adidas, Sears, TD Bank, and BNP Paribas. Lastly, it has won many honors, including:

• Recognition as one of Deloitte’s 2016 Technology Fast 500
• Recognition as a “Leader” in Gartner’s 2016 Magic Quadrant for Procure-to-Pay Suites
• Recognition as one of the 20 Most Promising Oil & Gas Technology Solution Providers by CIO Review
• The PayStream Summit Excellence Award for Innovation in Travel & Expense Management
• The 2015 Red Herring Top 100 North America Award

Channels

Coupa Software’s main channel is its direct sales team. It also sells its products through reseller partners. The company promotes its offerings through its websites, social media pages, webinars, and participation in industry events such as summits, forums, and conferences. It also hosts an annual conference called “Inspire” in May.

Customer Relationships

Coupa Software’s customer relationship is primarily of a personal assistance nature. The company assists customers in the following ways:

• Support Services – The company offers general phone, e-mail, and online support from support centers worldwide. Clients can obtain a premium support package offering 24x7 customer service. Coupa Software also assigns clients a Customer Success Manager who monitors their success metrics and project status and a Technical Account Manager to review workflows and configurations.
• Training Services - The company offers a variety of learning options, including self-paced online courses on its Customer Learning Portal, in-person trainings, and certification programs.
• Professional Services – The company has a team of experts that provides implementation support, technical services, and supplier enablement services.

Despite this orientation there is a self-service component. The company’s website features a “Resources” section that includes useful tools such as position papers, reports, data sheets, infographics, webinars, and videos. There is also a community element in the form of a forum.

Key Activities

Coupa Software’s business model entails designing and developing its products for customers.

Key Partners

Coupa Software maintains a program called Partner Connect with the following partner types:

• Implementation Partners – Firms that provide implementation services for its clients
• Referral Partners – Firms that promote its solutions in exchange for a referral fee
• Reseller Partners – Firms that sell its solutions in order to expand its reach
• Technology Partners – Firms that sell products and services that power and extend its applications

Specific partners include Accenture, KPMG, PricewaterhouseCoopers, and The Hackett Group. The company maintains the Coupalink Certified Partner Program, through which partners can standardize their Coupa integrations and receive formal certification upon a successful review.

Key Resources

Coupa Software’s main resources are its human resources, who include the technology employees that design and develop its solutions, the sales employees who sell them, the training/consulting employees that provide instruction/advisory services, and the customer service employees that provide support.

It has relied heavily on funding from outside parties, raising $169 million from investors as of June 2015.

Cost Structure

Coupa Software has a value-driven cost structure, aiming to provide a premium proposition through significant personal service and frequent service enhancements. Its biggest cost driver is likely cost of services, a variable expense.

Other major drivers are in the areas of sales/marketing and customer support/operations, both fixed costs.

Revenue Streams

Coupa Software has two revenue streams: revenues it generates from the sale of its solutions and revenues it generates from the sale of related services to customers.