In August, SourceDay announced an exciting integration partnership with Coupa, the leading provider of procurement software. This integration allows manufacturing companies, or any company with complex direct spend requirements, to manage both their direct and indirect spend in one place.
Here’s why we’re so excited about the partnership—and what our customers can expect.
A Complete View of Business Spend
Manufacturing companies on the leading edge of their industries look for a few things when evaluating new technology. First, they look to make sure that the technology solves a real problem in their organization. (They’re not going to dip into their margins if it’s not absolutely necessary.)
Second, they look to make sure it connects to as many of their existing systems as possible.
The more integrated their information, the better equipped a business is to harness their data—and actually use it. The driving force behind SourceDay’s partnership with Coupa was a desire among manufacturing companies to see their total spend in one place, for their indirect and direct spend systems to talk.
Direct vs. Indirect Spend
Before we go any farther, let’s get some definitions out of the way to make sure we all speak the same language.
- Direct Spend: This is money spent on materials that will eventually be sold to customers. Without these materials, there’d be no revenue. On a company’s income statement, direct spend is called cost of goods sold (COGS).
- Indirect Spend: This is money spent on items or services to keep your business running. Think desks, phones, headsets, and office snacks. They have no direct impact on revenue. On the income statement, these expenses are generally classified as operating expenses.
- Procurement: This is a catch-all term for all purchases of supplies or materials, whether indirect or direct. It’s used more often to talk about the indirect side of spending, though.
What’s So Different About Direct Spend?
If direct and indirect spend fall under the umbrella of procurement, why not find one solution that can do both and call it a day?
Unfortunately, it’s not that simple for many manufacturers because their direct and indirect spend follow very different processes. Anyone who manufactures a complex product will tell you that every day is a dance of sorts, balancing emails from customers saying they need more of a product with calls from suppliers saying they might miss their ship date.
Their supply chain relies on a series of delicate dependencies. In fact, we’ve found that an average of 40% of purchase order line items will change over a given PO’s lifecycle. This direct spend complexity is what SourceDay set out to simplify.
Indirect spending has its complexities too, but a procurement manager of indirect spend does not, by definition, deal with the same levels of complexity. And that’s simply because they’re usually sourcing fully-made products. The challenge of indirect spend lies in employee compliance and corporate governance, and in this world, Coupa leads the way.
So, for manufacturers the combination of direct and indirect spend requires a different approach.
Coupa + SourceDay
The partnership between Coupa and SourceDay combines the capabilities of two market leaders to address total spend management for manufacturers, without asking them to make sacrifices or tradeoffs.
Shared customers of Coupa and SourceDay can now embrace the promise of comprehensive business spend management while also addressing the supply chain challenges that are unique to their business.
Here’s how we address those challenges specific to the supply chain:
- We integrate with your demand planning and MRP capabilities, no matter which ERP you use.
- We’ve created a user experience that’s great for buyers and suppliers across POs, shipments, and quality management.
- We guarantee supplier adoption and provide dedicated support going forward to help your team achieve results.
Put simply, we make switching easy and enticing to both buyers and suppliers. Learn more about this exclusive partnership today.