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Coupa Success Portal

Item Master Considerations

Item Master

Availability of items and catalogs is one of the core pillars to drive user experience and spend management success in Coupa.   Spend on catalog allows for users to shop against preferred supplier contracts in turn driving significant spend savings for the company.   Keeping an item master up to date is at the top list of priorities to ensure that spend is happening at preferred prices and eliminate any issues down the road with supplier's ability to fulfill requested purchases.  There are implementation considerations to maintaining accurate item master that are covered below.

External Item Master

External master is appropriate when there are multiple systems and processes that depend on that item data in addition to Coupa.   Some of the common use cases that fall into this category are:

Inventory managed in non-Coupa system: 

Item master resides in an external system and drives information such as unique inventory item number, UOM, warehouse location, accounting, etc. needed to manage item on hand balances and transactions in inventory system.   Coupa should not be the source of data that is leveraged for key transaction activity in an external system.  Nor should it store the data that is only relevant to activities in outside system.

Direct Materials (MRO, Raw Materials):

Items must be available in external system for individuals who do work planning.  These items could have special attributes related to the nature of direct material spending that planners need to be able to view in order to plan out the work that will eventually make it into a purchase order to request these items from supplier. 

Multiple ERPs or external systems leveraging item data:

In these cases, customers look to consolidate their item master data so that it does not have to be managed in disparate fashion in each one of their external systems.   MDM (master data management) solutions in addition to master ERP are typically looked as viable tools to store the item master.  Coupa cannot be looked as as the source as it is not designed to feed item information into different systems with their own unique item numbers and attributes.

Catalog Maintenance in Coupa

While an external system would be the source of master data for items, Coupa is the recommended system to update those items with pricing, supplier and contract details via Sourcing and CLMS/CLMA modules.   Header item details can be integrated into Coupa to create a "shell" record that can then be leveraged to source and update with appropriate purchasing level supplier details.

In below example, Header Item details such as Name, UOM, Item Number, Accounting would be imported from external item master.  Supplier Item details (Price, Supplier, Contract, Savings) would then be managed directly in Coupa for this item.

 

Header Item

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Supplier Item

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Below example touches on a standard MRO flow where a Work Order is initiated in ERP and sent into Coupa for purchasing.

1. ERP hosted inventory items could be added to Work Order

2. Work Order sent into Coupa as Requisition with ERP item master details.

3. Requisition can go into Sourcing/RFQ event to determine preferred Supplier and item pricing to be added to Requisition.

4.  Item data in Coupa now has price and contract details associated to facilitate future spending against same item.

5.  Any outbound integrations such as purchase orders or invoices will contain external item master ID reference to tie transaction to proper master item when it gets exported into host ERP or external system for proper accounting and downstream processes

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Coupa as Item Master

Coupa can be considered as item master when all of the item related activities are done directly in the platform and there are no dependencies on any external systems to process transactions. ie. Indirect spend such as Marketing materials.  In such case, items would be sourced and contracted in Coupa.   Items would be added to Coupa hosted catalog.  End users start their purchasing directly in Coupa and all of the follow up transaction flow is solely facilitated within Coupa as well.   Another use case is for item master leveraged by Coupa Inventory module.  Again, since all of the item data is pertinent to Coupa end to end inventory processes without dependency on external system, Coupa becomes the item master that feeds the inventory data.

 

In short, as item master becomes a consideration in your implementation, the master data host depends on processes and systems involved to facilitate them.  If end to end process is managed in Coupa only, then Coupa can be considered as the item master.  However,  if there are any external systems that depend on the item data and play a part in overall spend process, then the item master should be hosted in those systems or MDM solution with Coupa as the recipient and facilitator of purchasing specific details such as supplier, price and contract info.

 

 

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