Scale for Growth: Data as the Cornerstone of Finance Transformation

When a company grows through a merger or acquisition, the finance team can be faced with various legacy systems and conflicting procedures. Kim Estes, Vice President, Accounting, The Knot Worldwide, spoke during a recent TMI and Coupa webinar about how her organisation overcame these challenges and found the perfect marriage of technological transformation and streamlined processes.

The Knot Worldwide is a global leader and authority in the digital wedding planning industry. The company provides wedding marketplaces, including relevant content, planning tools, and registry services to more than 20 million unique monthly visitors across 16 countries.

“Our mission is to help couples around the world plan a wedding that is uniquely theirs in every aspect,” explains Kim Estes. “The accounting and finance team helps to support this through our key corporate goals – to maintain a first-class accounting function to support management decision-making, to streamline processes and ensure we have adequate controls in place, and be great business partners within the organisation to create enterprise value.”

The role of the accounting and finance team has been pivotal in supporting the rapid growth of what The Knot Worldwide is today. Back in 2018, legacy company WeddingWire recapitalised with a $350m investment from Permira Funds. It then merged with XO Group, the holding company for The Knot and many other smaller brands. XO Group was a public company and significantly bigger than WeddingWire. The combined executive and management team was a mix from both legacy companies, and The Knot Worldwide was born in the spring of 2019.

“We had to rationalise systems and combine our processes, since invoices were coming in on different systems, and we had completely different approval processes and AP frameworks between the organisations,” Estes recalls. “The legacy systems became obsolete pretty quickly, and we had to process thousands of invoices manually. While we were actually on the same system as our legacy AP partner, we were on different versions of their system and had completely different frameworks. We were going to have to reimplement, regardless.”

Finding the right technical system to support growth

As the new company took form, Estes and her team began a request for quotation (RFQ) process to try to identify the best system for the newly consolidated entity. Key to this was the desire for one end-to-end seamless solution, rather than having multiple connected but separate systems. Other essential requirements included a system that could handle payments, vendor onboarding, the purchase order process, travel and entertainment (T&E), and AP processing. The system also needed to have international capabilities.

“We operate in 16 countries and have subsidiaries all over the world. We wanted to be able to onboard vendors into this single system, so having that visibility and ability to streamline processes was critical,” Estes explains. “We also needed a system that would meet the statutory requirements of those countries. Having the integration into our other systems, such as our ERP system, bank systems, and our HCM [human capital management] was also really important for us.”

The final element that The Knot Worldwide sought from the RFQ process was a true partnership. The company works hard to maintain excellent partnerships with all its vendors, but this was specifically required on the AP side after such an involved integration process.

“We wanted somebody that would be responsive, listen to feedback, and make changes based on that feedback to meet our needs, and be available when we needed them,” Estes continues. “We ultimately felt that Coupa solved the majority of those pain points and also gave us greater visibility and control.”

Implementation one: laying firm foundations

The Knot Worldwide’s implementation journey with Coupa is a tale of two halves, as the company implemented the solution twice. The original implementation immediately followed a significant transaction, as Estes explains.

"Updating our AP system required a heavy lift from our team and collaboration across several teams to ensure we implemented the appropriate codes and updated the correct approvers to avoid error as much as possible. Once Coupa was up and running, we had a process that was working well and we could focus our efforts on other pressing integration tasks, " says Estes.

At this point, the company had implemented Coupa for invoicing and T&E, but neither the legacy WeddingWire nor The Knot team had a process for purchase orders (POs).

“Implementing POs wasn’t a possibility immediately because there wasn’t a desire for it at that point,” Estes continues. “It was a whole other discussion point among our senior leadership team to get buy-in for that. But after the initial implementation, we did go back and implement Coupa Pay and Coupa SIM [Supplier Information Management] to streamline our AP back-end process further.”

Implementation two: maximising the functionality

Fast forward a couple of years from the first implementation to 2020. As well as dealing with all the challenges created by Covid-19, The Knot Worldwide also managed to revise its contracting approval process completely. In turn, this led to a lot more conversations around implementing a PO process.

“In 2020 we hired a full enterprise team, including a financial systems team, that was dedicated to supporting our financial systems,” Estes notes. “That team helped us become a lot more thoughtful about how we could maximise Coupa for this effort. We ultimately decided that we should reimplement Coupa, since implementing a PO process had a downstream ripple effect on the decisions that we had made in our original implementation regarding the framework and the approval process. This time, we conducted a comprehensive implementation of essentially all Coupa functionality, including the PO process, and we redesigned our approval matrix and our entire front-end contracting process.”

As a result of this additional work and secondary implementation, this process now starts with submission of the contract to the contract distribution list, which includes functions such as legal, accounting, FP&A, and the requirement for the CFO to obtain approval for the spend. In conjunction with that, the vendor can be onboarded into Coupa and then the PO can be submitted.

“We also have all the automatic approvals within Coupa, so our FP&A team goes into the system for that, as well as anybody else who needs visibility and approval of that contract,” Estes says. “We have controls within the system that document that approval flow as well.”

The other operational process added within the second implementation was a concept of an AP business partner. This provided each department with a dedicated contact person, with whom they could work directly for urgent items, and answer general questions around contracts, invoicing, and purchase orders, for example. Stakeholders would still email the regular AP distro, but they are now directly contacted back by the same person who knows their vendors and their teams. This went a long way with the senior leadership team to establish relationships across the organisation.

Backing from the business

Obtaining buy-in from the business and senior management on the second implementation was also helped by the practical business situation caused by the pandemic, which forced a greater focus on monitoring spend. The Knot Worldwide accounting and finance team were able to place a number of efficient processes around contracting and budgeting in 2020 that, in normal times, might have been more difficult to encourage.

“We had Covid as an excuse to say, ‘Hey, we have to do this now,’” recalls Estes. “Those behaviours were already in place, it just was really manual. Therefore, getting stakeholder buy-in to automate that process was fairly easy from our side, and we had additional trainings to go into what that would be like in a system format.”

Any stakeholder significantly impacted by the changes caused by the second implementation was included in the core procure-to-pay (P2P) stakeholder team. As Estes explains, they were involved in the decision-making to go into the appeal process within Coupa, and sat in the conference room pilots (CRPs) so that they could see everything. Additionally, any other personnel who were going to be active users of the system were required to be part of user acceptance testing (UAT).

“They really were ‘active users’, because we made them go into the sandbox and do specific tasks,” says Estes. “They would then sign off on those tasks, confirming the way they expected to go from the approval flow to the emails that they received from Coupa in order to approve things. This was important – both the UATs and the CRPs went a long way towards making senior leadership feel like they weren’t just stuck with a bunch of decisions made by the accounting team.”

Benefits and takeaways

The second implementation of Coupa at The Knot Worldwide, including the PO process, went live at the company’s U.S. domestic market in December 2021 and will be given an international launch later this year. Estes says that the most significant practical benefit of now having a single source of truth is just how streamlined it makes operations.

“We have one system where we can manage onboarding, invoice processing, payments, and we’ve gained so many efficiencies, not to mention the reporting capability side of it,” she says. “With SIM, we onboard about 50 new suppliers every month, and we’ve got the onboarding time down to about three business days. We’re now processing about 800 invoices a month within Coupa, of which we have about 400 payments going out monthly through the system. We have 99% of our payments now going out through the new system, of which 90% are on ACH [automated clearing house].”

For corporates thinking of going through a similar process, Estes advises it is key to identify pain points and know the expectations for the system planned for implementation.

“With our first implementation, we missed the mark on what Coupa Pay would deliver for us that we didn’t previously have, functionality-wise,” she notes. “When you embark on a project like this, you need to understand your pain points, but also make sure you know how the system can solve those pain points. Ensuring that you have that in the project’s initial scope is important, and it will save you a lot of work down the road if you are mindful of that and have the right people involved.”

With the second implementation rolling out and the enterprise team there to support the accounting team through the changes, The Knot Worldwide has successfully transformed its finance function to handle the requirements of what, until recently, were two different companies and provided a platform for further growth.

“Everyone feels really good going into this next launch because so many leaders across departments within the company were involved in it,” concludes Estes.