666+ S2P+ Solutions … But Key Problems Are Still Not Addressed!

You’ve seen the Mega Map and the 666 solution logos on it.

You’ve heard the doctor and THE REVELATOR say repeatedly that another massive purge is coming to our space over the next 18 to 24 months (which will be the greatest since 2009-2011 where hundreds of companies were acquired, merged, or went insolvent), and that it’s already starting (with a few notable insolvencies, at least as far as the doctor is concerned, already occurring).

You’ve heard us say that there isn’t room for this many companies because even if you account for market size and vertical, we still only need so many solutions of the following varieties:

  • Sourcing
  • Supplier Management
  • Spend Analysis
  • Contract Mangement
  • e-Procurement
  • Invoice to Pay (I2P) / Accounts Payable (AP)

And even when you consider the wide variety of needs across all possible size – vertical -region combination, two to three dozen solutions in any category is more than enough to handle all of the complexities when you take even the most varied companies into account, but we now have over a hundred options in some of these categories. Only the strong, sorry, the smart, will survive … and only if they have enough money to do so (and enough control to make smart decisions, i.e. if they are controlled by greedy investors who double and triple prices that force them out of their target market, they will be the next casualty).

But even with all these solutions, core needs are not met. The reason being: in today’s business environment that is seeing a return to protectionism, sanctions, and border closings; a continual rise in natural disasters (thanks to global warming that will once again reign unchecked under administrations coming into power in multiple “first world” countries); and a continual disruption in logistics (due to epidemics, pandemics, reduced capacity, Panamanian droughts, and Houthis in the Red Sea), solutions are needed that go beyond siloed Procurement.

Back in 2022, THE PROPHET first tried to get the message out there with his proclamation that alt-suites would rise. (They still haven’t, but we do need new types of cross-functional applications.) He also made five predictions. They varied in terms of usefulness and vision (in the doctor‘s view, two in particular are desperately needed, although one of these needs to be broader than defined; one is nothing more than just an enhanced dashboard across various S2P applications and needs to be rethought, and two aren’t quite right [but contain ideas that can be built on]).

But THE PROPHET was right in that we need to rethink Procurement Technology in some organizations, who needs to contribute to Procurement, and how Procurement Process fits into overall operational processes. The solutions that worked for the last 20 years aren’t always enough anymore, and it’s not just a question of “intake” (which is not new despite what the providers will have you believe, see our prior posts on the subject) or “orchestration” (which is just a fancy term for SaaS middleware).

Here are three solutions that are needed now more than ever:

1. Design for Supply (DFS)

THE PROPHET was right on the money here. Not only is 80% of the cost locked in during design, but so is 80% of the risk. You not only need cost control, but you need supply assurance. This means that R&D needs to work with Procurement during design to ensure the products can be sourced affordably at low risk, and that Procurement needs to work with Supply Chain / Logistics to make sure the products can be reliably sourced in a timely manner (and the organization won’t have to stock months and months of inventory). Product design and development organizations need integrated DFS solutions that span R&D, Procurement, and Supply Chain.

2. Supply Chain Sourcing (SCS)

In the world of Direct, when organizations need to source for BOMs (Bill of Materials), they need to do it Supply Chain Aware. Under pressure, Procurement will always search for the lowest cost — but what if that is from a supplier in an unstable region; that is not part of the current, optimized, supply network; that can’t offer timely and secure delivery? Sourcing needs to be supply chain aware. And Supply Chain needs to be aware of what Sourcing is looking at so they can do network planning if the current supply network is not sufficient.

In fact, it would be even better if the DFS and SCS solutions were hosted on the same underlying platform.

3. Risk 360

This was the second platform where THE PROPHET was almost right on the money as well with his Assess-to-Monitor alt-suite. Risk is everywhere, both inside and outside the organization, inside and outside your partners’ organizations, inside and outside your suppliers’ organization, and its everywhere your physical, financial, and digital supply chains touch. Supplier risk, supply chain risk, cybersecurity risk, personnel risk, etc. can’t all be separate solutions. They need to be one integrated platform that constantly monitors, assesses, and protects your organization.

There are, and will continue to be, a need for new solution types, in S2P+, but these would be a great start!

Dear Vendor: Your Top 10 ProcureTech resolutions for 2025: Part 1

We know that our last post said that we were done with our dumb, dead company walking, and smart company series, and officially we are, but if you’re going to make ProcureTech resolutions for 2025, then you should at least make good ones. So we’re going to give you ten great ones. The first five today. The next five next Monday.

#10 Cut the Cr@p

First of all, Procurement does NOT need to be reimagined! As per our post back in July, Procurement is not something to be reimagined as it is not something that should even be redefined at the core. The purpose of Procurement has not changed since the first known Purchasing Manual was published back 137 years ago. It’s the process of sourcing, acquiring, and paying for the goods and services the organization needs, and doing it in a manner that ensures that the products will meet the needs, at the best price, and show up at the right time — and that as many orders as possible are “perfect” (or, more precisely, problem free). No more, no less.

If you want to survive the coming consolidation that will see a massive amount of mergers, acquisitions, and outright failures, you need to sell. If you want to sell, you need to not only solve customer problems, but convince the customers you can solve theirs. And the best way to convince a customer you can, and will, solve their problem is to be completely honest and transparent about your solution, what it does, how it does it, and what it will deliver against the real needs they have. With no cr@p.

#9 Data Foundation

In Procurement, everything relies upon good data. Solutions require good data — platforms, the modules they contain, the algorithms that power them, and every other technical component. Moreover, the humans relying on those platforms require good data to make decisions — good data that is processed by analytics into good information that give the human professionals the insight they need to make the right decisions. (At the end of the day, it’s human intelligence [HI] and the best platforms support human intelligence with Augmented Intelligence.)

This requires doubling down on creating a good schema, collecting good data, verifying that data, and maintaining that data over time. It shouldn’t be just collect some data haphazardly, execute a function, push it to a table in the database, and forget it. Your solution has to be normalize and cleanse the data, validate the data, use the data as required, store it in a standard schema, and mark any data that can change to be reverified on a schedule.

Organizations need a data foundation. Make sure the data foundation you give your customers is enough.

#8 Risk Awareness

COVID (Pandemic). Special Military Operations. (Geo-Political Conflicts, Border Closures, and Sanctions.) Canal closures and more Logistics Challenges. (Panamanian droughts and Houthis in the Red Sea.) Tariff threats (that are soon to be reality). This is just the beginning. The soon to be total abandonment of climate regulations in the US (and possibly a few other “first world” countries) is going to accelerate global warming (if the number of bombs dropped in the Middle East over the past year hasn’t accelerated it already). This will result in more unpredictable natural disasters. The tariffs coming in the US are going to spark unpredictable trade wars. Monetary and oil shocks that will come from the BRICS allowing alternate currencies to be used, as well as pursuing their own, will lead to more risk and disruption. The ease in trade we saw for the first two decades of this century may never be seen again in our lifetimes. Risk is everywhere, and compounding daily.

Thus, you must ensure that your solution is as risk aware as it can be. Sourcing modules must collect risk information. Analysis modules need to collect and process risk metrics. SXM modules need to track all available qualitative and quantitative risk information about every supplier being used. Contract modules need to support, check for, and suggest risk clauses. Procurement modules need to bring up risk information before every order, and automatically block suppliers where the risk has become too great.

Risk is critical. That’s why Sourcing Innovation did a 9-part series on supply chain risk.

#7 Focus, Focus, Focus

Don’t try to be everything to everyone. Don’t even try to be anymore than you are. Procurement people are realizing that any company that claims this can’t deliver because you can’t be everything to everyone. Instead, focus on your core modules and strengths, define your ICP, double down on your value prop, and focus on being the best you can on those modules and strengths.

Doing so will increase your chances of customer success, and customer success generates potential customer interest. Plus, focus will allow you to optimize your sales, implementation, integration, and execution processes; get customers up faster; get them results faster; make them happy faster; and that will lead to renewals and, most likely, increased subscriptions at renewal time.

We’ve tried to hit upon this point throughout the years, most recently in our smart company series, but hopefully this is the year it will stick.

#6 Integrate, Integrate, Integrate

Since you can’t be everything to everyone, you need to focus. And since customers will usually need more extensive solutions than any vendor can offer, usually for specialized needs, the most successful vendors will integrate with complementary best-of-breed vendor solutions that will make it really, really easy for their customers to share the data they need between the applications they need.

The key is to support an end-to-end ecosystem for Source-to-Pay+ by integrating with all of the solutions necessary for your customers to support end-to-end Source-to-Pay+ solutions. Successful companies make their customers successful, no matter what. They work with partners and complementary providers as needed.

Organizations need platforms, not just point solutions. Especially since you need to be risk aware.

Dumb and Dead Company: The Series

For your convenience, here are links to the complete series, classic and modern:

2008 Series

Dumb Company

How Dumb is Your Company
Dumb Company
Dumb Company (The Lyrics)
Dumb Moments in Business not Aerospace, Automotive, or Bailout Related
Why Some Companies are Being Dumb

Dead Company

Dead Company
Dead Company II: If You’re Hoarding Cash …
Dead Company III: Fear is the Enemy
Dead Company IV: Avoiding the GraveYard
Dead Company V: More Ways to Avoid the GraveYard
Dead Company VI: New SI Offerings
Dead Company VII: Even More Ways to Avoid the GraveYard

Your Marketing Really, Really Sucks

Marketing is NOT Optional
How to Build a Bat House
The Brain Gives Pinky a Marketing Lesson
Web Marketer, Don’t Be Misled!

The Market Dilemma

The Market Dilemma I: The Key to Getting Out of this Recession
The Market Dilemma II: Vendors Provide the Vision
The Market Dilemma III: Consultants Provide the Clarity
The Market Dilemma IV: Buyers Win the Battles

the doctor Can Help!

Vendor Void? the doctor Can Help!
Consulting Confusion? the doctor Can Help!
Buyer Bereft? the doctor Can Help

2024 Series

Prelude

Distant Early Warning: An “Avoiding the Graveyard” Prelude

Dumb Company

How Dumb Is Your Company?
You Admit You Might Be a Dumb Company. How do you avoid the fork in the road that leads to the Graveyard? Part 1
You Admit You Might Be a Dumb Company. How do you avoid the fork in the road that leads to the Graveyard? Part 2

Dead Company

Is Your Potential Vendor a Dead Company Walking? Part 1
Is Your Potential Vendor a Dead Company Walking? Part 2
So You Admit You Might Be A Dead Company Walking. How Do You Avoid The Graveyard? Part 1
So You Admit You Might Be A Dead Company Walking. How Do You Avoid The Graveyard? Part 2
So You Admit You Might Be A Dead Company Walking. How Do You Avoid The Graveyard? Part 3
So You Admit You Might Be A Dead Company Walking. How Do You Avoid The Graveyard? Part 4
So You Admit You Might Be A Dead Company Walking. How Do You Avoid The Graveyard? Part 5
So You Admit You Might Be A Dead Company Walking. How Do You Avoid The Graveyard? Part 6
So You Admit You Might Be A Dead Company Walking. How Do You Avoid The Graveyard? Part 7
So You Admit You Might Be A Dead Company Walking. How Do You Avoid The Graveyard? Part 8

Zombie Company

Zombie Companies Exist Too!

Smart Company

We Want To Be A Smart Company. What Else Can We Do Part 1
We Want To Be A Smart Company. What Else Can We Do Part 2
We Want To Be A Smart Company. Is That It? Part 1
We Want To Be A Smart Company. Is That It? Part 2

M&A Mania

Marketplace Madness
M&A Mania is Coming Again … but will it be the same as last time?

Software Success (or Lack thereof)

Don’t Fall for the Buzzwords!
Demystifying the Marketing Madness for you!
The Procurement Space is Filled with Hogwash! It’s Time We Start Calling It Out!
Want Procurement Technology Success? This is Your Anthem!
Why Do Successful Solution Providers Ruin Everything By Becoming Tech Companies?
Technology DOES NOT Solve Your Talent Problem!

There are Perks and Pitfalls of Friend-Shoring — But The Answer is Near-shoring!

On Tuesday, when we told you the tariff tax is coming and there’s nothing you can do about it, we told you the long-term solution is near-shoring, and while others will tell you that the short-term answer is friend-shoring, we want to make it clear that it is NOT.

As a result of recent logistics disruptions, geopolitics, and global disasters, and all of the supply disruptions that have resulted, a lot of global companies are starting to pull back on global outsourcing and extended supply chains, at least where they seem to have options.

Apparently a number of these organizations are considering Friendshoring, as per yet another article on the subject, with a recent example being the perks and pitfalls of friendshoring in EP&T.

According to this article this strategic shift is buzzing among industry leaders and policymakers. Why, I’m not sure.

The article has the following benefits right:

  • enhanced security and trust as partners tend to trust each other and keep each other safe
  • improved compliance and standards as friends generally work to serve the same markets and are more aware of the standards and regulatory requirements that need to be met for all to benefit

And has the following challenge mostly right:

  • increased costs as most “friends” are in first world countries with higher labour costs, higher utility and operating costs, stricter environmental regulations, etc. etc. etc. so costs are generally a bit higher up front (at first)

But here’s what the article overlooks:

  • better quality since these friends usually operate at higher standards with better tech which typically translates into
  • more reliability and longevity which generally translates into
  • reduced returns and warranty costs as customers will generally discard or move on from the product before it breaks
  • higher sales prices as customers will pay more for quality

And here’s what the article really overlooks.

It’s NOT friendshoring, it’s nearshoring!

Preferably somewhere you can get to on land, or from a nearby port. For North America, that means we should primarily be outsourcing from Central America (since we can get our stuff on trucks if ocean freighter availability is low) and, if we can’t get it there, from South America — since we can get it from a ship that sails up and down the coast (and doesn’t have to pass through a canal that has limited capacity due to drought or is unsafe due to terrorist presence). NOT from China, unless it is a raw material we can’t get elsewhere.

The nearer the source, and the less countries and distance the materials or products have to pass through, the less chance for disruption.

Moreover, it’s NOT the friends you have, it’s the friends you need, which may not be one in the same.

For example, a company in the UK might be your “friend”, but the UK is expensive, crossing the Atlantic is expensive and risky at certain times of the year, and you might be able to invest in a supplier in Mexico to get the same product! Moreover, if you invest in a company to help them grow, they are much more likely to stay your friend than a company who is only your friend because they think you are locked in to them.

Plus, if you choose, and invest in, up and coming / new suppliers, you can help them with their processes, new technology selections and plant upgrades, and even sub-tier supplier and material selection. This can be more helpful to you than an established supplier locked into their ways and last-generation technology and production lines they paid too much for.

Some of your “friends” will be the right “friends”, some won’t. Analyze them all and make sure they fit all of your requirements: near, quality, reliability, and potential for future value creation. (Not just future cost reduction after you help them get efficient, but potential sales price increase, value added services, and other factors that might increase the overall profit equation. After all, Procurement is about increasing business value, not just about securing supply and controlling costs.)

Stay close to home, and even home-shore when you can, and you will see fewer disruptions, which should be your goal as supply disruption has been the biggest risk for at least the last 15 years.

Failures Are Starting. How Much do the “Great And Reputable Technological Network Engagement Review” Firms Have to Do With it?

As SI recently posted on LinkedIn, corporate failures are already starting! Two notable companies in the UK with great solutions and decent customer bases have filed for insolvency in a little over a month. We think they will both be rescued (this time), but if good companies with good solutions (where current / former leaders made just a few of the critical mistakes I chronicled in my dumb and dead series — which every company’s leadership SHOULD read, but none actually do as no one will admit they aren’t perfect anymore) are at risk of going out of business, what does this say for startups who raised too much money, created too little in terms of solution value, and have no significant customer revenue to get them through tough times?

(As you may recall, even though you were blinded by the hype, we tried to give you a distant early warning that there are too many tech failures and you need to do something about it before you end up the next casualty.)

Having talked to almost a hundred small companies over the past year, that group has included dozens which are struggling financially and over a half a dozen that spent large six figure amounts (which might be a small amount compared to the seven figures an enterprise client will spend, but which consists of the entire Marketing and Analyst Relations budget for sometimes two years for these companies), and most of those have admitted they have yet to see, or saw, ZERO return.

Imagine spending 100K to 200K, when that is your entire marketing budget, on a promises of leads over a one to two year period only to see ZERO when all is said and done, and, even worse, to have no reprint rights to the work you paid for when the contract ended, no access to the database of “registrants”, and no unique insights that your sales team can use. (Or, engage one of the Great And Reputable Technological Network Engagement Review firms and you won’t have to imagine!) Now imagine being almost out of money, struggling to make payroll, and not having enough in annual recurring revenues to maintain minimal staffing levels. Unfortunately, this is becoming too common (and we know one of the companies that filed for insolvency made a significant investment in one of these Great And Reputable Technological Network Engagement Review firms and saw little return).

Th reality is that unless you are a reasonably large vendor, offering an enterprise suite, with high six to seven figures available to spend with these firms to achieve preferred customer status, and guarantee a position in one of their maps, there is little value from just sponsoring some research, getting a write-up, and hoping for some leads from the very limited reprint rights you get. It’s typically not a good investment for a small company, especially one that doesn’t have the budget to lose.

Now, at the end of the day it is the company that chose to sign the contract, and the company that made the mistake, but if they entered the contract under false promises, should not some blame rest with these Great And Reputable Technological Network Engagement Review firms?