Monthly Archives: January 2024

The Prophet‘s 2024 Procurement Prediction Number 5

The Suites, ERP and Big Tech Strike Back A

When everyone writes you off in favour of the new, new thing, there is one thing to do to prove the young turks wrong: thrive.

Never write off the Turks! A lot of people are these days, but remember they are one of the oldest known civilizations on the planet, with continuous settlement dating back to circa 7,500 BCE (at Çatalhöyük). But I digress. (Even though I should note one of the next powerhouse S2P suites is likely to come out of Istanbul … see the recent archives for more information on a rich caffeinated Turkish Punch.)

Back to The Prophet‘s prediction that 2024 will be the year where procurement and supply chain suites reclaim mindshare (and more) in the market. (More specifically, S2P [Source-to-Pay] suites, supply chain suites, and ERP providers.)

Which will happen. The only unknowns are how fast and in what areas.

As you get older, you get wiser, and the big corporations have not only learned how to make themselves indispensable, or at least irreplaceable, and how to identify, and attack the shortcomings / risk posed by smaller players and, even if they lose some new business in the short term, reclaim it in the long term.

According to The Prophet, this is firstly because suites and big tech have the capital to fund innovation (through acquisition) in lieu of Series B and C venture rounds.

While big players have, more or less, lost their ability to innovate internally (as their risk and audit departments quash innovation faster than a minnow can swim a dipper), they didn’t suffer* during the COVID years, or the recovery, because those subscription payments kept coming, and now, especially with the drop in available VC and PE capital, they alone have the money to spend to buy whatever they need. And, as The Prophet has indicated, they will.

Moreover, where they can’t, or won’t, buy, they’ll “exclusively” partner with small specialist providers in Direct that make their interfaces more user-friendly and integrate with related applications, use those partners as lead-ins, and pretty much lead the partner down a development path that props up their suite (because they make it more financially lucrative for the smaller partner to do so).

This is also secondly because of the backlash of SaaS proliferation.

While Procurement wants best-of-breed, they can only deal with so many application providers because each new throat-to-choke is yet another provider they have to manage. So unless they truly need something unique or best-of-breed offering wise, an 80% suite solution will do for many departments.

It is thirdly because no one has cracked the direct materials procurement code at scale, especially in the smaller providers. Direct more or less requires a deep, sophisticated, integrated suite of capabilities that cross multiple stand-alone modules in indirect. It’s hard for a smaller player to attack. (And that’s why, as The Prophet notes, Direct is still owned by ERP and Excel!)

Finally, as cash again becomes king, it is because we will see the SaaS Office of the CFO.

Which is true, and which will be discussed again in Part 8, we’ll also see an upsurge is the acquisition of SaaS management tools, which will hopefully lead to a crackdown on Sales and Marketing that have an average of 20 tools each, which do, at most, 2 different things. (And maybe, finally, free up some budget for the CPO for the tools the organization ACTUALLY needs.) (So it’s going to be a good year for those SaaS [Subscription Cost] Management tools!)

So keep an eye on your current suite/ERP provider as well as the competitor suites targeting their market (who may soon bring back the offers of free data transfer/migration services and configuration replication to lock in a multi-year deal).

* Sure they had to tighten the belt and stop having their corporate Christmas parties in penthouse suites while telling the CEO his expense account was no longer unlimited and he couldn’t upgrade the corporate jet, but that’s not exactly suffering.

The Prophet‘s 2024 Procurement Prediction Number 4

Supply Chains Get (Remain?) Political A

The Trump era ushered in a sober reminder to the world (primarily China and the EU) that mercantilism and one-sided trade policy will eventually have to face the music in the face of a sleeping giant who awakens (finally) to a new trade era.

And now the world is responding, and supply Chains are getting extremely political.

The Prophet has five big predictions here … and most are on the money (as you can probably deduce given that the doctor has given the prediction an A).

1) All major US Presidential candidates and parties march in unison on trade. And you won’t hear a peep about it — since they’re all too busy trying to rip each other apart for sinful ideas and acts, including many they didn’t even do. (But this is not a political site, so you can do your own research here.)

2) The US deepens ties with those regions (trade-wise) which are necessary to eventually operate supply chains independently of China. This could actually be 1b) as it’s a fallout from flawed trade policy and practices of the past two decades.

3a) Technology transfer, favorable trade terms and investment deals become the price Israel pays to “finish the job”.

Nope. Since Hamas achieved it’s goal of triggering other militant and terror groups to both attack trade ships and increase their (terror group) resentment, and hate, of the US, Israel doesn’t need to do anything to “finish the job” — they will get what they need regardless of what Congress or the Senate wants throughout this year as Biden actually said “Israel could get into a fistfight with this country and we’d still defend” it — so now that US trade is being actively attacked, Biden will make sure the US is there doing whatever is needed pro-bono (including bombing Yemen and [future] Israeli targets on behalf of Israel).

3b) Saudi and the UAE quietly deepen ties with Israel to create a broader trading block powerhouse in the Middle East (outside of the headlines, at least for now).

The Prophet hit the bullseye here. Saudi and the UAE are going to work with Israel to create the trading block powerhouse in the backroom to become the preferred trading block of the US and UK in the middle east (as Iran is pushed out due to their [perceived] lack of willingness to help contain the Houthis and other Islamist terrorist groups).

4) China continues its mercantilist march to fight for the natural resources it needs (to import) around the world as its trade imbalance declines. (Note that, in 2022, China Imports to the US were 563B and its total trade surplus was 877 B US dollars, vs 230 B US in 2012. If it lost half of US exports, it would lose 33% of it’s trade surplus and if the EU followed suit, who imports 626 B Euros, it would be down 72% of its trade surplus, and be back to 2012 trade surplus level.)

5) The EU becomes increasingly irrelevant … as a trading block and single economic group as backlash to central policies, country policies, and failed energy policy distract from collaboration.

The backlash to Brussels is becoming quite significant, especially in Poland and neighbouring countries where Ukranian grain and is being dumped and the removal of restrictions mean that the local truckers are losing their jobs (at a time when most of the world doesn’t have enough truckers). There’s the massive protests in Germany due to subsidy cuts for diesel and vehicle taxes for farm equipment. There’s also discontent in the Nordics with the number of Islamic migrants/refugees being let in without verification (which is allowing the terrorists to exploit the system and slip into the EU — as evidenced by the 2022 Oslo shooting). Etc. As a result, trading turmoil is going to increase significantly, even as the EU bands together in spirit (if not in action) on climate change.

You need to identify where the political winds are shifting, or doubling down, and start working on compliant (re)sourcing strategies now before your current source gets cut off, triple tariffed, or unusable due to extended, and still unreliable, delivery times.

Don’t Have Your Supplier Information Covered? Maybe You Need a Canopy.

Next month, Canopy will be releasing the new SaaS version of their platform, built as a modern multi-tenant SaaS application using a modern stack, that is a new version of their current hosted offering, released in 2022, that was built using ten years of knowledge building customized, bespoke, supplier/contract/document data management solutions for enterprises who wanted particular processes supported, single-tenant solutions (due to multi-tenant apprehension), solutions that looked like they were in-house, etc. As they built these solutions (through OCG Software Limited), they learned a lot about supplier information management challenges in global mid-size and enterprise clients — and what a modern SaaS platform needed to do to support it (especially now that companies have realized there are often more disadvantages to single tenant than multi-tenant).

However, as they worked with clients across the spectrum, they learned a few things:

  • organizations of all sizes struggled producing a single golden supplier record
  • … as you decreased in organization size, due to lack of resources, they struggled more
  • there weren’t many solutions for the SME that were easy to learn, use, and configure to just what the organization needed
  • there weren’t (m)any solutions that were completely self-serve that could be bought on a credit card with 100% transparent pricing
  • despite the market noise around onboarding, smaller procurement departments didn’t always want mandatory onboarding out of the box — it takes time to get other departments aligned and change existing processes; they want to start with a golden record and go from there
  • most of these SMEs that don’t have supplier management don’t have contract management either
  • everyone wants performance capability, but not everyone uses it … it’s way more important they get compliance requirements in order, than risk under control … some smaller enterprises will never get beyond that

As a result of these learnings, they decided on the following:

  • the focus in the core application is making it easy to create a single, centralized, complete, verifiable supplier golden record
  • … which can be as basic or extensive as the organization needs to minimize the effort on the practioner
  • it’s fully configurable in terms of data elements — there are basic categories and elements out of the box, but these can be hidden, renamed, or extended as needed
  • they are releasing a basic SIM (Supplier Information Management) offering at 99£ that will allow up to five users to maintain supplier records (which can include all associated contracts) and anyone in the organization to read them
  • the onboarding solution is the next tier up (at 499£ a month)
  • performance is included in the tier 3 solution, which also includes extensive compliance and risk management capabilities for the average SME and ERP integration (where they integrate to your ERP — they’ve integrated with 7+ of the top 10 already)

Canopy have built a tiered offering that should serve the majority of the SME market at the price point they can afford and realize significant value from. (Also, the price point fits in the 120K, which, per year, is what a mid-market should expect to pay for Source-to-Pay (because 120K is more than enough for source-to-pay). We will discuss the solution tier-by-tier.

Tier 1: Supplier Information Management

The Canopy solution is a fairly extensive Supplier Information Management out-of-the-box. It allows you to capture all of the basic information on the:

  • company (ownership, HQ, primary categories, etc.)
  • contacts
  • category hierarchy (their default USPSC or yours)
  • products & specifications (mapped to the categories)
  • quality
  • services
  • insurance and other certificates
  • financial summary
  • tax status
  • health & safety
  • modern slavery
  • diversity

as well as allowing the buyer to

  • make arbitrary notes and maintain them chronologically over time
  • access a complete, unalterable, audit trail of all changes made by any party over time
    (which has been tested, and accepted, by the courts)
  • manage the administrative and non-administrative users and define what data they can edit or access
  • add arbitrary data elements to each category as needed
  • filter on any data element
  • output supplier reports summarizing all key supplier information
  • output text reports / supplier lists on any set of data points
  • get automated notifications based upon document expiry or pre-defined dates
  • define supplier owners

Quite good for a 99£/month starter solution!

Tier 2: Supplier Onboarding, Approvals, and Contract Management

The Canopy solution for the SME market that wants automated onboarding, supplier approvals, contract management, and the option for ERP integration is their tier 2 offering at only 499£/month (or less with an up-front payment for a year, which can be put on most company p-Cards) … still cheap enough to put on a credit card while meeting all of the basic needs of a SME Procurement department just starting their company wide supplier management journey.

Supplier Onboarding

Canopy built their solution to not only be highly configurable by the user with respect to the data that can be collected, the approvals that can be required, and the documents that can be stored, but also with respect to the UX configuration for the supplier. The branding and colours, in particular, is very configurable so it looks like the supplier portal is an in-house buyer solution. Canopy doesn’t appear anywhere in the configuration.

A supplier logs in, sees the profile they need to complete (which can have conditional elements so they only need to see relevant questions), and any questions or requests outstanding from the buyer. It’s designed to be as intuitive as possible to minimize the need for buyer interaction (or support).


In the Canopy system, the buyer can define approvals against any category or item of information in the supplier profile — bank account info, Infosec/IT requirements, modern slavery requirements, insurance requirements, etc. These can happen in parallel, and until all approvals are given, the supplier can remain in an unapproved state.

Contract Management

The platform supports the majority of the core requirements for basic contract management / contract governance which, as per Part 24 of our S2P series on Contract Governance, is:

  • indexing and classification with document management
    the system supports all of the standard metadata and the buyer can define additional fields as necessary
  • obligation, deliverable and expiration tracking
    the system tracks expirations by default, and you can add fields for obligations and deliverables
  • alerting & notifications
    the system can be configured to alert you near / on / after expiration and send out notifications
  • amendment & addendum management
    the system can support the inclusion of as many addendums (and thus amendments as you like)
  • equal support for buy-side and sell-side
    suppliers can upload all requested documents and view what they uploaded; not quite equal, but enough for most SMEs

Tier 3: Compliance, Risk, and Performance

The Canopy Solution also has modules for compliance, risk, and performance.


The compliance module allows the organization to define supplier compliance requirements that can be category or profile dependent. It can track the required documents, expiry, the appropriate metadata for easy search, approval status, and, most importantly, whether the supplier responses or documents meet the organizational and/or regulatory compliance requirements. And, if a supplier is non-compliant, it can clearly put them into a non-compliance status and, if you have integrated the platform into your ERP, push the compliance status into your ERP.

Moreover, out of the box, it comes with detailed profiles for modern slavery, ESG, and one or two other compliance requirements the majority of its UK/EU customers have to deal with. (In contrast, the basic tier 1 solution only has a small basic data set, no approvals, no dependent requirements, etc.)


The companion to the compliance module, it allows the organization to define risk criteria of interest that can be category or supplier profile dependent. It can track any requested or required documents, the “expiry” for when you want a supplier to re-upload or reconfirm the documents, all appropriate fields, the last update or confirmation, and, most importantly, the risk the supplier poses with respect to a requirement based on how they answer the requirement, which can be dependent on a series of questions and answers that can differentiate between high-medium-low risk (or, if configured, additional levels such as very high and very low). It can then compute an overall risk profile based on the highest risk or the average risk.

Also, like compliance, out of the box, it comes with a number of detailed profiles for info-sec, financial status, and health and safety. Which, of course, can all be edited and customized to the buyer’s liking.


The performance module allows the buyer to define the dimensions they want to evaluate the suppliers on, the scale (1 to 5, by default, or 1 to 10) they want to grade suppliers on, grade those suppliers singularly, or send out surveys to as many users as desired and compute a weighted store. It’s simple, but that means it’s also quick and easy and usable by an SME. The one request that almost every SXM buyer puts into a SXM RFP is Performance Scoring, Tracking, and Management. The least used feature, simultaneously, is also Performance because it’s usually an effort to get everyone on board and get it done, especially in an extremely overworked and understaffed Procurement Department in an SME organization. But since it’s so simple, it can actually be rolled out once the impacted users in risk, compliance, finance and other departments get used to the system (through their approvals).

ERP Integration

Finally, this level, with a minimum one year commitment, includes integration into your ERP. They have integration experience with most of the big ERPs, and know the quirks of SAP, Oracle, Vista, NetSuite, IFS, and Microsoft Dynamics in particular.

Full Data Export

Canopy belives your data is your data, and you can do complete .csv exports at any time. They also support JSON on request, and if you need your data in a certain format (XML, etc.) for integration to another system, they can do that on request. (Service fees may be required.)

Coming Soon: The Roadmap

They have quite a bit on their roadmap, especially at Tier 3, and you’ll see the first iterations of the following this year.

Graphical Analysis and Reporting

Right now, the reports are largely text based, but since they support Risk and ESG data, they want the data to come alive. Also, as they’ve found that most of their customers don’t have good spend analysis, they plan to support spend import from the AP/I2P system (invoices and payments) and provide the users with basic spend reports by supplier (along with an invoice repository for users who want to drill in). This won’t be a (replacement for a) spend analysis system, but basic spend levels to help users understand how much spend goes through a supplier, when it was last used, and how important compliance/risk assessments are.

NLP/LLM Document Processing and Metadata Extraction

Right now, you can upload all the documents you want, but you have to define and fill in all of your own metadata. This will parse the documents and pre-fill the metadata fields with suggested data (based on confidence matches), which the buyer can then override, for easy document upload and indexing.

NLP query support for metadata and document search

Can’t remember where that parameter is? No problem, just type a question in the NLP search box and the system will find the field and generate the right query/filter. Also, did you forget to index something, but need to know all documents that have it (such as a risk clause for a specific risk, renewal clause, etc.), they’re working on NLP queries that can support free-form (not just metadata) document search as well. (This latter feature may not come this year, all depending on how fast they finish the above.)

In Summary …

All in all, it’s a very extensive SXM solution for a SME given that tier 3 can start at only a few thousand pounds a month for a SME! And it’s clean, quick, and easy to use to boot. If you’re an SME in the 20M to 200M range, we strongly suggest you check it out. It might be just what you need to get your supplier management challenge under control.

Roughly Half a Trillion Dollars Will Be Wasted on SaaS Spend This Year and up to One Trillion Dollars on IT Services. How Much Will You Waste?

Before we continue, yes, that is TRILLION, numerically represented as 1,000,000,000,000, repeated twice in the title and yes we mean US (as in United States of America) dollars!

Gartner projects that IT spend will surpass 5 Trillion this year. When you consider that 30% of IT spend is usually for software, and that one third (or more) of software spend is wasted (for unused licenses, which is why we have a whole category of IT and SaaS specialists that analyze your out-of-control SaaS and software spend and typically find 30% to 40% overspend in a few days), that means that roughly half a trillion dollars will be wasted on software this year.

Even worse, Gartner projects that spending on IT Services will reach 1.5 Trillion. And the waste here could be two thirds! Now, we all know that you need IT services to implement, integrate, and maintain those IT systems you buy. But how much do you need? And how much should you pay? Consider that an intermediate software developer should be making 150K a year (or 75/hour), that says that an intermediate implementation specialist shouldn’t be making any more than that, and not billed at more than 3 times that (or 225/hour). But how much are you being billed for relatively inexperienced implementation consultant, with maybe a few years of overall experience and maybe six months on the system that you are installing? the doctor knows that rates of $300 to $500 are not uncommon for these resources that are oversold and overcharged for.

But this isn’t the worst of it. As per our upcoming article Fraud And Waste Are Not The Same Thing, many implementation “partners” will try to get all they can get and make sure that when you go in for a penny, you go in for a pound and they will push for:

  • frequent change orders during implementation, usually billed at excessively high day rates as they have to “divert resources” or “work overtime”
  • unnecessary customizations or real-time integrations that are an extensive amount of work (and cost) when out-of-the-box or daily flat-file synchs are more than sufficient
  • extensive “process evaluation” or “process transformation” processes that are well beyond what you need to eat up consulting hours
  • extensive “best practice” education when your practices are good enough for now and/or those best practices are already encoded in the system you just bought and paid a pretty penny for and just following the default process gives you the same education

That will often double to triple the cost. But that’s not the worst of it. As per comments the doctor has made on LinkedIn, he regularly hears stories of niche providers losing 200K deals because customers said their quote was too low because all the Big X companies quoted over 1,000K for 100K worth of work. Literally. This is because, as the doctor has noted in previous posts and comments on LinkedIn:

  • they don’t have the talent in advanced tech (and even The Prophet has noted their lack of talent in areas of advanced tech in multiple LinkedIn posts, though he has been much more diplomatic than the doctor in discussing their lack thereof; but he did note in a 2024 advice post that consultancies are going to have a hard time attracting talent this year) — for every area, they’ll have a team leader who’s a superstar, two or three handpicked lieutenants who are above average, and then 20 to 40 benchwarmers who are junior and not worth the rate they are charging)
  • they have an incredible overhead — posh offices to house the partners making more than top lawyers who have a lifestyle to maintain
  • they don’t have the knowledge of, or experience in, modern tools — some of which are ten times more powerful than last generation tools; this, of course, means the Big X benchwarmers are using last generation tools which take ten times the manual labour to extract value from
  • etc.

There’s a reason the doctor said that if you want to get analytics and AI right, DON’T HIRE A F6CKW@D FROM A BIG X! and stands by it! Unless you want to pay 1K an hour, you’re not getting that one superstar resource trying to be the front end to two dozen projects that his three lieutenants are trying to manage, all of which are staffed by junior to intermediate individuals who can barely follow the three to five year old playbook.

There’s a reason that The Prophet predicted in his 9th prediction that SaaS Management Solutions [will] Start to Eat Services Procurement Tech and that many companies will go in house if they have tech expertise. Because he realizes that these consultancies will have a hard time not only hiring, but retaining, tech talent when they have hiring freezes, salary freezes, and reduced engagements as more and more companies can’t afford the ridiculous rates they’ve been charging recently. (Companies may not have had a choice during COVID where it was implement on-line collaboration and B2B tech or perish, but now they do.)

But there are still many companies who will, when they encounter a (perceived) tech need, immediately pick up the phone and call Accenture, CapGemini, Deloitte, McKinsey, etc. and bring them in to help them understand who to bring in for an engagement, instead of widening the net to niche providers who are 3 to 5 times cheaper, and who will deliver results at least as good, if not better.

Now, again, the doctor would like to stress that, despite how much he insists they are usually not the right solution for advanced tech implementation, that Big X are not all bad, and sometimes worth more than the high fees they charge. Most of these companies started off as management/operational/finance/strategy consultants and grew big because they were one of the best, and in certain domains, each of these companies still are. But being good at a few things doesn’t mean they are good at everything, and that’s very important to remember.

And while there will be exceptions to the rule (as every one of these companies has some tech geniuses), the reality is that when you need more bodies than there are talented bodies in an entire industry, you’re not going to get them and, because consultancies are not cool when you want to be a tech superstar (and join a startup that becomes a unicorn), the ratio of superstar to above average to average to below average talent in these organizations is much worse than in multinational tech companies (like Alphabet, Apple, Meta, Microsoft, etc.) where you know the majority of their employees are not the best of the best. (Because if they were the best of the best, there’s no way they’d lay off 10,000 employees at a time every time the market jitters.)

In short, manage that IT services spend carefully, or you’ll be double paying, triple paying, or worse and providing a big chunk of the roughly ONE TRILLION DOLLARS in IT services overspend that the doctor predicts will happen (again) this year. (Unless, of course, you agree with Doctor Evil who says, why make trillions when we could make … billions. Because that’s exactly what happens when you overpay for software and services. Don’t expect the Big X to say anything as they get the majority that overspend, and that’s how they stay so [insanely] profitable.)

The Prophet‘s 2024 Procurement Prediction Number 3

Supply Chains Cope By Developing a Sense of Humour A+

You have two choices. Laugh or cry. Crying didn’t work in Covid and certainly won’t now. It’s literally the only choice for Supply Chains that want to survive.

Moreover, with so much going on, as The Prophet notes, how does one predict what supply chain and procurement show is next to drop? And will it be:

  • frenetic commodity and input costs rendering sourcing strategies all but impossible to get right
  • wrong demand signals resulting with you being stuck with all the wrong inventory
  • supplier bankruptcies disrupting production and essential services
  • a global scale terrorism event, as per The Prophet‘s 2024 Procurement Prediction Number 1
  • the whiplash of DEI-led HR procurement/supply chain strategies which walked experience and expertise out the door in favour of inexperienced and uneducated minorities to fulfill an agenda

as well as (which were not mentioned by The Prophet in his list)

  • massive, coordinated, labour strikes across multiple ports
  • acts of war that result in massive sanctions against an entire country that effectively eliminate them from the sourcing equation entirely
  • escalated global boycotts of your products simply due to state (country) affiliation that create a rampant drop in demand (when you have perishable goods and contracted deliveries in transit)
  • more countries undergo rapid massive economic decline (like Venezuala, Ukraine, and South Africa, which are all in the top 30 for economic decline); e.g. Iran, a home of the Houthi rebels, is a top 40 fragile state and a large global producer of Petroleum)
  • the double whammy of long-term double-canal shutdowns as we enter Panamanian dry season and an increased escalation of attacks in the Red Sea

… and about a dozen more risks of slightly less severity and probably three or four major risks we haven’t thought about yet! (Many of which, as we noted in part one, are going to hit us one by one as the black swans break flight formation and barrel roll directly at our supply chains.)

So if you huddle in the tub and cry, not only will you either permanently damage your tear-ducts or drown, but you won’t solve anything. So it’s time to develop, possibly a very dark, sense of humour, laugh when you can, and get yourself mentally ready for black-swan defense and disaster mitigation.