A number of leaders in our space, including Sarah Scudder in the comments to this post, have been noting to me that they are seeing AI resonate with companies of all sizes.
Sarah notes that:
1. She’s seeing AI agent automations resonate with smaller companies.
Smaller companies need automation desperately, but it’s important we educate smaller companies that doesn’t mean they need AI. We’ve had adaptive rules-based automation and tailored machine learning in this space for almost 20 years and they can get fantastic results without having to risk being pre-alpha testers for unproven AI while getting the solution they really need for a fraction of the cost of this new, relatively unproven, AI tech! (Remember, firms that dumped millions into this bandwagon need to recoup those millions fast before their investors abandon them, which means high prices for unproven tech!)
2. She’s seeing copilot intelligence resonate with bigger companies who understand risk.
Which makes sense for a small segment of the market who are ready for it because augmented intelligence and automated suggestions with yes/no approvals are great for organizations who
- understand risk and
- understand the categories/markets/domains they are applying the technology in, because a true expert will identify the 95% of the time it’s working just fine; the 3% of the time it’s probably okay (and not worth the effort to double check manually due to the risk threshold); and the 2% of the time they need to slam the breaks and take over.
However, that’s not a very large segment of the market. What most companies still need is better analytics, category intelligence, and guidance from category experts on how to use it and then where and when to integrate automation and co-pilot capabilities.
Furthermore, I’m also being told that:
3. Mid-Markets are looking for technology they can roll out to the organization at large to get tail-spend under control, manage intake, and/or relieve pressure on Procurement to focus on more strategic efforts.
Which resonates, but, again, this is an area where AI is typically not needed. Catalogs, be they hosted, punch-out, hybrid, etc. with the ability to also request/book standard, pre-negotiated, services, easy search, and easy RFQ where there is no standard item but the buyer has budget authority, the vendors are preferred, and the amount doesn’t hit a threshold is often enough. Maybe a natural language search to find the right policy documents or bring up the right products or forms, but that doesn’t require modern AI either — we’ve had that for quite some time as well.
And, as Sarah implies, while organizations of all sizes need help to overcome their excessive workload and limited market insight so that they can prioritize risk management and mitigation in their procurement activities, this doesn’t mean they need AI. Automation yes, advanced technology a definite yes, but AI, rarely! Remember that when building and recommending ACTUAL solutions and not just buzzwords.