Monthly Archives: January 2026

Dangerous Procurement Predictions Part I

If you read my predictions post, you know SI hates predictions posts. It fully despises them because the vast majority of these posts are pure optimistic fantasy and help no one. Why are the posts like this? Because no one wants to hear the sobering reality off of the bat in the new year and the influencers care more about clicks than actually helping you.

But given how dangerous and costly the hopeful fantasy has become, not only did SI swallow its disgust and give you a realistic predictions post, but it’s going to collect and lay bare the most dangerous of the predictions that, even if seemingly innocuous, will lead you astray if you believe them. And now some of the influencers and LinkedIn aficionados are taking up the claims, and the charge, but like many other claims, they are overstated.

Today we tackle the first three, but you can expect this to be the first of many posts as dangerous prediction posts flood your feeds for the rest of the month.

1. The “Great Convergence” Accelerates

The claims of of the ORChestration providers is that all roads lead to them, the convergence will accelerate, and you won’t have to worry about what you need because, as long as you have orchestration, you’ll have it all!

For example, if you want to use the largest orchestration provider in S2P, your are limited to the platforms they have already integrated. The same goes for the second or third largest. Plus, if the providers you want to integrate aren’t reasonably sized Source to Pay providers, good luck expecting the workflow to support them appropriately.

Moreover, they were built to minimally support the existing solutions, not emerging solutions in the Source to Pay and extended Supply Chain Marketplace. In other words, the convergence will continue at a snails pace, but it will never be great!

2. “X” Finally Gets Modern Attention

It doesn’t matter what X is — if X has been needed, but ignored, for the last ten years, it’s NOT going to all of a sudden be addressed this year. For whatever reason, it will continue to be ignored.

Example #1, Cybersecurity.

As per my recent post on breaking down the risks: IP / cyberattacks, the risk of cyberattacks has been high since 2014, a year when 71% of organizations were affected by a successful cyberattack! Ten years later, 70% of small to medium sized businesses are still getting hit by cyberattacks. (Which means that if it was going to get major attention, shouldn’t 2014 have been the year?!?)

Nothing has changed — the reason? Cybersecurity is seen as a cost, not a return. So, when a successful attack results in significant losses, organizations spend on improved cybersecurity, and ignore it until the next significant successful attack hits, and that is the only time they will spend for new systems across the board, and that’s it. That’s why cybersecurity, inside and outside the organization, won’t get any more attention this year than last year.

Example #2, Risk Management.

There’s a big reason it’s been the exact same risks in the state of procurement studies and reports for at least the last five, if not the last ten, years. It’s because, despite the fact that risks keep increasing, no one ever does anything about it … there’s no additional investment in risk management software. Why? Again, it’s seen as a cost and not an investment. And when you’re already paying for insurance, why pay for what, at best, seems like more?

Even though the cost of insurance will soon be unaffordable given that natural disaster and fraud losses are going through the roof, if you can even get insurance at all, risk management solutions are still being ignored by every organization that hasn’t suffered a major loss as a result of a risk-related event. (And who knows if insurance will cover AI losses when AI escapes the vending machine? It’s a question you should definitely be asking!)

Example #3, Direct.

That’s supply chain, right? Right?

Wrong! But that’s the view that the vast majority of Source-to-Pay providers have taken since the beginning. Sure a few big suites picked up a few smaller players that specialized in direct sourcing, but that’s about it from the big players. And there are a few startups here and there, but they’re all overlooked, underfunded, and not getting any traction.

Because it’s hard. Damn hard. And the majority of S2P players don’t want hard. They want easy. They built easy. They sell easy. And that’s all they want to do. (And, often, all they can do!)

We could continue, but you get the point.

3. One of the big legacy S2P suites will go out of business.

This is a prediction straight from the genius of Gary Wright. Only a Dream Weaver would predict this! This has happened exactly once since our space began in the late 1990s, and it wasn’t exactly going out of business, it was a big acquirer deciding the space wasn’t profitable enough and shutting the vendor down. Specifically, it was IBM shutting down Emptoris and shunting all the customers to SAP Ariba in 2017.

Every big provider in this space is controlled by PE who have poured tens, hundreds, or thousands of millions (that’s billions) into the firm. If it starts losing money, and if they think they can’t turn it around, rather than shutting it down, they’ll flip it to another firm at a loss (to recover some investment) who will pick up some fire sale acquisitions, integrate them, update the UX, install a whole new management team, fluff it up, rebrand it, and bring it out with a whole new spin. Like ERPs, Suites never die. Even if they’re twenty years behind the times.

So if a new big player hits the scene, check under the covers, do a bit of research, and dig up those skeletons. PE knows how to make everything old new again, but tech is not like fashion, and you don’t want two decades old SaaS, as that’s just the same old sh!t.

Primary ProcureTech Concern: Supplier/Supply Chain Resiliency/Continuity

As this is one of the top risks and top barriers to success, it’s no wonder it’s also a top concern.

Why?

Given that supply shortages/constraints have consistently been identified as an organization’s top three risks, and can easily result from geopolitical uncertainty, economic downturns, and even high inflationary pressure, as well as decrease the category/market complexity barrier if key suppliers suddenly exit the market, this should come as no surprise.

Impact Potential

Impact is very straight forward, and summed up nicely by the Arrogant Worms in 4 words: No Sale, No Store. If you don’t have supply, you don’t have product. If you don’t have product, you don’t have anything to sell. No sale, no revenue. No revenue, no organization.

Major Challenges/Risks

  • supplier stability: ensuring they are legit, financially stable, and operating sustainably
  • supply chain stability: country access, operational ports, secure carriers, and so on
  • raw material availability: mine stability, crop protection, etc.
  • financial security: ensuring you have the right agreements in place to ensure supply chain financing as needed
  • multiple relationships: you need primary, secondary, and alternate sources of supply — and for certain materials or products that are rare or unique or bought in low quantity, this can be extremely hard to arrange

Final Words

Supply chain resiliency is in doubt, but supply is crucial, so you need to figure it out. Re-read our barrier and risk pieces and dive in.

Primary ProcureTech Concern: High Inflation Pressure

The two decades of low inflation we experienced in the noughts and tens are two decades we won’t experience again in our lifetimes. Thus, this is a significant concern.

Why?

More precisely, this is a significant concern for two reasons. The first reason is that if costs rise too much, the cost of acquiring the necessary materials and services to make the products and/or deliver the services you sell rise, as well as the cost of MRO and day-by-day operations. If you’re in a thin margin business, inflation pressure is thus a significant concern.

Moreover, this is also a significant concern because wages never keep up with inflation (because, if they did, we wouldn’t see so many port and logistics strikes every time cost of living skyrockets while wages remain flat or indexed against an outdated cost of living increase as of the last contract negotiation that occurred two to five years ago), and if the inflation leads to substantial cost of living increases, the relative share of consumer spending that will be spent on the organization’s products and services will drop, giving them less cash on hand to deal with their rising costs, increasing the spend pressures of their top joint risk.

Impact Potential

The impact is straightforward.

  1. If costs rise too much, not only does profitability fall significantly, but after a point, so does the sustainability of business operations. Cuts could hav to be made with devastating future conferences.
  2. If sales drop too much, critical revenue stops coming in, and the same problems arise.

Major Challenges/Risks

Inflation Projection
Predicting expected inflation over time based upon typical trends as well as from the impact of significant economic events that can cause rapid increases in inflation.

Impact Mitigation
Finding ways to mitigate the expected impact through alternate sources of supply, currency exchanges, operational efficiency improvements, investments, etc.

Final Words

This is a tough nut to crack, especially for Procurement. The organization needs to hire a top economist to help it predict and prepare for inflationary times.

Primary ProcureTech Concern: Compliance

Compliance is not something that any organization can shake.

Why?

As per our risk entry on compliance, compliance is a major risk. In any given country there are dozens (and dozens) of regulations that have to be adhered to. They cover all aspects of operations from workforce to production to distribution and all of the environmental and operational and labelling requirements that go with it.

Impact Potential

  • fines that can be serious as a result of violating any regulatory requirement
  • seizure and destruction if a product contains banned substances
  • criminal charges in some jurisdictions as gross negligence that leads to people getting hurt or killed by your product or service is sometimes enough for criminal charges

Major Challenges/Risks

  • international organizations are subject to hundreds of regulations and even itemizing what they are can be a near impossible task
  • reporting requirements can be quite onerous and exacting, especially when there are language laws, minimum disclosure laws, precise submission requirements, etc.
  • track and trace requirements that may require every raw material to be tracked and traced back to the source

Final Words

The topic of, risks resulting from non, and the barriers that are imposed by compliance could fill volumes, and has. That’s why compliance will always be a top concern, and why you need experts in the various areas and jurisdictions you need to be compliant in to make sure that you are.

Primary ProcureTech Concern: Talent Acquisition/Upskilling

Despite the false promises to the contrary, AI will not replace people for critical tasks in the near future and talent will be required.

Why?

This should be no surprise since one of the biggest barriers to success is the talent gap and one of the largest risks is the loss of the critical talent the organization has. As a result, an organization worried about its future should be very concerned about its ability to identify, acquire, and retain top talent.

Impact Potential

The potential impact of being unable to attract and upskill top talent ranges from

  • inefficiency: when unskilled sub-par talent take longer to get work done and do it more poorly
  • inaccuracy: in analysis and resulting decisions along with process and tech selection
  • inability: to manage categories, design new products, mange contracts and commitments
  • inaccessibility: to key suppliers, tenders, markets, channels, etc. if there is no one that knows how to manage them, speak the language, follow the rules, etc.
  • incohesiveness: as a lack of leadership and/or competence causes teams to fall apart

In summary, a lack of capable Talent can cripple an organization!

Major Challenges/Risks

  • lack of skilled talent: in many STEM (related) areas, there is a lack of skilled talent in the market due to lack of graduates, and even a lack of an appropriate student talent pool (as the US is 19th in the OECD rankings for adaptive problem solving and 25th in the OECD ranking for numeracy overall. (See our recent post.) That’s the good news. In the 2022 PISA test, the US ranked 34th out of 81 countries. When it comes to advanced math levels in the student population, some tests put the percentage of US students at a mere 7% compared to 30% of students in Singapore. Even back office jobs which are now analytics focussed and data dependent require advanced numeracy and problem solving skills.
  • lack of experienced candidates: with every recession, market instability, purported technological advancement, etc., companies slash headcount to preserve cash and the first to go are the experienced talent; then, when they hire, they hire cheap inexperienced graduates — with no one left to train them appropriately
  • lack of leadership: leadership requires people who have been there, done that with leadership skills — the more been there, done that that are retired, and the less that are properly trained, the less there are

Final Words

In summary, there’s a lack of talent across the board and you’re competing with everyone else. A talent war is coming, and it’s not one any organization is guaranteed to win.