Category Archives: Best Practices

Blind AI “Agents” Will Only Worsen Any Situation!

THE PROPHET recently posted that The AI Overton Window is Open in Government Procurement and that makes the doctor scared for you. The damage they can do in private situations is bad. The damage they can do in public situations is much, much worse.

The following obvious outcomes that the doctor already noted in his rebuttal are just the tip of the iceberg:

  • biased awards
  • overpriced awards to holdings of the billionaires that provide the tech
  • non-compliant awards because submitting a form is NOT verifying quality
  • billions lost to fraud as foreign bad actors use their AI to game our AI and direct Billions to accounts that will quickly be emptied to offshore accounts and then untraceable crypto!

For those of you that haven’t figure it out yet, all AI is biased as it is trained to repeat the patterns found in the training data provided, and all of that data is biased to existing providers and decision patterns of biased award judges who find sneaky ways to direct contracts to the recipients they want to give the business too (whether or not they are the best value for the taxpayer’s money). If your President and his DOGE are telling you the truth, fraud (and thus bias) is rampant, and “AI” will just perpetuate that.

Since there are only a few players who are big enough to handle the data volumes and computational workload that would be required to support the US Federal Government, they have an effective monopoly. As a result, they can charge pretty much whatever they want and get it. (And we have already seen how overpriced this technology is. Total Open AI funding to date: 17.9B [TrackXn] compared to total DeepSeek funding to date: 1B [Pitchbook]. The model is more or less as good as the OpenAI model at less than 1/18th the cost [although there is the issue of the controlling company and country]. The next iteration will probably be built for under 100M. Just don’t expect any improvements in performance. There are inherent limitations in the underlying model/technology they keep building on, we don’t have anything better, and given that it usually decades between real breakthroughs in research, we likely won’t until the late 2030s.]) The end result is that the government will probably end up paying twenty (20) to one hundred (100) times what the technology itself is worth because of the lock on the market the big players have in the US.

Applications can only process the data given to them, they cannot confirm it’s validity. All a supplier has to do is lie on a form or get a third party to (electronically) sign a false form (with a small bribe), and, voila, the AI thinks the supplier meets all the requirements. As long as the supplier is the lowest cost and/or highest score on other metrics (which can be achieved through the submission of false data that matches what the algorithm is looking for), it gets the award. And the taxpayer suffers.

Taking this one step further, if awards come with an up-front payment, all a foreign actor has to do is register a fake front company on American soil, bribe third parties to help it submit a lot of false forms, game the system, get the award, get the up-front payment, wire it to an untraceable offshore account, and disappear and if that up-front payment is millions of US dollars, its easy money. Now, if the government is smart and insists that there is no payment until delivery, depending on what that delivery is, if cheap knockoffs can be produced at a fraction of the price (that don’t have the reliability, lifespan, etc.), then this trick could be used, and then, after a few large shipments are delivered, and before the poor quality products break down, the supplier could all of a sudden close shop and disappear. If this doesn’t work, if the foreign actors are training their AI to generate realistic looking data to be fed into America’s AI, it’s just a matter of faking a delivery receipt to accompany an invoice for goods not delivered, getting that first payment, and then disappearing. This is just the tip of the iceberg of obvious fraud opportunities (and every worst case hypothetical situation in your espionage movies and books will come to pass, and more).

In other words, only bad things will happen if you try to deploy AI “agents” to do a human’s job!

We need to stop this ridiculous focus on AI Agents and instead focus on AI helpers. We need to end these bullsh!t claims that we are going to achieve full artificial intelligence and instead focus on augmented intelligence and build tools that enable white collar workers to become super human in their jobs and do the work that used to take ten people. Because that IS possible today (and has been for a while, especially since that was the route we were going down before “chat, j’ai pété” came along with its false promises of artificial intelligence, reasoning, etc.).

All we have to do is, for every problem, apply our human intelligence (HI), design, or redesign, a the process to solve it so that all of the tactical data processing (the thunking the machines can do a Billion times better than us) is separated from the strategic decision making (the thinking the machine cannot do) and the machine automatically does all of the data processing and thunking that needs to be done at each step so that we have the knowledge (processed data) we need to make the right decision (and a well designed interface that allows us to quickly absorb the summary, identify factors that might change the typical decision, and dive into the knowledge and underlying data) and be confident in it.

In other words, we shouldn’t be doing the same analysis and running the same reports over and over again, the machine should automate all of that [as well as various outlier analysis] and present us with the summary, whether it is typical or atypical, the decisions and actions we typically make in similar situations, and the results typically achieved. In many cases, a well-designed process and properly encoded knowledge will result in the machine making the right suggestion, and all we will have to do is verify a suggestion. When it’s wrong, the system should still have the appropriate decision encoded as an alternate the majority of the time, and we should just have to select that. And in the exceptional situation we never thought of, or for which it has no data, we will still be able to alter the process, encode our reasoning, and recode the system to suggest the right action the next time the situation arises, meaning that we will not only start off being ten times as productive, but get more productive over time.

The only real constraints we have are on the data we can leverage due to

  1. the lack of good, clean, verified data (and AI will NOT fix that) in most organizations (private and public)
  2. the lack of proper tools to do an office job in the modern age!

For example, if you give me the right modelling, analytics, optimization, and RPA tools, I can leverage ALL the data at my disposal to arrive at the optimal decision (given the time to do so). But how many Procurement personnel have access to all of these tools? Moreover, what percentage of those personnel would know how to fully leverage those tools (considering you need advanced degrees in mathematics and computer science to do so today). And what percentage still would have the time to do so? The percentage can be expressed by a single digit in industry (if you round up). It’s worse in government! But properly designed tools that embed best practice and human intelligence on top of these tools and bring the knowledge requirements down to what an average Procurement professional has would allow them to be ten times as productive in their analysis and make the right decision every time.

Moreover, the compliance slowdown that people are grumbling about is due to lack of good tools (RPA platforms that walk the users through the process) and people to do the work that HAS to be done manually. (And AI is NOT going to fix the fact that health, safety, quality, and oversight inspectors, where you don’t have enough qualified people to begin with, can be fired in droves and further increase backlogs.)

And guess what? We still handle unstructured data better than AI as some of the BS it continues to spit out in what they call “edge cases” is astounding! (the doctor really hopes the maverick doesn’t go mad in his conversations with DeepSeek — it almost drove the doctor mad just reading them!)

In other words, the core of any business function MUST continue to be HUMANs applying HUMAN INTELLIGENCE (HI!), and modern technology must AUGMENT (not replace) every function. Properly (human) designed and (human) implemented systems that use the right Augmented Intelligence technology (not the hype of the day) to supercharge a human-driven process can make the human easily ten times more efficient in some cases. (But left to their own devices, interacting AI agents will, more-or-less, as Meta found out in multiple forays last decade and this decade, self destruct.)

2025 Is Just Another Year … But Is It All Doom and Gloom? Part 6 (Wayward Son)

The real answer is: yes (for the majority) and no (for the minority). So be in the minority. And continue to

Keep Calm and Carry On

Ignore the FOMO (Fear Of Missing Out) and the FUD (Fear, Uncertainty, and Doubt) that the vendors and analyst firms are trying to instill in you on a daily basis in an effort to get you to buy, buy, buy something that you probably don’t need and definitely won’t work for you. (Just remember that tech project failure rate has reached an all time high of 88% [and climbing]. The more FUD you fall for, the more failure you’ll see in return.)

It’s not about the shiny new hotness, it’s about what actually solves your problems and works for you. And, as I’m not sorry to say, more often than not in back office data processing (which Procurement is), it’s usually the Old Busted Hotness that gets the job done.

Moreover, the fundamentals of problem identification and problem solving HAVE NOT changed.

  1. Understand the problem
  2. Formulate the problem
  3. Find the root cause
  4. Identify potential solutions
  5. Evaluate potential solutions (independent of marketing or underlying tech)
  6. Select and implement a solution

And you can do this using one or more general problem solving strategies. Moreover, if you need to understand the underlying tech, you can employ an expert to help you. When it comes to solution selection, the right consultants are cheap, especially when they have a solid foundation in Tech and the Domain in which you are trying to solve the problem, and you don’t, and these consultants already know a large number of potential solutions to help you evaluate. (Sometimes hundreds of them.) (Need help finding the right consultant? You can always contact the doctor.)

Furthermore, while it could be difficult to figure out the process you should be using and the system you should be using to implement the process, there are expert consultants who can help you map what you have, explain the art of the possible, explain the pros and cons of each process choice, and come up with the real requirements for a solution RFP (which should NOT be a list of feature and functions, and should not specify the how, only the what — and if you don’t understand why, engage a technology expert to help you with the solution/technology RFP and DO NOT use a FREE RFP Template as they are all lies)!

Roll Up Your Sleeves

Staples lied to you and all of the vendors repeat the lies daily. There is NO Big Red Easy Button. There is no Magic Gen-AI solution. There will be no Agentric AI that will come along and make your job super easy — and if you are using any of your intelligence whatsoever to make strategic decisions, the technology will not replace you. (But properly applied, it will enhance your performance beyond belief … you’ll be able to do the work of ten (10) or more peers! Now, this might be bad news for your peers if they can’t adapt and aren’t near the top of their game, but fortunately for us, talent is super scarce in Procurement and no one who’s good at their job should be in danger of losing it, as long as they are willing to skill up and keep performing).

But you will need to do a LOT of work to figure out what you need, why you need it, how you employ it, how you will utilize it most effectively, how you will achieve the ROI, and how you will build and sell the business plan. Then you have to manage the vendor selection process properly, the implementor/integrator process properly, the training and adoption process (because it’s NOT a matter of if you buy it they will use it, it’s more like if you buy it they will do everything they can to bypass it until it is easier to use the system than bypass it and everyone understands it). And when it comes to training the ML/AI enabled systems and verifying their recommendations, you won’t just need your brain on full, but your research skills on full as these systems are so convincing even when the recommendation is the worst recommendation possible that lesser minds will just accept the recommendation blindly.

Be ready to use your Human Intelligence (HI!)

The more advanced the technology gets, the MORE you need to use your human intelligence. Your job will get much more mentally challenging, as it will soon revolve entirely around strategy and system training (and, of course, human relations — what the technology cannot do), as the promises of an easy life multiply. However, once you select, implement, train, and wrap your mind around the new technology, the (physical) effort and drudgery you will have to employ will decrease significantly as that is the work that will be turned entirely over to the system. A human intelligence that can properly make use of augmented intelligence is the one that will enable Procurement to thrive.

And Remember

Just because 2025 is just another year, that doesn’t mean it has to be another year of struggle. Just because vendors won’t make a difference; analyst firms won’t make a difference; and the C-Suite likely won’t see beyond their desperate need for cost savings (if only to increase profit so the CEO can take home a few more million dollars he doesn’t need); that doesn’t mean you can’t make a difference. As we’ve pointed out, we’ve reached a point where you can, even with very little budget to help you. You just need to do it, start saving, and use those savings to invest in more tools and processes that create more value. But you have to take the lead. It’s up to you.

2025 Is Just Another Year … But Is It All Doom and Gloom? Part 5 (Risk Reduction)

It’s just another year, unless you look beyond the hype, identify true talent, give them real solutions, and then truly tackle the threats … with strategies for success.

Supplier (Plant) Shut Down

In reality, typically only three things shut down a supplier:

  • Bankruptcy
  • Disasters
  • Governments

With respect to each of these:

  • you can typically predict bankruptcy from financial monitoring, which is easily available for public companies, semi-available for private companies that survive off of international trade (just monitor the public trade data), and highly correlated with a noticeable decrease in quality or performance (which can be predicted off of your data)
  • you can’t predict disasters, but based on geo-location, you can predict type and likelihood, and subscribe to news-based event monitoring services to identify when one happens that likely impacts your supplier (and then verify) so you know the minute a disruption occurs, and not three months later when the order doesn’t materialize
  • governments will generally only shut down a company if it is a fraudulent enterprise or when they are taking something over that was private; your category expert consultant can let you know whether or not the country the supplier/plant is in has a history of forced public acquisition or is eyeing restrictions on the industry (and otherwise, the risk is pretty much non-existent)

Supplier Becomes Unreachable

This usually happens as a result of three things:

  • sanctions
  • border closings
  • customs / port shutdowns due to strikes

With respect to each of these:

  • sanctions are typically politically driven and hard to predict, but a sanction list monitoring service can inform you within 24 hours if a supplier or connected party has been sanctioned
  • border closings usually result from trade wars or real wars, and news monitoring can indicate potential that can be monitored, and once the threat gets too high, you can proactively identify new / switch suppliers
  • customs / port contracts with unions in terms of validity dates are typically public knowledge, and you can monitor when they end, and whether there is any news that negotiations have started once you get close (say 3 months) to expiry … as well as monitor statements put out by both sides during negotiations that could indicate a strike (vote) (and look at the history to see how often a strike [vote] results in a strike, how long it usually lasts, etc.)

Supplier Loses Access to Raw Materials

With respect to a supplier losing supply, they have the same risks you do with respect to supply lines, plus two more major ones and one more minor one:

  • sanctions, border closings, and strikes
  • mine collapse / crop destruction from a natural disaster
  • government reclamations or limitations on natural resource extractions
  • mine / well runs dry!

With respect to each of these risks, if you map your supplier’s critical supply chain:

  • you can monitor sanction lists for sub-tier suppliers and news sources for events that would lead to border closings and strikes as you do for your suppliers
  • you can monitor news sources for events that indicate a natural disaster that would threaten or destroy raw material supply
  • you can research past history and monitor news sources for indications a government might restrict access to or reclaim natural resources from the private supplier in your supply chain
  • you can contact environmental experts to determine when a given source a sub-tier supplier depends on might run out!

Logistic Route Cut-Off

This is pretty straightforward to enumerate. In addition to port closures above, you have:

  • major carrier strikes and failures (as only public postal services can run deficits ad infinitum)
  • natural disasters that take down major roads, bridges, and ports
  • intermediate border closings on current routes

And the way you handle each of these is to:

  • monitor the financial scores from the financial monitoring services and the union contract expiry dates to know when you need to look for negotiations and negotiation status to try and predict if you will need to lock in new carrier contracts before competitor quotes go through the proverbial roof in response to your carrier striking
  • monitor news sources for natural disaster events along your major supply routes
  • monitor geopolitical situations across countries on your routes

Procurement risk management doesn’t have to be hard to not only be good enough, but considerably better than your peers. Dwell on that.

2025 Is Just Another Year … But Is It All Doom and Gloom? Part 4 (Risk Redux)

It’s just another year, unless you look beyond the hype, identify true talent, give them real solutions, and then truly tackle the threats.

Risk Management IS Easy

And so is getting started with risk management as long as you approach it correctly! The key is not to try and identify every conceivable risk that might impact your business (there are literally too many to enumerate now and trying will drive you mad — but if you really want to try, we suggest starting with the 101 Damnations that SI chronicled for you back in 2015), but to identify what impacts would seriously hurt your business and work backwards to risks from there.

For example, if your primary revenue stream is products, what are your major product lines where a disruption would significantly hurt (and possibly even end) your business? Analyze the Bills of Material and identify what are the key components that can’t be easily sourced from a different vendor because they are proprietary and/or need a specialized manufacturing process. It doesn’t matter how much you spend on them or with the supplier, it matters how hard it would be to replace the component if it suddenly became unavailable.

Once you identify those critical components, look at

  • the supplier,
  • where the supplier is located,
  • what critical material inputs the supplier needs to make the component, and
  • how it gets the component to you.

The critical risks, that you have to monitor for, mitigate, and manage if they arise are precisely those risks that would

  • shut down the supplier
  • cut the supplier off from you
  • cut the raw material supply to the supplier
  • cut off the logistics routes you depend on

That’s it. Yes, there are more risks. Yes, they could occur. Yes, they could have a big impact on your brand and your business. But chances are that as long as you keep getting product in, selling that product, and moving it out, i.e. as long as you have assurance of supply, everything else will eventually blow over or be forgotten. Even if there is a temporary disruption in profit, it will return and the business will continue. Sensationalist media can’t keep people’s attention if it tries to sell them the same story everyday, so unless your product actually kills people, you don’t really need to worry about brand damage (unless it’s due to a lack of quality control, but you should already be ensuring that on every contract signature and critical shipment). (Plus, preventing brand damage for something out of your control is PR’s job anyway!)

If you analyze these four risks, and cross-correlate with the World Economic Forum’s Global Risk Report, you’ll see that most of the time there’s not that many risks with a reasonably significant chance of occurrence that you really need to worry about. (Except Pandemics! There’s going to be more of those as the world still isn’t ready for them and wont’ make the investment to get ready for them.)

Focus on identifying the risks around supplier and supply, and you’ll be leagues ahead of your peers.

In the Software World, It Is Never Build vs. Buy!

In a LinkedIn post, THE REVELATOR asks “Why is the build versus buy debate a moot exercise?”.

The answer to this question is super simple.

If you are NOT a software* company, it is NEVER build. NEVER, EVER. Especially since “Build” typically means outsourcing to a Big X who are typically specialist implementors, not builders, and will just have to outsource to a Dev Shop and add a high margin to manage that outsourced project for you IF they want to get it right. (Just Google “Accenture Hertz Lawsuit” to see what happens when they get it wrong, so the smart Big X really do add a layer between you and an outsource Dev Shop in South America, Eastern Europe, or India … and trust us when we say that the last option ain’t always great either!) In the end, the project will cost 5X to 10X, take significantly longer than you expect, and rarely deliver entirely what you want.

The debate today should be “assemble vs. buy”, because the most you should do is determine whether its best to go with one provider who provides some functionality across the board for a function, but maybe not as deep as you want in certain areas, or if you want to assemble a slew of best of breed modules that go deep everywhere you want deep. In the latter case, you are deciding whether you are going to select a slew of best of breed modules from a slew of vendors and oversee the integration yourself (one time cost plus incremental costs on the update of each component solution) or go with an “orchestration” solution (and its year over year SaaS fee) vs. just selecting one of the same old Big Suite providers that will handle everything (with a fee to match).

The only thing that remains correct about the “build” vs buy debate is that you need to maintain the “build” mentality, in that you may have to lego-block “build” from a collection of best-of-breed modular solutions. However, the “build” will never be a build from scratch, just a build from components, the same way we used to assemble our own desktop systems.

* and even if you are a software company, if the type of software needed is not the type of software you build, and there is a reasonable SaaS solution, you should go with that;