Category Archives: Best Practices

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;

2025 Is Just Another Year … But Is It All Doom and Gloom? Part 3 (The Talent Tussle)

It’s another year, unless you decide to make it otherwise. As per our last instalment, the first thing you can do is look behind the hype and find the right tech (and not the tech the vendors and analysts are trying to push upon you.) The next thing you can do is:

Identify Talent Outside the Norms

There’s not enough talent in Procurement as there is, so STOP LOOKING in Procurement. Unless you are going to be smart enough to bring back apprenticeships, and even then, that could be long term talent (especially if you are bringing in kids with no real world experience in what the company does, how to run a company, or even how to do basic buying).

Start looking in functions that understand the business need, and find the doers with good people skills, good planning skills, and good computing technology skills. Hire them and train them in Procurement. Working for a manufacturer buying mainly direct parts — recruit engineers as sourcing professionals. Working for a department store chain selling primarily CPG, hire a distributor rep who knows all the big brands, products, and logistic networks as procurement professionals. Looking to create better contracts, hire a lawyer with a STEM background as your contract manager. What to get vendor management right, hire former vendor account managers who worked for multiple big names that match your customer profile and train them on Procurement needs so they can find a balance that will NOT p!ss off your customers. It’s a lot easier to teach basic Procurement than engineering, advanced logistics modelling and management, law and risk management. Especially to reasonably skilled and intelligent engineers, Masters of Operations Management in logistics, lawyers, and economists specializing in econometrics (and risk management). I’ll tell you one thing, learning everything a Procurement Manager did buying a nine (9) figure category was way easier than designing one of the first Strategic Sourcing Decision Optimization solutions that hit the market (and the first with multi-line item support, as recognized by Gartner 25 years ago), and that’s with a PhD and degrees in mathematics and computer science. It’s not Procurement that’s hard, it’s the people and planning skills that are hard, and that comes from doing the hard STEM (-based) degrees and getting real world experience applying those degrees. And if you can find the engineer, lawyer, economist, etc. who’d rather work with people than machines, and offer them a bit more, those are golden hires that will quickly transform your operation once you teach them what Procurement does (as they are also seekers of efficiency and outcomes).

The reality is that Procurement skill is not buying skill, it’s relationship management skill; it’s strategic planning skill; it’s logistics management and supply assurance skills; it’s quality management; it’s risk identification, mitigation, and management; it’s everything but buying. You can automate an e-auction or a multi-round RFP to do buying, or outsource it to a GPO if you don’t even want to think about it at all. The value of Procurement is not just cutting costs and keeping them down, but it’s keeping the business running, and that requires, as they say, mad skillz, and those aren’t found in traditional Procurement departments staffed by the island of misfit toys, despite what some bloggers may claim.

And then, once you have that talent, remember that they need good solutions and that

There Are Affordable Solutions

If you think solutions still cost mid to high seven figures when all is said and done, I have news for you. It’s not the noughts (even though you may feel like it because budget requests always end in the nots and get you in knots), it’s the twenties. (And if you don’t start roaring, the 20th century showed us what awaits in the thirties.) And good cloud-native SaaS solutions cost two orders of magnitude less. Enterprise licenses for BoB modules that can do everything an average mid-sized plus business needs to do (and more) start in the five figures, with starter solutions for SMEs and smaller mid-sized businesses being cheap enough to put on a P-Card. We’ve already told you about Spendata for spend analysis, but there are solutions for every step of the cycle.

You have (pay-as-you-go) solutions like Market Dojo or Serex Procurement for sourcing. New players like Bedrock and Canopy for SXM (and if you just want survey powered SPM, check out Vendor Score IT). CLM, check out Curtis Fitch or an AnyData Solution. SME Procurement — get yourself a Blue Bean. Or, if you want a full Procurement Suite with proven performance at the mid-market and F500 levels, bundle up everything you need, pay a reasonable six figure fee, and off you go to a Vroozi or Eyvo. Can’t manage those categories? Go do an Airflip. Not enough service management, it’s trivio with Zivio. Vendor Data Nightmare. You don’t need a team of overpriced Big X consultants, you just need a Tealbook. Too many apps? Get a Focal Point. SaaS subscriptions out of control, lock them away in SaaSrooms. And so on. (More information on most of these can be found in the SI Vendor Archives. Also, while the dives are not nearly as deep, Mr. Meads does his best to catalog the mid-market providers on his Procurement Software.site. It may not capture the Mega Map, but trust when I say that’s a good thing!)

Moreover, these solutions don’t take months to implement and years to integrate. They take a flip of a software switch to activate, usually a few hours to days at most to configure, and the only delay is usually your IT department providing the integration details to the necessary systems or producing the data dumps for flat file upload (which will then have to be cleansed, enriched, and mapped because your data will be dirty.) Some of these (like true DIY analytics, vendor performance assessment, and e-Procurement enhanced with full internal catalog [cross-indexed with active contracts and agreed to pricing], punch-outs, GPOs, and third party marketplace support) will deliver an ROI the DAY you start using them.

So get them … and use them!

2025 Is Just Another Year … But Is It All Doom and Gloom? Part 2 (Real Tech!)

As per our first instalment, it all depends on your point of view and whether you are willing to look beyond the hype, buckle down, and get the real job done.

For instance, just the following five technologies will eliminate 95% or more of your tactical sourcing, procurement, and supplier monitoring work — and all you have to do is find them, properly implement them, and use them. Let’s talk about them briefly.

Real DIY Analytics

The ability to analyze the data you want, when you want, how you want, enriched and augmented using the auxiliary data you want … and not in predefined dash-boards or hidden “AI Agents” which may, or may not, do the analysis you want (and need) … cannot be underestimated! Real value comes from ad-hoc analysis and investigating hunches, abnormalities, and trend changes when you discover them; not days, weeks, or months later when the “cube” has been refreshed, and it might be too late to correct a problem or capture an opportunity!

Remember, this is not 2005, this is 2025, and there are at least half a dozen great DIY (spend) analysis solutions that will do most of what you want, for a price tag that is a fraction of what you might expect, and if you are okay with full DIY, some of these start at a price you can put on a P-Card. For example, Spendata Classic (which can handle data sets up to 5 Million Rows) can be obtained for $699 a year, and Enterprise, which can handle data sets up to 15 Million records, which comes with unlimited use for 5 users (and view licenses for more), and some consulting and setup, starts at an amount that will surprise you. (You can still put it on a P-Card if you pay monthly.) And there is literally nothing you can’t do in it if you’re willing to apply a little elbow grease. It truly is The Power Tool for the Power Analyst.

(Strategic Sourcing Decision / Supply Chain Network) Optimization

Yes, it’s math. But you know what? Math works! And when you use deterministic math, it’s 100% accurate, every time! And it’s one of only two technologies in S2P+ that was been proven (by multiple analyst firms) to repeatedly identify 10%+ savings year-over-year (but since this was pre-COVID and pre- the 47th, we need to amend this finding to adjust for inflation and tariffs). And as an FYI, the other technology was NOT AI. (It was proper DIY spend analysis. Only Human Intelligence can intuit where to look for previously unidentified opportunities, the best AI can do is just follow a script and run standard analysis. Furthermore, the thing about spend analysis is that an analysis that identifies an opportunity only helps you ONCE — once you capture the opportunity, the analysis is useless. You need to do a new, and different, one.)

Rule Based Automation

When you think about most tasks across Source to Pay, most of them are just execution of simple, easily defined processes — most of which don’t require much (if any) intelligence and, thus, don’t need AI (and shouldn’t use an unpredictable AI agent when you can encode a process that gets it right, guaranteed, every single time. (Plus, the way you want to source, buy, pay, track, manage, etc. is probably a little bit different than your peers, and who knows how the AI Agent would do it for you. You certainly don’t!)

With rule based automation, you can easily execute an entire sourcing event in the background all the way to award if you like. It can run auctions, it can run multi-round RFPs with detailed feedback (it’s all calculations, response comparisons, and decisions on what data you want to share and how blinded you want it), it can run analyses and optimizations, it can calculate recommended award decisions subject to the constraints and goals that matter to you, present that to you for acceptance, or, if it’s a simple winner take all or top 2 situation, create the award automatically, send it out, get supplier acceptance, assemble the contract, and send it for e-Signature. You don’t need Agentric/Gen-AI, just tech we’ve had for over a decade!

Machine Learning

Now, when it comes to Enterprise Master Data Management and Administration (E-MDMA) and Invoice Processing, it can be quite a lot of work to keep up with the mapping, cleansing, and enrichment rules, and you don’t want to have to manually define all the new rules every time a new data element appears or a new invoice format arrives, especially if the system can auto-detect/”guess” 90% of the time through rule re-use and generalization. With machine learning, the system can keep track of your corrections, mathematically extract models, and adjust it’s rules to handle the new mapping again automatically as well as improve its suggestion logic when it doesn’t know what to do — increasing the chance that you just have to “accept” a new rule vs. defining it from scratch. (Unlike Gen-AI which just tries to find similar patterns somewhere to present you with something that may or may not have any correlation to your business and even reality!) And we’ve had great non-(pure-)Neural Network machine learning that works great with enough data for decades! Predictive analytics was making huge progress late last decade before this Gen-AI BS took over and could have helped Procurement departments automate 90%+ of what they wanted to automate with just a bit more development and effort by the leading vendors — it just required a bit more time, money, and focus. (Gen-AI has set us back a decade!)

Analytics Backed Augmented Intelligence

We don’t need machines to make decisions for us (especially when they can’t think, or even reason), we need machines to do calculations for us that help us make the right decision quickly and effectively. We need the machine to automatically identify and retrieve all of the relevant data, do all the relevant situational and market analysis, do all the predictive trend analysis, identify all of the typical responses with respect to the situation, predict the likely success of each, and present us with a set of ordered recommendations, complete with the calculations and supporting analysis, so we can pick one or realize that the machine didn’t/couldn’t know about a recent event or a human factor and that none of the responses are right (and that only we could craft one, with full information on the situation). The machine may not think, but the thunking it can do far exceeds our computational ability (billions of computations a second, all flawless), and that’s EXACTLY what we should be using the machine for.

If we give up on this Artificial Intelligence BS (even if the current models are right, machines need to be 100 Million times more powerful for it to even “mimic” human intelligence. That’s not happening any time soon) and instead just give all the machines all the (boring) grunt work, leaving us free to do what they can’t (strategy and relationships). If we do so, we can be at least 10 times as productive as we are now and deliver on the promises Gen-AI / Agentric AI / AGI never will, and do so at a small fraction of the cost. And oh, we have that tech today … we just need to deploy and integrate it properly!

And this is just the beginning of what you can do when you look beyond the hype and use your Human Intelligence [HI!] to cut through all the BS.

2025 Is Just Another Year … But Is It All Doom and Gloom? Part 1 (Find Out!)

So now that I’ve myth-busted all the trends and predictions, told you yet again that AI won’t save you, told you that all the upbeat “influencers” are just dreaming (and should get back to reality and spend a few more years, or decades, in the trenches), that things aren’t going to rapidly and magically change, and popped all of your bubbles of joy (because they were all fake), what should you do? Should you just crawl back to the dungeon in the Tower of Spend that they’ve locked you in?

No. Just because the hype is all fake, the talent is scarce, the budget isn’t what you hoped, the risks are worsening, and your stress levels are at an all time high, that doesn’t mean all is lost, that all tech is fake, that you can’t find talent, that you can’t do something with the budget, or that you can’t manage the worst of the risks.

It just means that you have to

  • look beyond the hype,
  • identify talent outside the norms and do more with less,
  • realize that not all solutions are overpriced or unaffordable,
  • need to identify which supply disruptions will cripple you and which risks are most likely,
  • keep calm and carry on,
  • roll up your sleeves, and
  • be ready to use your Human Intelligence (HI!).

Look Beyond the Hype.

As we’ve told you time and time again.

  • AI won’t save you
  • Gen-AI won’t help you do anything that is not essentially (large) document (collection) summarization
  • You can’t turn it all over to the machine

This doesn’t mean that

  • you can’t use tech to do most of the boring, tactical, drudgery that you are doing now,
  • you can’t use automation to improve your productivity, or that
  • you can’t use AI to improve your decisions and outcomes.

It just means that you can’t expect that these solutions are the magical big read easy button silver bullet solutions to all your problems that the vendors are promising, regardless of what fancy words they use. (Always remember that AI really stands for Artificial Idiocy and you will do so much better in tech selection, especially when Gen-AI is involved, because hallucinations aren’t a feature, they are a function of the underlying model!)

The reality is that if you stop looking for Artificial Intelligence, which doesn’t exist (and definitely don’t fall for AGI), and start looking for Augmented Intelligence, then, if you are willing to look hard, you can find some really good solutions. As we pointed out in our recent article on You Don’t Need Gen-AI to Revolutionize Procurement and Supply Chain Management — Classic Analytics, Optimization, and Machine Learning You have Been Ignoring for Two Decades Will Do Just Fine!, if you pick the right technology for the task, you can get great results.

For instance, just five technologies will eliminate 95% or more of your tactical sourcing, procurement, and supplier monitoring work. In our next instalment, we’ll talk about what they are and how they will change your life!