Category Archives: Market Intelligence

In ProcureTech, Stop Caring What Gartner, Forrester, or IDC Thinks!

I shouldn’t have to address this again, but every year multiple vendors reach out and ask how to get on these vendors maps because they believe it’s the only way to get more market visibility and/or be selected by certain customers, including you. It’s not the only way to get visibility and if a vendor can’t convince a potential customer from thinking that only map companies are good, I’ll tell them this right now — that’s not a customer they want (because that vendor will be out on the renewal with whatever vendor overtakes them in the map when the CPO changes in 3 years, because companies without vision to look beyond a meaningless map don’t keep real talent, and only real talent will identify and select the best solution and ensure that solution is kept over time).

But I digress — this post is about you, the potential customer, and why you need to STOP caring what Gartner, Forrester, or IDC thinks.

First of all, we’ve said it before, and we’ll say it again: It’s NOT the Analyst Firm. It’s the Analyst!.

In addition to all of the skillsets and education that an analyst needs to have to get it right, which we covered in detail in that post, the analyst needs a lot of relevant experience, and history in the ProcureTech space, to make sense of the ProcureTech world today. Ask yourself: how many of the analysts with the right education have at least 10 years in our space? The answer is very few. How many have 20 years in (independent) analyst roles? You can count them on your fingers. I know of myself, Jon Hansen, Pierre Mitchell, and Chris Sawchuk with 20 years of (independent) analyst experience in our space and a deep technical (STEM) education. Everyone else who started covering this space day in, day out two decades ago has moved on or retired. Now, of these analysts, how many have also built actual solutions in the ProcureTech space, connecting the dots between the education, theory, and practice? Two of us — myself and Jon Hansen. (But we should note that Pierre and Chris spent part of their careers on solution advisory consulting and implementation guidance, and have deep knowledge about the implementation and integration requirements, which is also very unique and useful in technology selection.)

Now remember the second point: Vendors Have Lured Big Analyst Firms Astray and that you’re not getting a map of the best solutions, but the best solutions from the analyst firm’s pool of vendor sponsors and research subscribers, where the reality is that only the big, established, cash-rich companies can afford the high-priced subscriptions that keep them in front of the overworked analysts who have to spend over half of their time taking inquiries or keeping high paying subscription customers happy. (Whereas analysts at smaller firms or independents get to focus on studying and understanding the solutions, not general inquiries or whether or not the contract [or pricing model] is good.)

This means that these big firm analysts are not spending a lot of time, if any, looking at the up-and-coming mid-sized companies that have not only been around long enough to develop mature enterprise solutions, but solutions that are more modern, more powerful, more usable, and more intelligent (with embedded analytics, RPA, and the right AI for the task at hand), and possibly (much) better for you. Moreover, if the enterprise is a mid-market company, or able to go with a best-of-breed as a bolt-on to their enterprise ProcureTech platform, they’ll never know about the majority of these solutions (as only the overfunded startups will have the money to get the big analyst firm attention, and these vendors often have more financial stability problems than the smaller vendors who are bootstrapping or taking minimal funding and actually have stable, happy, paying customers keeping them afloat).

Third, and most important, it’s not the best rated solution, it’s the best solution for your organization. Not only is it the case that this solution is very likely not on a map of only 20 companies (when there might be 100 companies that offer that solution), but it might also be the case that it is the lowest ranked solution on those maps — especially when these maps tend to rate solutions on a lot of subjective factors that match what the analyst thinks are the most relevant for an average organization, whereas you are a specific organization which has a specific set of relevant factors that you care about, with specific requirements for those factors. The more divergence between your factors and the analysts’, and your scale and theirs, the worse the map is for your needs, and the worse the solution you select will be.

The only maps you should care about are those that rank solutions solely on the tech capabilities and/or the customer rankings. But only so far as potential solution identification, not selection. Maps that concentrate on pure tech (like Spend Matters Solution Map) allow you to identify vendors that have the tech foundations, giving you a starting pool, but don’t allow you to identify vendors that have a solution — because a solution is tech and appropriate process support and integration capability and support and culture and whatever else transforms another piece of potential shelfware into a solution that will be used daily by your employees.

Note that we used the word “potential” for a reason. No map (including Spend Matters) is complete, so you will need to look at multiple sources (like ProcurementSoftware.site and the upcoming Art of Procurement ProcureTech 100) to put together a complete list of vendors to consider. Then you will have to cross reference with real analyst vendor write-ups (which can include the hundreds of write-ups here on this site if one or more of your potential finalists are included) to whittle down that list to the best starting set for your best practice technology RFP (of which we have a lot of advice on how to write that on this site as well).

At the end of the day, it’s about what solution will work for you, not about which solution is on which map!

Don’t Get Misled By Overly Simplistic Comparisons!

A recent post on LinkedIn on Coupa vs. I-Valua that implies it’s always Coupa vs I-valua or that Coupa is better is missing the point entirely. So much so, that the doctor had to call it out (see the initial LinkedIn response here) because it ends up being very deceptive (even if that wasn’t the intent).

The post made a very simple comparison between Coupa vs. I-Valua in big graphical format that basically said the following:

Coupa I-Valua
1 Billion in Annual Sales, inc. 2006 200 Million in Annual Sales, inc. 2000
Considered Innovation Leader Can Be Customized to Specific Needs
Generally Good Customer References Customers Have Mixed Success

So much wrong with this!

1) Revenue size is in no way indicative of a company’s particular ability to serve YOU. As long as the company is financially stable and has enough support staff for an organization of your size, that’s all you care about. (And it’s obvious they both do since once a company surpasses 100 Million in annual sales, it can serve the vast majority of enterprise clients.)

1b) Neither is time in business relevant once the company has been in business long enough to have a mature solution.

2) “Considered the Innovation Leader” is either opinion, not fact, or bland, marketing BS. By who? The market at large? Well, guess what, in this scenario neither Coupa nor I-valua qualify — Zip is the current darling of ProcureTech. (But don’t go there … please … don’t go there! [Or we’ll have to rip into that assumption too. For now, we’ll be content in reminding you that, despite what Zip claims, there are NO FREE RFPs.] To keep it short and sweet, Zip’s S2P capabilities are still relatively non-existent as it was built as an orchestration platform to connect existing systems and make them work better, and what they offer to plug the gaps you don’t have is not anywhere close to Best in Class.)

3) As Joel was also quick to point out in the comments, good customer references depends upon who you ask (and many of us who have been in the space a long time know that both vendors have very happy customers, some unhappy [former] customers, and customers who are generally satisfied (but wouldn’t go out of their way to give a recommendation). At Spend Matters, where I developed the Source-to-Contract Solution Maps, in the first release, I-valua was top dog and Coupa was average on the customer ratings. As more references poured in, I-valua dropped down to average and Coupa climbed slowly. In other words, both have great customer references, both have average customer references, and both sets of providers have a customer base with mixed success. (And you can’t always blame the company for the success or failure, both sell very advanced solutions and sometimes customers insist on a module they aren’t ready for.)

Furthermore this comparison misses multiple key points that need to be taken into consideration in any comparison, which include, but are definitely not limited to:

4) Simplification is key — and both platforms can simplify extensively! However, the approach is different — Coupa, in simple terms, gives you default configurations that are easy and widely adopted. I-valua built the infinitely customizable platform, and YOU have to work through that process to get it simple. In technical terms, I-valua was built for power users, Coupa for tech novices, but both can be configured to a middle ground.

5) There are more than 2 suites! While Coupa is a finalist in most deals (due to market size), depending on the industry and geography, the final “2” could also include SAP Ariba (yes, still), Jaggaer, GEP, Zycus, Oracle, Corcentric (Determine) or Synertrade, especially in enterprise deals, with another half dozen or so smaller suites emerging in the mid-market. And, for a subset of those deals, Coupa is definitely NOT the best. Sometimes it’s not even close!

5b) While Coupa is undisputedly one of the indirect (sourcing) market leaders, it is still very weak in direct sourcing compared to some of its peers (especially when compared to emerging players built for direct from the ground up). Classically, it had no direct support. The Trade Extensions acquisition gave it support in advanced sourcing and the Llamasoft acquisition gave it direct support in supply chain demand planning, but direct was never at Coupa’s core. For direct industries, it makes a difference. (To be fair, most of Coupa’s peers weren’t built for direct either, but Jaggaer acquired Pool4Tool, I-valua acquired and rebuilt DirectWorks in their platform from the ground up, GEP built NEXXE for supply chain to supplement its weak direct capabilities in SMART, and Synertrade was built from the ground up for direct – one of the few suites that was.)

I could go on, but, with over 666 companies to choose from, it’s never just Coupa vs. someone else, or I-vlaua vs something else. Sometimes neither of them should be in the room. Evaluate the alternatives. And do so after you know your core requirements, as that’s what you need to narrow down to a relevant pool of providers.

And also, you need to consider your sources when you see very simplistic one-side comparisons like these. While there may not be intentional bias, the relative knowledge the author has of different solutions will weight the comparison if the author is not an analyst who has rigorously, and objectively, weighted each platform side by side on its technical merits alone! (Which the doctor did for six years in this case, along with many of the other big names listed above.) (The Spend Matters solution map was a deep technical solution map with over 600 areas of feature/function/process evaluation on the tech axis [and dozens of questions on the customer axis] for a reason. Comparisons are NEVER this easy between suites and sometimes the usual market leader, for your organization, is the default market loser.)

In this situation, the post author’s company does a LOT of Coupa-related platform advisory, the post author has experience with Coupa that predates that in professional CPO or equivalent roles, and is one of the few consultants out there who has a good understanding of the Coupa platform. (And, by the way, there aren’t many of these consultants, especially when you consider that Coupa doesn’t really know Coupa anymore! The only two employees who knew the entire platform end-to-end, that contains over 20 acquisitions over the years, left last year. And the last few years also saw the departure of key personnel from acquisitions that gave them their advanced analytics, optimization, and risk capabilities. As for the doctor, he’s been following Coupa since Procurement Independence Day and consulted for, advised, or did diligence on half their acquisitions over the years. He’s one of the few that probably now knows the core of Coupa better than Coupa, and knows when someone, like the post author, knows a platform well.)

So if you need help identifying the right vendors to consider, and guidance on how you should be comparing them, seek out the niche analyst firms and independent analysts who have been covering the space for over two decades — they’ll give you the right list of vendors to look at, the right factors to consider, and can even help you craft the right RFP. (Unlike the big firms who just publish the same maps with the same vendors who happen to get a ranking that often just happens to be highly correlated to how much they pay the firm. [Remember, vendors have lured big analyst firms astray.])  And when you need help on a shortlist, seek out the consultants who have actually implemented multiple players on that list for their advice.

Forget Best in Class, Hype, or Futurism — If You Want To Improve, Mature!

As you know, and as we’ve written about repeatedly, the hype cycles for orchestration and Gen-AI are in full swing (even though both should be declining, they are both picking up steam, likely due to the ridiculous amount of money spent on marketing — which includes vendors buying analyst studies and reports that focus on areas where they look good).

Consultancies are not only trying to promote and sell you these technologies as a panacea for all your technology ills, but also trying to tell you that it’s what the best-in-class do and, by the way, that if you want to be best-in-class, you have to upgrade all of your processes (with their help) to those that the best-in-class use (whatever that means).

Furthermore, both are trying to tell you what the Future of Procurement is in 2030, 2035, 2040, etc.

And the reality is that NONE of this helps you. Not one bit.

As we have repeatedly pointed out, most of the currently hyped technology is still in experimental/beta stages. This is not technology that will help you mature. In fact, if you are not an industry leader, and mature in your processes, it may actually hold you back because you need to be a mature industry leader with your Procurement organization running smoothly to have the time and experience to properly evaluate these technologies and where they might fit in your organization.

Furthermore, every organization is different. As a result, what is a best practice for one organization may not be a best process for another. In fact, it might not even be relevant. While you will need to improve your processes, and streamline them for digitization, there is no set of fixed processes you can just plug and play and succeed.

And, don’t pardon my French, why the fuck would you care about what Procurement will be like in 5, 10, 15, 25 years. That does NOT solve your problem today. You care about what a better organization would like today and how to get there. That’s it. Just like the journey of a thousand miles begins with a single step (and possibly a single kick in the ass), the path to success is continual improvement, and, simply put, doing better tomorrow than you are doing today.

This means that the key to success is good old maturity levels, current state assessments, and simple step-by-step plans to get from one level to another. Nothing fancy. Nothing tech-centric. And definitely nothing hyped!

While the doctor admits he did get a little tired of the plethora of these maturity maps that appeared in rapid succession in the late 2000s and early 2010s, including the one he did, it was much preferable to today where the dearth of these, and simple advice, is deafening. The help that is desperately needed is not there — replaced by (Gen-AI generated) (Gen-)AI and orchestration hype, not how they can (and cannot) support the solutions you need.

[Plus, let’s not forget that analyst firms and consultancies tend to ignore government regulations and industry compliance (except in country-specific studies), day-to-day pain points (because they aren’t sexy and won’t sell the hype), and, unless they can make a quick-buck (or get a major uptick in eyeballs), changing global conditions that require (temporary) supply chain pivots.]

So, if you truly want to improve, find a maturity model that walks you through the process and knowledge improvements you need to

  1. get to where you should have been when you started Procurement
  2. get to where you should be today
  3. prepare for the next 3 to 5 years (since no one looks beyond that anymore)
  4. slowly build out a foundation that will take you beyond that (without another massive investment)

That’s it. That’s how you make progress. And how you do it without flushing Millions of Dollars down the (Big X) consulting toilet.

Need a starting point? You can still download the classic paper the doctor wrote back in 2012, that was sponsored by BravoSolution (acquired by Jaggaer), on Taking the First Step on Your Next Level Supply Management Journey which describes the levels of maturity from standardization and complexity reduction (which is typically the first step an organization takes on its journey), to operational excellence (which is typically the second step an organization takes on its journey), to strategic business enablement (which is when it typically becomes best in class).

If you do a web search, you will find others from the big consultancies, but this gives you an idea of what to look for in a model that you can build a progress plan on. Where do you start, where will go next, and where do you want to end up. Note that a good model is tech free. Tech should support your growth, not the other way around. (In other words, it’s never Tech-First or AI-First, it’s solution first, and then you identify the right tech.)

And if you need help with a current state assessment, or flushing out a roadmap from one level to the next, or where you are now to standardization and complexity reduction, hire a niche consultancy who will take a no-nonsense approach to get you there at a reasonable cost. (This shouldn’t cost millions of dollars in a transformation project. Depending on your organizational size and complexity, somewhere in the low six figures should typically be enough to get your started, or mid to high five figures if you want to just focus on a few core areas at a time. But definitely NOT seven figures. That comes during the transformation process once you have identified the tech you need, and NOT the tech everyone is trying to shove down the proverbial throat.)

America: Please Get a Plan and Sign Your Trade Deals! FAST!

the doctor stopped reading the daily tariff news about a month ago, because it was too depressing. (Especially since he had already told you that, since you didn’t start preparing years ago, your only real solution was BTCHaaS.) But now it’s unavoidable with the 90 days expiring, few deals done, and “letters” supposed to replace deals. Moreover, the news hasn’t improved any since the rumours in May that the Big Three Automakers were going to scale back and shift global production outside the US. (EEEK!)

These trade wars aren’t helping America. They’re hurting America. Every day more and more American small businesses close their doors. Every day an average lower class or working class American pays more and more taxes on basic necessities that cannot be sourced from within America’s borders. And every time an American Government representative attacks Canada with false claims of hostility, 400% tariffs on US imports, huge trade deficits (which don’t exist, as per yesterday’s post), and so on, more and more Canadians go elbows up and forget about the pain an average American is experiencing and how important it is for Canada and the USA to work together to combat global threats and maintain a strong North America.

Anyway, back to the point, you need to get a plan and sign your trade deals fast because if

  • small businesses continue to fail,
  • the 12% lower class and 31% blue collar working class have to continue to pay 10% to 30% more on food and necessities they need just to survive, then your poverty rate (which is already 11% and quite high for the richest country in the world) is going to explode, and
  • trade partners continue to look elsewhere to trade their products and services

then America is losing out!

It’s important to remember that there are two, and only two, good reasons for tariffs:

  1. Tax Rates in a Consumption-Based Tax Regime. (America, like Canada and most first world countries are Income-Based Tax Regimes.)
  2. Protection of core/critical industries by ensuring third parties can’t dump massive amount of cheaper (and usually inferior) products and services into your country and damage your industries.

In other words, in America, and Canada,

  1. there should ONLY be significant tariffs for products and services that the country is capable of meeting it’s total domestic need for,
  2. there should ONLY be moderate tariffs for products and services where the country is close to, but not yet capable of meeting, the domestic need (so that the remaining need can be met, but outside products and services will only be chosen to meet the gaps)
  3. there should ONLY be low tariffs for products and services that the country can not (come close to) meet(ing) the domestic need for, but where the government has to ensure safety, quality, compliance with laws etc. (e.g. outside food needs to be regularly inspected by the FDA, for example)
  4. there should be essentially no tariffs (beyond minimal inspection/processing fees) for products/services the country cannot produce domestically

Anything else hurts the populace. Also, since American economists didn’t do the math, a Canadian economist did. And the outlook for (sustained) tariffs above 10% is NOT Good! See this article. Or, if you don’t like economics and math, note that it more-or-less reinforces what the doctor said above. Low tariffs (on the majority of products and services) are actually good. They reduce trade deficits (presumably by discouraging dumping) and encourage real GDP growth (as current factories have the chance to maximize production and local markets with some protection), but only to a point! Somewhere between a 5% and 10% tariff rate, any and all benefits from tariffs cease.

So get those deals, and get the tariffs down to the right rate for the category of good or service (and country of origin) in question. Next to nothing for basic foods (like mangos) you don’t produce locally. The 5% to 10% range for raw materials (like aluminum and steel) you can produce of lot of domestically, but not totally meet your need for. 10% for industries that are strong and you need to protect (and grow). But please remember that you can’t build a new factory overnight, and in most modern manufacturing industries, and hi-tech electronics in particular, it takes 5 to 10 years to build and get a factory up and running. In the interim, you have to buy those products elsewhere.

In other words, you need a detailed plan, not just broad goals, reactionary policies, or a belief that if you will it hard enough, it will happen. Just because you want to play baseball, that doesn’t mean the world does. And, unfortunately, the nature of trade is you have to work with your partners (while, and this is key, making sure they work with you — don’t just get agreements for reciprocal trade, encode penalties into those agreements where if they don’t increase their purchasing, the tariff will go up every time the trade deficit fails to decrease by a pre-determined amount. Remember that some countries, like China, like to make broad promises, like they did in your President’s first time, but then fail to follow through).

The last thing Canada wants to see is this come crashing down, which would result in millions of layoffs (outside the tech industry), big manufacturers relocating production to the global market outside of the US, or global partners dumping American holdings or the American dollar as the default currency. It’s important to look at history and remember that while America was globally one of the richest countries the last time tariffs were high in the Gilded Age, the average American was quite poor. Furthermore, the short-lived Progressive Era that followed ended in the Great Depression, and that’s something we never want to see again! Short term trade wars can be a good thing if it leads to a re-stabilization of a drifting global economy, but long term trade wars aren’t good for anyone — and the country that started it in particular.

So please, get your deals, establish a new operating norm, and let everyone get back to work. Thank you!

Apple Demonstrates AI Collapse

Not long ago, Apple released the results of its study of Large Reasoning Models (LRMs) that found that this form of AI faced a “complete accuracy collapse” when presented with highly complex models. See the summary in The Guardian.

We want to bring your attention to the following key statement:

Standard AI models outperformed LRMs in low-complexity tasks while both types of model suffered “complete collapse” with high-complexity tasks.

This point needs to be made crystal clear! As we keep saying, LLMs WERE NOT ready for prime time when they were released (they should never have escaped the basement lab) and they ARE NOT ready for the tasks they are being sold for. Basic reasoning would thus dictate that LRMS, built on this technology, are definitely not ready either. And this study proves it!

It’s always taken us about two decades to get to the point where we have enough understanding of a new type of AI technology, enough experience, enough data, and enough confidence to understand where it is not only commercially viable BUT commercially dependable. And then we need to figure out how to train the appropriate (experts) users on how to spot any false positives, false negatives, and improve the technology as needed.

Just like nine (9) women can’t have a baby in 1 month, billions of dollars can’t speed this up. Like
wisdom, it takes time to develop. Typically, decades!

Moreover, while not saying it, the study is implying a key point that no one is getting: “our models of intelligence are fundamentally wrong“. First of all, we still don’t fully understand how the brain works. Secondly, if you map the compute of any XNN model we’ve devised and map the compute of a human brain in response to a question task, completely different subsets light up, and those will change as tasks become more complex or you’ll see some back and forth. We can understand data, meta-data, meta-meta-data and thus chaos. We can use clues that computers don’t, and can’t, know exist to know context and which of the 7 possible meanings of a word is the intended one. We can learn on shallow data. In contrast, these models stole ALL the data on the internet and still tell us to eat rocks!

This means what this site keep leaning towards — if you want “autonomous agents“, go back to the rules-based RPA we have today, use classic AI tech that works for discrete tasks we understand, link or “orchestrate” them together for more complex tasks, and, if you really think natural language makes software easier and faster to use (for most complex tasks, it doesn’t, but we’ve also reached the point where no one can do design engineering any more it seems), then use LLMs for one of the two things they are good for — faster, usually more accurate, semantic input processing and then system translation of output to natural language — instead of pouring billions upon billions into fundamentally flawed tech to try and fix problems from hallucinations that result from fundamental attributes that can’t be trained out, as this is an utter waste of time, money and resources.