Category Archives: Market Intelligence

Vendors Have Lured Big Analyst Firms Astray Because Buyers Don’t Understand They Get What They Pay For!

About the same time we asked Why Aren’t ProcureTech Analysts Doing Their Jobs Anymore, THE REVELATOR asked, in a comment stream, how did … the analyst consulting and ProcureTech solution providers lose their way by championing technology-led, equation-based modelling?”.

Which is a fair question as this ties into why we believe many ProcureTech analysts aren’t doing their job anymore. As per our previous post, we believe the firm is the problem (even if the firm doesn’t know it, but in most cases, the firm should), and, more specifically, the primary reason is bad direction.

But let’s get back to THE REVELATOR‘s question. The answer is this:

At one point, the successors to the founders and/or the sales team took the easy way out and switched to vendor sponsorship.

As us grey beards, who have been around since the beginning of ProcureTech, will recall, there was a time buyers paid for research because they understood the value of unbiased research. But, like Project Assurance, that’s a hard sell when a buyer might spend 10K, 50K, or 100K with no guarantee they’ll identify a single viable solution among those covered in a report. Seasoned, well educated, and thoroughly experienced executives will understand the value of risking 10K to 100K on a report or study before committing to a 100K or 1M+ annual investment, because losing 10K is much better than losing 100K or 1M, and can be chalked up as a cost to doing business. But those executives who are uneducated in management and risk and inexperienced, which are many of today’s executives who were put in place because of their affiliation with investors, or a perceived ability to run a business off of balance sheets alone (even though these MBAs are the reason so many high tech companies are struggling and companies like Boeing are facing disaster after disaster — they don’t realize that you can’t run a business you don’t understand and that’s why, in the first Industrial Revolution [and the Gilded Age the US is so desperately trying to bring back], Engineers ran the show, and not over-glorified accountants and lawyers), don’t understand that or the risk of using vendor funded reports to make a decision.

For these successor and sub-par sales people who just weren’t up to the task of the hard sell, when marketing organizations come along and, out of the blue, threw big money at them to sponsor a study, no sales effort required, they jumped on it. More vendors see the success of the first vendors to adopt this approach, follow suit, the money starts flowing in, and the model shifts. Unbiased researchers have to shift their studies to those aspects where the sponsors do well or leave the firm. Moreover, the search for new hires focus on those with less experience or ethics (who can be easily swayed in the direction the big sponsors want). (So before accepting the results of any study, you should be echoing Mr. Klein and asking Who Paid For That Study?)

This means that, over time, instead of an industry leading analyst firm we get a marketing organization that echoes the “technology-led” approach or puts the product, vs. the solution, first.

Moreover, it’s going to stay this way until some big firms step up and say “enough is enough” and stop vendor sponsorships all together and some big clients step up to fund the research. As Mr. Köse keeps saying, you get what you pay for.

Sourcing Innovation stands by it’s statement that the USA is …

… math stupid that it made in it’s post explaining why the lack of adoption of analytics is NOT complicated. the doctor knows it ruffled a few feathers, but it’s not the doctor claiming that, it’s the OECD data (which is available here).

At least the doctor didn’t point out in that post that the USA is effectively failing across the board as it is below average in literacy, numeracy, and adaptive problem solving (and significantly below average in numeracy, as we pointed out in our last article), that there should be no reason for this when the USA is seventh in the world in nominal GDP per capita (beaten only by Iceland*, Singapore, Norway, Switzerland, Ireland, and Luxembourg*, where the * countries are not in the OECD rankings), and that the USA could afford to have the best educated people in the world if it desired (and it could allocate the budget if it desired, considering the percentage it spends on defence is more than twice the global average, and that’s before all of the foreign military aid).

However, he feels it is now very important that he does point this out because too many Americans are heralding the budget cuts to the Federal Department of Education (on the basis that funding should be tied to performance, which is a justifiable goal, but the best way to do that needs to be carefully considered) without a plan instead of insisting that it be restructured to address the serious educational deficiencies or replaced with more state level agencies (where funding is tied to specific focal points and not allowed to be disbursed on whims).

To nail these points home, here is the relevant data:

Literacy

Country Rank Score
Finland 1st 296
Canada 10th 271
Czechia 14th 260
AVERAGE 260
USA 16th 258

(which is a 12 point drop for the USA since the last OECD ranking!)

Numeracy

Country Rank Score
Finland 1st 294
Canada 12th 271
AVERAGE 263
Croatia 21st 254
USA 25th 249

(which is a 7 point drop for the USA since the last OECD ranking)

Adaptive Problem Solving

Country Rank Score
Finland 1st 276
Canada 10th 259
AVERAGE 250
Slovak Republic 19th 247
USA 19th 247

I’m old enough to remember when the US education system was the envy of the world (even though the US has scored in the lower half, and sometimes the bottom, of the FIMS, FISS, and the IEA — which measured the global performance of the primary and secondary education systems across 12 to 20 countries back in the 1960s through 1980s), because, post Sputnik, the US poured money into public education in an attempt to produce the best students in the world to enter post-secondary STEM programs and become the best engineers in the world … and its Universities took prominence as the Universities you wanted to be admitted to (bypassing centuries old Universities in the UK and Europe in popularity).

Now it’s true that the US should have improved substantially based on this investment (which means that there are fundamental issues that have never been addressed), but just saying “it doesn’t work” and attempting to tear it down without a plan to put something better in place is not only unhelpful but sends a message to the world that the US no longer values having the best education system. I’m afraid this will have ripple effects on the popularity of US institutions, which rely a lot on full tuition foreign students to maintain their top-tier quality programs, and lead to further degradation in adult literacy, numeracy, and problem solving skills (which are now barely on par with countries North Americans grew up believing, partially thanks to propaganda, to be significantly below us).

For those of you who not only want your American-based companies to continue to be the best in the world, but also want America to attract global headquarters (or at least regional headquarters) of more multi-nationals, the sincere hope is that you will fix this. In this increasingly unstable global economy (thanks to natural and man-made disasters), the winners will be those with the best educated people who have the skills to use the best tools at their disposal to make the best decisions fast enough to survive. As a result, companies that want to weather the storms should now be more inclined to choose the Nordics, Japan, or Canada (which top the adaptive problem solving list with high literacy and numeracy scores, and don’t have the energy issues Germany is dealing with or the lack of local population that Estonia is dealing with). Now, while that last option is good for the doctor, let’s face it, for the past eigthy years, the market dynamics worked best when the biggest companies were in America and, through mutual trade agreements (NAFTA or USCMA), Canada supported.*

* Although it must be admitted that maybe the time of American dominance with Canadian and Mexican support has, unfortunately, come to an end. Especially since Canada is still “Open” on the Civicus Human Rights Watchlist and not one of the two countries that recently had their score narrowed significantly in the March 2025 update. While research needs to be done on the subject, when you consider that 17 of the top 31 countries are “open” and 11 are “narrowed” in terms of human rights and civic freedoms on the Civicus rating scale, there does seem to be a high correlation between civic freedom and average educational level as only 2 countries are “obstructed” and only 1 country is “repressed”. And while the repressed country of Singapore comes in high at #13 if you take the average across the 3 scores, the two “obstructed” countries come in low at 22 and 26 respectively.)

Gen-AI is Bad for Consulting Firms … But Even Worse For You When the Consulting Firms Blindly Use It!

A recent post on LinkedIn noted how there’s a wave of AI products flooding the consultancy and advisory space and how they are, frankly mediocre, overpriced wrappers on public models with minimum innovation, if any.

This is sad, but true, and it’s not the worst of it. The worst of it is that some of the Big X firms are training tens of thousands of consultants and f6ckw@ds on these tools to generate hundred page pitch decks and three hundred page strategy and implementation guides of standard generic, meaningless, drivel to deliver to you as “highly tailored guidance and expertise from their leading partners with 20 years experience delivering high-value projects” and charge you tens of thousands of dollars for the privilege.

This is especially egregious when you can use free/cheap (and I’m talking put it on your personal credit card cheap because you won’t notice the fee that is less than your monthly coffee charge from the coffee shop) to build the exact same pitches, strategy, and implementation guides from the thousands of freely available documents on the web in a few hours with a few generic prompts over a Sunday morning coffee. (And then, when the coffee kicks in, realize it’s all a load of cr@p and put in the bit bucket, but at least you will know what a load of cr@p looks like in pitch deck, strategy guide, and implementation plan form and will recognize it the next time an overpriced Big X tries to sell it to you for a ridiculous price tag and will have learned something from the exercise.)

Now that there are companies selling overpriced “custom” products to these consultancies, the situation is only getting worse, especially when the “customization” is just a wrapper with some pre-engineered prompts that aren’t well tested, only work at a point in time, don’t really give the consultancies what they need, and sometimes translate mediocre inputs to inputs that are even worse. Moreover, when you consider the price is sometimes a 100X multiple on the products they build on top of, it’s disgusting. Consultancies are paying more for less, and, in return, you are paying even more for even less!

Which makes no sense when the current publicly available LLM tech is being offered cheap (to try and hook you on it, even though, as we’ve repeatedly explained, the tech is not ready for prime time and will never deliver more than a fraction of what they are promising), and new implementations will get a lot cheaper. Just look at how DeepSeek undercuts the cost by a factor of 100 and gets 90% of ChatGPT (as long as you don’t mind exposing all of your secrets to the CCP). LLMs are nothing more than a fancy next-gen “deep learning” Neural Networks that construct responses vs. serving up canned responses (which is why hallucinations and lies are a core function, not an error that can be trained out) which gets us closer (but no cigar) to decent natural language processing (NLP) for the express purpose of the generation of desired outputs from inputs, but not there (and now, in addition to all the false positives and false negatives, we had to deal with, we now get to deal with hallucinations and lies as well). It’s not secret magic, it’s layers and layers of interconnected statistics and probabilities that no human can understand, in rather standard models that any Theoretical CS and Applied Math PhDs can build, and implementations that are better and cheaper are going to keep appearing as time goes on.

This means three things to any consultancy thinking about using these custom “AI” solutions

  • you still have to be even more tech savvy to use them to any degree of effectiveness
  • it’s not “the art of the prompt“, it’s the art of the training (even though they don’t really learn because they are NOT intelligent) because that determines the maximum level of effectiveness you will ever reach with them (and you need to provide them with sufficient correct data, which needs to be in the high gigabytes at a minimum, and, preferably, in the petabytes)
  • you don’t have to worry about when they are right (enough), which will happen between 90% and 95% of the time with proper training and proper prompting, or when they are obviously wrong, which will happen a very low percentage of the time (say 5% to 9%), but when they are oh so wrong but the response is constructed in a way that is oh so convincing that an above average person in intellect and experience wouldn’t know otherwise (that danger zone between obviously wrong and good enough that is likely only 1% to 2% of the time).

Now remember that your consultants aren’t that tech savvy, and you should know right off the bat incorporating and using these is going to be difficult and time consuming. (There’s a reason we are constantly advising you to be very careful about using Big X for tech selection and tech projects, and that’s because, even though they say it is, it’s NOT their forte. They weren’t built on tech, and they don’t have the best talent in tech — that talent goes to the big tech companies who can offer the 500K salaries to leading devs or the wild-west startups that leading devs think are cool.)

You only have so much clean and complete data you can use for training. You can’t just throw in the 1000s of decks you’ve built as you can’t share work you’ve explicitly created and sold to past clients, and the AI won’t anonymize the decks and suggestions (even though you think it will). It won’t know that “Ford” is the name of your client and might think that “Ford Data” is another term for shallow data and copy sections from that custom strategy straight into your pitch deck for General Motors (and chances are your overworked junior consultant won’t catch it when skimming that 200 page deck with only 2 hours to go before the meeting). And we know what happens then … (and it ends with the consultancy not keeping either client).

It will take a lot of analysis to identify those 1% to 2% of cases where it is very, very wrong but so convincingly right that you will miss some. What happens when you do and give your client advice that explodes in their faces? (We’ll let you answer that one.)

And for you as a consumer, if your consultancy is using this Bogus AI tech, it means that:

  • the situation that results from solution delivered might be even worse than the situation you started with (as should be evidenced not just by the tech project failure rate that is approaching 92% but the fact that 42% of projects are being abandoned during implementation!)

A solution designed by Gen-AI is not a solution. A real solution is a solution designed by human intelligence that uses real, augmented intelligence, to research and validate that solution. Remember that if you are going to hire a consultant!

With Suites, What you are Sold Vs. What You Get Vs. What You Need are Three VERY Different Things!

A while back, Dan Gianfreda published a piece on LinkedIn on how what you need is not what you are sold when you buy a a shiny, “all-in-one” procurement platform that is 10X bigger than what you will actually use (on a multi-year contract with a massive implementation that takes months longer than promised and ensures you don’t have the majority of the functionality you need until the contract is almost up), and he was right. But it missed the full picture. The reality is that not only are you sold 10 times more than you will use, but what you will use doesn’t cover what you need, and with a poor selection, might only be one 10th of what you actually need!

In other words, you need to see the full picture:

As outlined in the response post, just because a suite has a module, there’s no guarantee that module is anywhere close to what the organization really needs, especially when the capabilities can vary greatly (and the definitions even more so). Sourcing can be a simple RFX or a multi-staged integrated RFX/Auction platform with embedded strategic sourcing decision optimization. We still see canned reporting modules sold as “modern spend analysis” when they are anything but. And most AI claims are pure BS (or an indication that you should probably run for the hills if that’s the only selling point).

Even if the suite theoretically has the core/must have functionality the organization needs, that’s only meaningful if that functionality is implemented in a way that supports the organizational processes and policies. If approval chains are required, tamper-proof audit logs need to be in place, validated process steps are needed for public sector compliance, and so on — and the suite has none of those, it don’t matter how user friendly, integrated, or “powerful” it is because the organization will NOT be able to use it.

Moreover, the core functionality differs by organizational type and since most platforms only do one of indirect, direct, services, capex projects, or tailspend well, selecting the wrong suite will render it totally useless for the majority of sourcing/procurement projects, which will add insult to injury of the huge cash outlay you agreed to (for an ROI that will never, ever, materialize).

Moreover, as previously indicated, you can NEVER assume that all (or sometimes, even any) of the solution providers will:

  • ask the right questions to understand the challenges
  • do the right due diligence to ensure their solution will solve those challenges
  • be honest about their capabilities (or, outside of the dev team, even understand those capabilities)

because, chances are, as I have indicated many times, everyone in the ecosystem exists to make money off of YOU, but not necessarily to help you. (Especially when too many vendors took too much money and are now under extreme pressures to fulfill ridiculous growth requirements in just a few years or risk massive layoffs, being folded into a bigger player, or getting dropped from the portfolio entirely before going bankrupt.) There’s no time to do it right, just to sell, sell, sell. (Which is why we keep advocating employing an independent consultant to help you with selection, project planning, and project assurance — since their remuneration depends on helping you, not someone else.)

So remember this before you start looking at big suites as there is a good chance you’ll likely be paying 10 times what you should be (based on what you are using) while still only getting 25% of what you actually need in the best case. (And there’s nothing wrong with building your own Best-of-Breed ecosystem, even if you need to add an orchestration player to that mix, if that is what maximizes the return on every dollar spent.)

(Supplier) Diversity is Dead!

Editor’s Note: This is an extended version of a comment that was made in response to an inquiry by THE REVELATOR on LinkedIn about the progression of supplier diversity.

The simple fact of the matter is thus: diversity threatens fascists who want authoritarian dictatorships. This means that as long as far right wing agenda politicians keep getting elected in first world countries (which has been happening more than not over the last decade), not only is DEI (Diversity, Equity, and Inclusion) not going anywhere, but it is going to be rolled back, and done so faster than most policies that came before in countries which equated diversity progress with measurable outcomes.

The sad reality of the situation is that as soon as the board/chief/president of an organization or governmental department concluded that you were not diverse if you did not have x% of whatever minority the board/chief/president thought you should have x% of by time y, and started equating diversity success with measurable outcomes, we went from a situation where “equal opportunity” was replaced with “minority designated role”. And instead of being a further step in the right direction, it was often a step backwards. Under equal opportunity, if two candidates were roughly equal for a role, the role is to go to the minority candidate. And that’s a good thing. However, under “minority designated role”, non-minorities are banned from consideration, and this is not a good thing if there are no qualified minority candidates available for the role. A senior role that should demand a full University degree (Bachelor’s or higher), a decade of experience, and one or more certifications may end up going to someone who just has a 2 year associates degree, only 3 years of work experience (barely relevant to the role), and no certifications as that is the most qualified person who applied.

What many firms fail to take into account when considering diversity mandates is the number of qualified candidates in the minority who are actually in the vicinity of, and who are then actually interested in, and willing to take on, the position. For example, if you were to demand that half of your coding team need to be women, good luck with that when only 25% of STEM graduates in North America are female. (So if you did get 50%, a lot of other companies wouldn’t get any female hires.) Or if you demand that 1/5th of your workforce be hispanic, to mirror the US population distribution, but it’s an in office job in a major city in an expensive neighbourhood where 95% of the local population is white, good luck with that. You might meet your quota, but you know that the vast majority are not going to be qualified for the role.

And DEI didn’t stop there at some organizations and institutions in North America. As soon as people figured out that a DEI program or a particular minority designation could be used to exclude people of certain religion(s) they didn’t like, it went from a tool of inclusion to a tool of subversive discrimination. (So much for equity and inclusion!) Then came the backlash; the labelling of anything even remotely related to DEI, equal opportunity, or humanity as woke; and a full on assault by the fascists and authoritarians.

More specifically, in countries where they have enough power in the government, the authoritarians are dismantling any and all programs they have control over, barring any third party organizations with such policies from doing business with their government, and doing whatever they can to overturn all DEI and Equal Opportunity legislation they can, as far back as they can.

Moreover, given that these far right wing parties are being well funded by donations from the tech bros who spend more time meddling in global politics than running their own ventures, there are not many options for progression of ANY diversity on the global stage.