Category Archives: Market Intelligence

We Finally Know the Source of the AI Buzzword Bullsh!t!

The Agentic Software Service Hyper Optimized Learning Engine custom built for drowning the World Wide Web in soundbite and buzzword marketing bullsh!t centered on AI, or the A.S.S.H.O.L.E. for short! (With fervent thanks to the esteemed Arthur Mesher for delving deep into the depths to uncover the source of this madness!)

Technology Project Failure is at an all-time high, boosted by the recent AI failure rates (which are on the rise as almost half of AI initiatives are being scrapped in process, see CIO Dive), and while the hype should be subsiding (and shifting to the next hype cycle), it’s now hitting us harder and faster in what should be its death throes than any hype cycle that has come before.

The AI marketing onslaught is coming so hard and fast that it’s impossible to imagine how so much new soundbite, buzzword, FOMO, and FUD content can be produced so fast and so overwhelming to the point that it seems humanly impossible. And that’s because it is. It’s not coming from humans, it’s coming from the A.S.S.H.O.L.E.. As we have indicated in our previous posts on Gen-AI LLMs, one of the valid uses for Gen-AI is mass content digestion, search, summarization, and generation.

It appears that one of these systems was customized to ingest all of the initial human-generated AI BS and trained to spew out marketing soundbites, social media posts, articles, and other forms of web content ad nauseum and to continually ingest new content on the subject to create even more content, including AI-generated BS content from other AI systems that tried to copy the original A.S.S.H.O.L.E..

And even though it doesn’t matter, since apparently every LLM can be trained to emulate the original, the only question that remains is, who currently owns the source engine, what LLM was it originally built on, and what LLM is it running on now? This is obviously the industry’s best kept secret. I hope someone who has gotten to the bottom of this will let us know the full story of the A.S.S.H.O.L.E.. Considering the intellectual and financial pain and suffering it has caused, we deserve to know the truth!

For those interested, since I’m sure LinkedIn will disappear Art’s post if it hasn’t already, here’s the original. (And the Gartner rant ain’t half bad either!)

The Lack of Adoption of Analytics is NOT Complicated!

According to THE PROPHET, the reason that we’ve never seen a breakout $100M+ pure-play (spend) analytics vendor is it’s complicated. (Source: LinkedIn)

But the reality is that it’s really not.

First of all, approximately one third of all multi-nationals are headquartered in the US. In other words, one third of global enterprise is based out of the US, where the strategic decisions are made. Let’s say that again, one third!

Secondly, and this is the real explanation, in our age of participation trophies and only focusing on the positive (when there really isn’t any), no one is willing to state the truth, and that is most of the employees responsible for strategic [spend] analysis are just too math stupid.

Analytics, at its core, requires good mathematics skills and, with traditional analytics applications, good computer skills.

However, the US, where many multi-nationals are based, consistently ranks in the lower part of the OECD international rankings and is currently 34th in the PISA [out of 79 scored countries] (with an average numeracy score of 249, below the TOTAL OECD average of 263, with over 1/3 of its adult population at level 1! This means they can’t even do basic arithmetic and problem solving [or calculate a tip FFS, but that does explain why they believed their administration when they lied and said other countries pay the tariffs] — and that’s the average business employee in the US, since anyone with a level 2 on the OECD can likely fake it in a STEM career in the US.

As for THE PROPHET‘s reasons as to why Spend Analysis has consistently underperformed the hype:

  • While 3/4 of solutions have always been reporting in drag, I’ve been highlighting at least a dozen Best of Breed solutions consistently for the past decade. They have existed for the past 20 years, you just had to look (and understand what to look for. But this site did a great job of helping you with that!)
  • Yes, scale came at the cost of dumbing down the UX (for the US market in particular)!
  • Unfortunately there is no faster way to die as a Spend Analysis vendor then to get scooped up by a (mega) suite or a Big X Comsultancy.
  • Actually, the analytics and optimization is not powerful or complex enough in most solutions. Again, the problem is that the vendor didn’t add incremental levels of simplification (i.e. dumbing down) so each user could take advantage of it at their mathematical (in)competency level.

But the real reason, as hinted above, is that employees resisted these advanced spend analytics solutions because they knew they didn’t have the mathematical skills to use them. (Which the US Education System should be blamed for [and why it should be fixed, not dismantled], not the employees, unless those employees went to University and chose not to take math courses to try and make up for the failings of the public education system they were subjected to.)

As for THE PROPHET‘s signals that the times they are a changin’:

  1. Good + Cheap = Dangerous
    Faster? Check! Cheaper? Check! Smarter? Well … Ask Woody!
  2. Analytics is Merging with Execution
    This is key for adoption of analytics — do it when you need it and apply the findings right away.
  3. Intake, Orchestration and Agentic Tech
    I guess I have to say it again!
    ????? ????????????? ?? ???????? ??? ??? ??????? ????!
    When what we really need is a Revenge of the Nerds! (If the USA even has any left!)

However, the real reason that we may finally be entering a new era in analytics is the following:

4. Most companies are trying to stave off bankruptcies as a result of US trade, market, etc. decisions that have already bankrupted many SMEs and they now realize that analytics is a key part of that solution. You can’t optimize spend you don’t understand, or understand the impact of a sudden 145% increase in tariffs if you don’t understand how much you are sourcing from the country in question.

Accept It! You ARE Selecting Obsolete Tech.

But that’s not necessarily a bad thing.

In a recent LinkedIn article, Joel said that digital procurement is like a pie eating contest, and while we’re not sure we agree, he made one valid point:

The system you select is already heading toward obsolescence the moment you go live.

But it’s worse than that!

1) It’s heading toward obsolescence from the minute the implementation starts … you have no idea the technical debt in the systems you are being sold today from the build fast, scale faster, fix it later mentality infused by VCs and most PE firms!

2) It was probably obsolete when you selected it, especially if you chose a vendor who has been leading the same Gartner and Forrester maps for 10 years with no significant changes to their product or platform!

3) Even worse, chances are that the process you digitized makes you outdated anyways and keeps you that way — digitization is the best time for identifying not how things work, but the way they should work to maximize efficiency and minimize risk (and that’s not, as we continually point out, jumping on the Gen AI / Agentric AI bandwagon and being blinded by the hype).

4) Moreover, you really shouldn’t need different channels (i.e. completely different apps) to source, just different workflows and interfaces, but since most providers don’t do more than one category (among indirect, direct, services, capex projects, etc.), you likely need MORE apps. Moreover, few suites have more than one or two modules that are truly best of breed (despite their claims), so if you don’t plan for the constant upgrades and bolts ons … well … you won’t be ready when you have to select and implement one quick, and then you’ll have even more obsolescence than you planned for.

That doesn’t mean that you should give up on modern tech because it’s all obsolete, because it’s not, and the good vendors recognize this and continually update their tech to minimize the obsolescence. It does mean that you need to be very careful when selecting your tech to find a solution that has minimal technical debt, is beyond where you are at today with respect to the processes it supports, and is being continually enhanced by the vendor. If the vendor offers a truly best of breed solution, is beyond where you are today, and has a track record of keeping up with best practices, and best tech, it’s likely a good vendor.

Especially if the tech today is considerably enhanced against the tech it had two to three years ago (which you should be able to determine by looking up old demo videos, articles, independent reviews, etc.).

However, if you can’t tell any difference between the (mega) suite tech being pushed at you today vs. what the (mega) suite tech were advertising five years ago, then you should probably stay away. Far, Far Away.

Everyone In the Procurement Ecosystem Exists For a Reason — But Do You Know Why …

… and more importantly, when you should use them?

Joël Collin-Demers recently commented on a LinkedIn post that

Everyone in the ecosystem exists for a reason. Big consulting and analyst firms are great tools for organizations in particular contexts (e.g. a big firm is a great way to get a lot of smart people deployed on a problem quickly).

The point I’m trying to make is that we tend to over-rely on big consulting and analysts.

And he was correct. Big X consultancies, niche consultancies, implementors/integrators, analyst firms, suite vendors, best of breed vendors, etc. were all started for a reason and continue to exist for a reason. Understanding both of these helps you determine when you should use them, why, and what you should (and should not) expect. In this post on where we asked If You Really Want Success … or Just Say You Do, we made it abundantly clear that Analyst Firms, Big X, Implementors, and even Vendors (beyond a certain point) ultimately don’t care about your success because

Big Analyst Firms (that produce the pay-to-play maps) make money pushing the solutions of the vendors that pay them the most, not on making sure those solutions solve your problems. While there was a time you could always count on the best unbiased advice from an analyst firm, that was long ago. Ever since the first big vendor realized it was faster (and cheaper) to buy influence by sponsoring reports or cutting big research access POs, the end of unbiased recommendations began. (And it’s more your fault than the vendor’s because you came to expect free reports, but no one can work for free, which means the vendors had to pick up the entire cost, which means those reports say what the vendors sponsoring them want said, not what you need to hear.)

Big X need to keep their benches employed addressing your problems, and if a vendor’s solution took care of everything, what else would they do? This doesn’t mean they are going to screw you, but it does mean they are only going to address what you ask them to, that they are going to try to do it with a diamond/platinum/sycophant partner to keep their top-tier consultancy status, and assign the weakest resources they think they can get away with to keep their top tier resources free to top paying clients. Moreover, as we discussed in our article on When Should You Use Big X, the vast majority of Big X did not start out as IT consultancies or Procurement Tech shops and this is still their weakest area (as the “wild west” tech players and boutique consultancies get the majority of best talent), so even if they are doing their best, it’s only so good. (Compared to their core strengths, which, as we said in the latter post, you’d be foolish NOT to take advantage of.) The reality is, many Big X are now mostly body shops who have to keep those junior consultants employed while keeping their big software partners happy. And that’s a difficult balancing act, especially considering their overheads and the luxurious lifestyle these partners have grown accustomed to.

Implementors make money implementing solutions — if that solution solved everything for the next five to ten years, how would they keep their bench employed as well. Now, they are going to make sure it’s implemented to the best of their ability, but since they weren’t hired as a consultancy, they aren’t going to be the ones to tell you when a solution is not the best for a certain task — they are going to do what they are paid to do (so that, when you realize you need another solution in a year and then use the same Big X again to recommend it, they get that contract too).

Vendors need to keep their investors happy, which means securing sales as fast as possible, not ensuring they are the perfect fit and/or outlining where they will fall short. Now, of everyone in the ecosystem, they definitely want you to succeed, but the reality is, they can only spend so much time on you because they took too much money from investors at too high a multiple, aren’t growing at the expected rate, and the management and sales team risk being fired (and the entire company being shut down) if they don’t continually increase the rate they bring on new customers (whether they can reasonably support them or not). It’s all about “what their solution can do for you” and not about “is their solution right for you”.

And so on.

Niche Consultancies are the best IF they do not have preferred vendor partnerships (which require a certain level of business to maintain) as they know they have to perform to get their next contract, but these are few and far between. And even though it is critically important, almost no one does Project Assurance for their ProcureTech project (and then wonders why we have had Two and a Half Decades of Project Failure).

Short story, everyone in the ecosystem exists to make money off of YOU. While that’s not a bad thing IF they provide value (and heck, I’ll happily give you a dollar if I am guaranteed two dollars in return in a reasonable time frame), not all of them do … and those that do are not equal in the value they provide (primarily due to conflicting pressures, not intent). Until you understand that, your returns will be limited.

The important thing to remember is that if you’re just starting your best-in-class Procurement journey, you typically don’t need an end to end suite, and if you’re Procurement maturity is still elementary school, you don’t need a 7-figure mega suite when a low 6-figure mini suite, which can be implemented in 1/4 to 1/6 the time, can get you 80% of potential savings. Especially when this level of savings will take you 3-6 years to realize. Then, when you’re ready (and know how to get the additional ROI the mega-suite can provide), you can upgrade to the seven figure mega-suite in confidence you’ll achieve the same level of ROI. (Instead of being the next ProcureTech disaster. And while you may believe in a beautiful disaster, there is no such thing where tech is involved.)

Follow the Money to Find Future Opportunity — Which Will NOT Be Fully Found With Autonomous Sourcing!

Spend Matters has thrown caution to the wind and followed Gartner’s lead jumping onto the AI Hype Bus (with no steering and no brakes) that is still heading straight for the cliff and are wheeling out webinars on AI faster than a prairie fire with a tailwind. (Needless to say Sourcing Innovation does not think this is a good thing. There are valid uses for AI and automated processing, but fully handing over financial decisions is like wheeling in the Trojan Horse and leaving it unguarded in the server room with unrestricted access to your bank integration.)

Recently, The Maverick advertised yet another Spend Matters webinar on Autonomous and AI Sourcing where he said we should “follow the money”. Which we should, but there are a few things we need to clarify first.

1. No Money Changes Hands In Sourcing

It changes hands in Procurement … and it’s because most companies don’t follow the money after the contract is signed that 30 to 40 cents of negotiated savings never materialize in many companies, which The Maverick should remember from his AMR and Hackett days, as it was laid clear in Mickey North Rizza‘s famous 2009 “Reaching Sourcing Excellence” series, which we know is in his archives.

2. “Speed” is NOT a strategic edge if you don’t get it right!

If you don’t go out with the right strategy, don’t know the current market price, don’t know the reason for the current market price, and don’t have the knowledge to project if the trend is going to continue, stabilize or reverse, going to market is not a good decision … and it’s an even worse decision to automate the sourcing project and secure an award as fast as possible if you don’t know if it’s the best you could have done or the worst you could have done.

3. “Pecunia non olet”, but yet these vendors are asking you to treat it like it does!

They want you to automate spend analysis, sourcing, contracts, purchases, and everything else that involves money by turning over everything to their Agentric AI because, apparently, money stinks and you don’t want to touch it. (But they are quite happy to not only spend yours for you but takes as much of it as they can for their services.)

But here’s what they don’t tell you.

  • AI is NOT Intelligent.
    The level of intelligence in their “AI” is equivalent to the level of intelligence in a carpenter’s hammer. The level of effectiveness is entirely dependent on how skilled the person “training” the system and how skilled the person “using” the system is, just like the effectiveness of a hammer is dependent on how well the carpenter was trained and how experienced he is in it’s use.
  • AI Does Not Know What it Does Not Know.
    If the data is incomplete, the recommendation is very likely incorrect.
  • AI Cannot Do Better than the Best A Human Has Ever Done in Decision Making.
    So, if none of the situations it was trained on led to great results, neither will what it recommends for you.

You need to remember how Gen-AI does its work (or should we say does not work). It is large document search and summarization and chain of compute. Now, the more advanced players are trying to embed knowledge graphs into this, but these are not perfect either. With good training examples, and a very similar situation, the probability it will work well is very good, but it’s still only a probability. As a result, nothing should ever be fully automated where money is concerned. The tools should be used for their recommendations, and if the recommendations are good, and the risk is low, most of the tactical data processing and event management should be automated, but the decisions should ALWAYS be made by a human, who should be involved at every decision point. Even if that decision is verifying the system recommendation. It only takes one miscalculation due to an incomplete data source to project a wrong trend, rush an auction, lock in a price 3X what you are paying now, only for it to fall in a month later when a factory (which went offline temporarily due to a manmade or natural disaster) comes back online and the supply-demand balance returns to normal. And while you may have stocked out for two weeks, those losses will be orders of magnitude less than paying 3X at a contract you have to honour (unless you want to get dragged into court).

Now, if you really want to make money, forget all this Autonomous and Agentric AI BS, look for Augmented Intelligence solutions that make your staff two, three, five, and even ten times more efficient, purchase those, and, remembering that the US infrastructure is crumbling fast (and not going to get renewed under a Republican administration that is more interest in trickle-on economic tax cuts for its billionaires than ensuring you have running water), it’s time to remember how the smart made money in ancient Rome — public bathhouses and latrines. Time to invest in your own desalination facilities and be ready when the public wells run dry. After all, “Pecunia Non Olet“.