Category Archives: Market Intelligence

Hansen’s Models are a Great Addition to the Pool of Analyst Offerings …

… but they still don’t solve your solution selection problem end to end. As per my successful vendor selection, Assisted Solution Selection is a Seven Stair Methodology, and many of those steps aren’t covered.

Backing up, Hansen just launched his new Hansen Procurement site where he centralizes his three new offerings around Organizational Maturity, Vendor Fit Measurement, and Strategy — all of which are sorely needed in our space as the consultancies and analyst firms don’t really address this (or at least don’t address these aspects to the level they need to be addressed to flip the script and turn the 80%+ chance of failure with every new technology project into an 80%+ chance of success).

The best way to see this is to outline the steps of a solution selection project, define what they are, and indicate where various analyst and consultancy offerings come into play.

Step Goal Offerings
Organization Maturity Determine if the Organization is Ready for Process Change that will Involve New Tech Hansen Phase 0 Readiness Assessment
Actual Need Identification Expert review of current processes and problems to identify real process and automation needs, not parroted buzzword descriptions from non-expert executives. Any Niche Consultancy or Expert Advisory Firm Engagement
Holistic Solution Assessment Translation of the need to actual process improvements, platform and automation needs, and service requirements. Any Niche Consultancy or Expert Advisory Firm Engagement
Vendor Pool Selection Starting vendor pool where the vendors meet the minimum platform, automation, and service requirements specified. Spend Matters Tech (only) Match &
Hansen Fit Score Vendor Assessment (Actual Performance)
Vendor Assessment Process RFX cycle management, response and demo analysis, and overall vendor suitability for the client to find the best match. Any Niche Consultancy or Expert Advisory Firm Engagement
Project Assurance Guidance on implementation plan creation, project monitoring, and vendor and partner management with a focus on client success, not the vendor or implementation partner! Engagement with select niche consultants and experts who understand both modern platforms and process requirements of Procurement and Supply Chain.
Strategic Post-Implementation Training, Monitoring, and Advisory A successful implementation does not guarantee success -— that requires adoption, continued utilization, and results. Engagement with select niche consultants and experts who understand both modern platforms and process requirements of Procurement and Supply Chain and why adoption is critical.

As you can see, with the Hansen Models, you finally have a way to judge your organizational maturity and readiness for a new tech-based solution before you start done a path you aren’t ready for (as that always ends in failure), and you finally have a way to determine a potential vendor’s ability to support you in achieving your goals in addition to whether or not the technical core is up to the challenge (which you didn’t have until Spend Matters introduced Solution Map, which powers their Tech Match).

These are key additions because without them,

  1. it’s almost impossible to judge organizational readiness
    you can’t bring an expert in, do a few interviews, and reach a conclusion because you have nothing to compare against (and, moreover, you need scale … at least 30 to 50 related, relevant, projects for any level of confidence in your assessment)
  2. it’s hard to zero in on the best vendors for a selection
    as the best tech fits from both a capability AND a vendor support perspective

The Strategy offering from niche professionals who understand where the organization actually is from a maturity perspective is a nice touch, as they can create more appropriate plans for you more efficiently, but other niche firms could also offer you the same level of strategic advice if they ran the models from Hansen and Spend Matters — although it might take them longer and cost you more depending on their change management and transformation chops vs. Hansen’s chops.

But, as we said above, it’s not end to end, and you’ll still have to do a lot of manual work to get from beginning to end, and possibly need a lot of guidance. But it’s getting you a step (or two) closer to a good assisted solution selection methodology in practice.

Today is the One Day Procurement Doesn’t Have to Worry About Purchasing Software and Services …

… because vendors try to make a fool of them every day of the year.

As per our recent 3-part series on Now is NOT a Good Time To Buy (1, 2, and 3), vendors across the board are trying to overcharge you on a daily basis, by as much as 900% of the software’s actual value.

Services vendors are constantly trying to push you towards the most expensive offerings (that give them the greatest kickbacks, sorry, partner commissions), upsell you on as many modules (that you don’t need) as possible, drag out the implementation (which they know will be easy because they know you’re not organizationally ready to support an implementation because they didn’t prepare you because you didn’t ask), insist on extraneous integrations using custom connectors, and then up-sell you on training for an overly complex system you weren’t ready for.

Then there are GPOs who are claiming they can save you dollars you can’t save on your own, and that you should hand over a whole host of categories to them for an annual six figure access fee and a slice of every transaction, even though you could do just as good on your own managing the larger categories they want to hand over (by the time you factor in the transaction fee and the amortized GPO access fee) and handing the rest over to low cost Amazon Business.

Then there are the marketplaces you need to use for your tail spend that try to convince you to pay preferred access fees, priority order processing fees, expedited shipping fees (for carriers they control), etc. All extra costs for non-priority goods and MRO.

And, of course, when the sales person at the supplier thinks that you don’t have any other immediate options, they come up with fees you never heard of in order to guarantee that order.

In other words, every vendor and supplier is trying to make a fool out of you every day. There’s nothing else they can try to pull on April Fools day that they haven’t already. Multiple times.

In other words, we’re the one profession that doesn’t have to worry about being an April fool, as we deal with tricksters, cons, and frauds every other day of the year.

Now is NOT A Great Time to Buy (Part 3)

Standalone “Intake to Nowhere”, “Classic Onboarding and Supplier Management”, “Predictive” Analytics, “Contract” AI, “Agentic” AI or Classic Mega-Suites … until 2029

Yesterday we reminded you that while you need intake and orchestration, you need supplier intelligence, you need predictive analytics, you need AI-based contract analytics, and you need “Agentic” AI that executes (but does not make) decisions, you should not buy it standalone, at least not now, and you definitely shouldn’t buy a classic mega suite.

While all of the solutions we have tackled so far are currently over-priced, Agentic AI, which is the new hype, is the most over priced offering of them all, especially with the consistent over-promising by these new generation vendors that are promising BS “AI Employees” while delivering task automation that is reliable as a chocolate teapot where consistent, dependable, execution is concerned. Now, some of these vendors will figure out that you need constrained, double guard-railed, multi-agent systems with human monitoring and exception intervention and eventually deliver reliable augmented intelligence systems that make an average employee super human, and they will be worth it, most of these vendors will simply try to out-prompt each other through custom clod and chat, j’ai pété wrappers, cr@p out at about 80% to 95% reliability depending on the task, never be trust worthy, and never be worth it. Since these just started to hit the big time, with ridiculous over-funding, in the past year or two, it will be three more years before the dust truly settles and 2029 before you want to make any long term bets.

Plus, if you know the real history of AI, which is probably older than your grandfather FYI (with the first algorithm to be awarded the title developed 70 years ago), you know that it’s usually close to two decades before a new algorithm is mature enough, and understood enough, with real, solid, mathematical measures of reliability, for mass, unmonitored, industrial use. And typically at least a decade before it’s ready for leaders to apply it in industry for monitored, target, use. The first LLM hit the scene in 2018. That means 2029 is also the year it will finally start to be reliable for a certain (but small) set of tasks in certain (but a small set of) domains. It will still hallucinate more than an LSD loving dead-head, but by then we’ll have much better detection methodologies and confidence measurements and will actually be able to trust it when the results get through the multi-layered security gates that we’ll finally be able to build with more understanding.

And yes, as we’ve said twice already, you need this tech. But buying “best of breed” will only “bleed your cash in the best way possible” with little measurable return.

But don’t return to a “classic mega-suite”. These are now more over-priced than ever. First of all, as we’ve discussed many times on this site, unless you are a Fortune 1000/Global 3000 multi-national with extensive, and complex, source-to-pay needs, you don’t need to pay Millions of Dollars a year for a suite when an 80% mid-market solution for 250K a year will do the trick. (See our piece on how much should you outlay for ADVANCED Source to Pay.)

Not only do most organizations only have a few categories where advanced technologies are needed, and usually only in one or two of the modules the mega-suite sells, but most of their categories are so straightforward that even BoB mid-market solutions present not just an 80%+, but a 90%+, solution. Plus, modern ARPA and appropriately focussed Agentic solutions are allowing mid-sized organizations to cobble together “good enough” solutions from low-cost 80% point solutions for 10% of the cost of a mega suite that gets them started on their journey, allowing them to upgrade to better solutions as they need, and only as they need.

This is putting severe cost pressure on the mega-suites, which are going to have to admit that most of their solutions, workflow, and UIs are over a decade old and not worth the premium they once charged. For organizations that truly need these solutions, from vendors which aren’t aggressively updating their solutions (due to these vendors being purchased by PE firms at too high a valuation and, thus, being forced to cost cut to meet ridiculous sales targets), if they wait a year or two, these will soon be priced at what they’re worth, and you’ll get an annual license for less than half of what they are charging today and get all the functionality you need to boot!

So, at the end of the day, while you need a solid Procurement solution that comes with a modern intake front-end, has orchestration at the core, provides you supplier intelligence, integrates the analytics you need, helps you with your contracts and their processes (to the extent you actually need that help), and allows for adaptive robotic process automation for all your well defined tasks (and provides the data foundation for “Agentic” AI if you have valid applications where such technology will actually bring value), you don’t need to overpay for it. And you definitely don’t need to pay the double to quadruple price tags that current mega-suites are charging.

But if you can find what you need, at a fair price tag, and you buy that, you buy real value that will appreciate with time because it will do what you need it to do, at a fair price, and that’s the only way you save time and money with ProcureTech. Getting what you need, when you need it, at a fair price point. You know, classic Procurement!

Remember that.

Now is NOT A Great Time to Buy (Part 2)

Standalone “Intake to Nowhere”, “Classic Onboarding and Supplier Management”, “Predictive” Analytics, “Contract” AI, “Agentic” AI or Classic Mega-Suites … until 2029

Yesterday we told you that while you need intake and orchestration, you need supplier intelligence, you need predictive analytics, you need AI-based contract analytics, and you need “Agentic” AI that executes (but does not make) decisions, you should not buy it standalone, at least not now, and you definitely shouldn’t buy a classic mega-suite.

While analytics platforms have been traditionally scarce, they’ve been popping up faster than bluebonnets in spring, faster than the weeds in unplanted fields, and faster than Starbucks on an empty corner in Y2K. This is creating severe downward price pressure as well as diluting the average actual functionality as many of these are built on third party white-labelled platforms and, even worse, wrappers on third-party LLMs that are great at conversation, not so great at analytics, and entirely dependent on these third party platforms where accuracy can change overnight on the same prompt, models can change with zero notice, and token pricing can skyrocket with no notice.

Even worse, some of these don’t work reliably because they depend on experimental LLM/AGI models, which are horrendously unreliable at math, and they will inevitably fail. That’s why you should be careful with what you buy from the “new standalone analytics startup” category — many have no real functionality (and won’t last very long because of it) and those with only average run-of-the-mill functionality will soon be available for dimes relative to the dollars they are trying to bill you for today. If you need a solution, get one that was available on the market by 2022 at the latest, as the current generation of LLM/AGI/wrapper solutions started to spring up about 3 years ago.

With regards to contract AI, this has been emerging for quite some time, but the current generation of LLM-powered plays that have been multiplying faster than cane toads in Australia started spiralling out of control about 2 years ago when the proclamations started to be made that your corporate future would be human lawyer free.

After all, clod and chat, j’ai pété can review a contract, spit out a summary, and (purportedly) tell you if any clauses are missing in a matter of seconds. Also, if you give it enough (historical) contracts and a few instructions, it can also draft a contract for you in seconds, even if you need a hundred page monstrosity. Who needs a lawyer?

Well, you. These are not infallible, and they make mistakes all the time. Often, they are minor, and easily fixed by a contract or legal expert with a quick review, but sometimes they aren’t so minor. Sometimes the omissions or clause errors are so major that it takes a lawyer longer to rewrite than if they just had their paralegal assemble the draft by hand and they dotted the i’s and crossed the t’s.

In other words, since you get results that are just as good using your own low-cost LLM subscription, it’s not worth a large price tag for a “Contract AI” that just wraps someone else’s tech. Especially when it’s going to get a lot cheaper and have no value unless embedded in the sourcing and supplier management applications you use everyday where all of the embedded supplier and agreement data need to complete the contract is embedded in the application. Wait a year or two and you’ll get it for a dime on today’s dollar.

To be continued …

Now is NOT A Great Time to Buy (Part 1)

Standalone “Intake to Nowhere”, “Classic Onboarding and Supplier Management”, “Predictive” Analytics, “Contract” AI, “Agentic” AI or Classic Mega-Suites … until 2029

Yes you need intake and orchestration.

Yes you need supplier management.

Yes you need predictive analytics.

Yes you need AI-based contract analytics.

And, yes, you definitely need “Agentic” AI that executes (but does not make) decisions.

And if you’re a (mid) mid-market or larger, you need a suite.

But you should not buy any of these products, at least not now.

Why?

The majority of intake and orchestration platforms, and especially the ones that have raised nine figure VC (i.e. 100M or more), are overpriced and under featured. Modern intake and orchestration that modernizes interfaces, simplifies workflows, optimizes clicks, and makes process adherence easier than doing it any other way is valuable, but not that valuable. It’s essentially better middleware 3.0 for the web, and very easy to replicate. There might only be a few players now, relatively speaking, but you’re about to see a slew of these players who literally do nothing but put very nice lipstick on a big fat prize-winning pig (who’s not happy about it), which is a lot easier to do than raising the prize-winning pig from a piglet to a prize winner. At the end of the day, you need actual functionality, and that’s where the real value lies. (And today, that means shilling out for a classic mega-suite to layer the fancy new intake platform on top of, which costs you more, not less.)

As competition heats up, and technology advances, this will be the easiest, cheapest, play and you’ll soon find out that what the big players claim is worth 1M is only worth 100K to 250K, and you still need to go spend that 1M+ on traditional platforms that have deep functionality. So either buy a platform with real functionality with orchestration built in, or wait another year or two. It’s gonna get cheaper and better for standalone I2O. The market has not yet been zipped up.

Supplier Management is very important, but the vast majority of the one hundred plus (yes, that’s 100+) solutions on the market — be they best-of-breed, suite-modules, or hybrid data/contract/content management solutions with a supplier focus — are no longer up to the task. As per our recent post on supplier management must be continuous and proactive throughout the supply chain, these classic point-in-time solutions are no longer up to the challenge of modern supplier management as they can’t even detect changes in supplier behaviour in real-time that are indicative of emerging risks, yet alone supply chain events that are going to seriously impact supplier behaviour in short order.

As a result, they aren’t worth very much. Moreover, if you look at what classic onboarding applications do, they collect data that they force the supplier to enter during the onboarding process — data that, for the most part, is publicly available on the supplier’s web site, third party registries, and other (internal) enterprise systems — data that could easily be consolidated and pre-filled by modern RPA / Agentic applications that would not only allow a supplier to “onboard” in a fraction of the time by pre-gathering all of the fields. In other words, modern (A)RPA and Agentic data gathering applications do the work of classic onboarding, and with their prolific propagation, do it cheaper and put serious downward cost pressure on these classic applications. Moreover, these next generation solutions, which are dropping in price as well as they are becoming a dime a dozen, can continuously monitor these data sources, detect data changes, and (queue) update(s) in real time. Plus, they can accept feeds from supply chain systems and correlate events that might be meaningful.

So, if you’re still in the situation that can survive off of a last generation solution, wait a year or so, and get it for pennies on today’s dollar. But if you can’t wait, make sure you get a modern solution that can monitor supplier and related supply chain changes — it won’t cost more, and if you don’t lock into a long-term subscription, you’ll be able to keep costs way down on renewal (or easily switch to another platform with the same functionality for a lower cost in a year or two).

To be continued …