Category Archives: rants

Dangerous Procurement Predictions Part I

If you read my predictions post, you know SI hates predictions posts. It fully despises them because the vast majority of these posts are pure optimistic fantasy and help no one. Why are the posts like this? Because no one wants to hear the sobering reality off of the bat in the new year and the influencers care more about clicks than actually helping you.

But given how dangerous and costly the hopeful fantasy has become, not only did SI swallow its disgust and give you a realistic predictions post, but it’s going to collect and lay bare the most dangerous of the predictions that, even if seemingly innocuous, will lead you astray if you believe them. And now some of the influencers and LinkedIn aficionados are taking up the claims, and the charge, but like many other claims, they are overstated.

Today we tackle the first three, but you can expect this to be the first of many posts as dangerous prediction posts flood your feeds for the rest of the month.

1. The “Great Convergence” Accelerates

The claims of of the ORChestration providers is that all roads lead to them, the convergence will accelerate, and you won’t have to worry about what you need because, as long as you have orchestration, you’ll have it all!

For example, if you want to use the largest orchestration provider in S2P, your are limited to the platforms they have already integrated. The same goes for the second or third largest. Plus, if the providers you want to integrate aren’t reasonably sized Source to Pay providers, good luck expecting the workflow to support them appropriately.

Moreover, they were built to minimally support the existing solutions, not emerging solutions in the Source to Pay and extended Supply Chain Marketplace. In other words, the convergence will continue at a snails pace, but it will never be great!

2. “X” Finally Gets Modern Attention

It doesn’t matter what X is — if X has been needed, but ignored, for the last ten years, it’s NOT going to all of a sudden be addressed this year. For whatever reason, it will continue to be ignored.

Example #1, Cybersecurity.

As per my recent post on breaking down the risks: IP / cyberattacks, the risk of cyberattacks has been high since 2014, a year when 71% of organizations were affected by a successful cyberattack! Ten years later, 70% of small to medium sized businesses are still getting hit by cyberattacks. (Which means that if it was going to get major attention, shouldn’t 2014 have been the year?!?)

Nothing has changed — the reason? Cybersecurity is seen as a cost, not a return. So, when a successful attack results in significant losses, organizations spend on improved cybersecurity, and ignore it until the next significant successful attack hits, and that is the only time they will spend for new systems across the board, and that’s it. That’s why cybersecurity, inside and outside the organization, won’t get any more attention this year than last year.

Example #2, Risk Management.

There’s a big reason it’s been the exact same risks in the state of procurement studies and reports for at least the last five, if not the last ten, years. It’s because, despite the fact that risks keep increasing, no one ever does anything about it … there’s no additional investment in risk management software. Why? Again, it’s seen as a cost and not an investment. And when you’re already paying for insurance, why pay for what, at best, seems like more?

Even though the cost of insurance will soon be unaffordable given that natural disaster and fraud losses are going through the roof, if you can even get insurance at all, risk management solutions are still being ignored by every organization that hasn’t suffered a major loss as a result of a risk-related event. (And who knows if insurance will cover AI losses when AI escapes the vending machine? It’s a question you should definitely be asking!)

Example #3, Direct.

That’s supply chain, right? Right?

Wrong! But that’s the view that the vast majority of Source-to-Pay providers have taken since the beginning. Sure a few big suites picked up a few smaller players that specialized in direct sourcing, but that’s about it from the big players. And there are a few startups here and there, but they’re all overlooked, underfunded, and not getting any traction.

Because it’s hard. Damn hard. And the majority of S2P players don’t want hard. They want easy. They built easy. They sell easy. And that’s all they want to do. (And, often, all they can do!)

We could continue, but you get the point.

3. One of the big legacy S2P suites will go out of business.

This is a prediction straight from the genius of Gary Wright. Only a Dream Weaver would predict this! This has happened exactly once since our space began in the late 1990s, and it wasn’t exactly going out of business, it was a big acquirer deciding the space wasn’t profitable enough and shutting the vendor down. Specifically, it was IBM shutting down Emptoris and shunting all the customers to SAP Ariba in 2017.

Every big provider in this space is controlled by PE who have poured tens, hundreds, or thousands of millions (that’s billions) into the firm. If it starts losing money, and if they think they can’t turn it around, rather than shutting it down, they’ll flip it to another firm at a loss (to recover some investment) who will pick up some fire sale acquisitions, integrate them, update the UX, install a whole new management team, fluff it up, rebrand it, and bring it out with a whole new spin. Like ERPs, Suites never die. Even if they’re twenty years behind the times.

So if a new big player hits the scene, check under the covers, do a bit of research, and dig up those skeletons. PE knows how to make everything old new again, but tech is not like fashion, and you don’t want two decades old SaaS, as that’s just the same old sh!t.

You Want Predictions? You Got Predictions!

Just Remember, You Asked For This!

If you’ve been following SI, you know SI hates prediction posts, because all they end up being is hopeful fantasy because no one wants to hear the sobering reality off the bat in the new year.

But given how dangerous and costly the hopeful fantasy has become, SI is going to swallow its disgust and give you what you want for — a realistic prediction post for 2026.

1) Gen-AI hype will continue for most, if not all, of the year. The market has figured out how to not only maintain the bubble, but blow it bigger than it’s ever been blown before. So despite all the “burst is imminent” predictions, the market, and the US in particular, is going to miraculously maintain, and even grow, the bubble. (As Mr. Stephen Klein has posted multiple times, they’ve got it all figured out!

2) On the flip side, the failure rate from (Gen-)AI-first solutions will remain above 90%. Almost-back-to-back Gen-AI studies in late 2025 by MIT and McKinsey found a 95% and 94% failure rate respectively. This will improve slightly, but based upon other indicators I’ve seen, stay around 92%.

3) I2O won’t save you — especially in direct!. Yes, Joël Collin-Demers, it is true that most of the big players I2O (Intake-to-Orchestrate) players will add “direct” support, but this “support” will basically be limited to BoM (bill-of-material) import and the ability to bulk buy the components on a BoM by BoM basis. And it will be less powerful than leaders like DirectWorks (now Ivalua), Pool4Tool (now Jaggaer), and EffiGo had a decade ago! Direct requires a lot more than bulk-buying a bill of materials. A LOT more!

4) Supply Chain risks (esp. around Wars, Tariffs, and Natural Disasters) will continue to accelerate, as well as losses due to (Cyber)Fraud, Natural Disasters, and Stock-outs, but investments in risk mitigation and management will continue to be minimal.

5) The same lack of investment goes for supplier/third party 360 solutions for proper integrated risk-and-compliance assessments up front during on-boarding. This is becoming more and more critical because even good suppliers can be risky when you dive into the factory locations, shipping lanes, ownership, etc.

6) Talent will continue to be a huge concern, but instead of actually investing in people, companies will continue to invest in “AI automation” in the hopes that they can fill the gap with tech (even though the tech has zero intelligence and is only as good as the real world experience of the techs who code it).

7) The M&A mania will hit a high about mid-year as the PE firms compete for the few remaining solutions with “unicorn” potential while simultaneously scooping up as many BoB assets to fill holes and acquire talent as the fire sales hit fast and furious. (Remember, I’m projecting double to triple the usual failure rate over the next year or so, 10% to 15% as compared to the typical 5%. We ended 2025 close to 6.5%, but after two years of depressed sales and all the (over)funding going to “AI” startups, a lot of good, niche, solutions are going unfunded and unnoticed, rapidly running out of funds, and need to get bought or shut their doors.

8) “Alt Suites” continue to proliferate as mid-market vendors and PE firms try to roll up their point-based vendors / BoBs (Best of Breeds) into a process/alt-function based offering that they feel will give the newly created vendor a unique angle to get attention (and sales).

9) Software-backed services continue to gain momentum as mid-market consultancies fight for limited budgets and large consultancies try to keep costs down, but in the interim, expect more Deloitte-style failures (where they’ve been caught twice publishing AI-generated cr@p as human analyst work — in Australia and Canada) among firms trying to cut costs with Gen AI-based software.

10) The Big Consultancies and Big Analyst Firms won’t help you! They’ll all publish their annual studies, which, as we pointed out in our You Don’t Need to Read Another State of Procurement Study for the Next 5 Years, but 90% of the “results” will be the same as this year, with just a re-ordering of the barriers, concerns, risks, etc. The only differences will be the “risk-du-jour” and “tech-du-jour”, which will likely be a new spin on supply chain risk and Agentic AI, but the conclusions will be “engage them to help you with a tech-du-jour plan that will solve all your problems” but in reality be a “let’s do a massive project to underpin your entire Procurement operation with tech-du-jour that will require a year of process definition of study, a year of implementation, and then years of training to customize the tech to your processes (i.e. train the tech enough so it actually works okay” that will cost you millions (upon millions) of services dollars but not actually deliver any ROI in the short (and even mid) term.

So, now that you finally got a realistic 2026 Procurement predictions post — tell me, how does it make you feel?

CEOs are hugely expensive. Why not automate them?

As per Will Dunn, as published on The New Statesman

Especially when hiring a CEO who doesn’t understand what makes the business profitable loses Billions:

Starbucks Loses 30 Billion

and doesn’t understand what is critical to the company product to the point costs can never be cut no matter how high those costs may look on the spreadsheet because the net result is not only product failure, but grounding/banning of your product and expensive lawsuits that costs Billions:

Boeing lost 11.8 Billion in 2024

After all, if we’re hiring CEOs without any relevant experience, actual business intelligence, or even logic, then why not use Artificial Idiocy? It’s not like the occasional hallucinations will be any worse that an average CEO’s these days (who believes investing Billions on empty promises is a good idea) … and the actual compute costs, even if in the six figures, will still be a tenth (or [much {much}] less) of what a CEO salary and benefit package actually costs!

So if you insist on creating fictional “AI Employees”, why not kick off 2026 by starting with a job that, sadly, Gen-AI agents can actually do?

Here’s why you DO NOT want Agentic Buying and you DEFINITELY DO NOT want AI Employees

buying for you!

An AI Vending Machine lost hundreds of dollars!

Just imagine what AI is gonna lose on your multi-million dollar categories?!

And when you demand a certain savings that’s unachievable, it’s going to find a loss that equals the savings amount, multiply it by -1, and tell you that’s the savings.

< Stanford, Anthropic, Redwood, Meta, etc. studies on negotiation games, competitive scenarios, and goal-seeking behaviours, etc. >

So unless you’re looking to LOSE money …

Stick with classic automation and point-based AI where the automation runs everything for you, does all the verifications and data checks that can be automated, does all the standard analysis for raking and recommendations, and gets rid of 90%+ of the tactical time-consuming work, freeing you up for the manual review, safety checks, and strategic decisions where you, as a human, can check and find obvious supplier misunderstandings, frauds, and bad decisions for the long term because the system does the grunt work and pre-does all the standard analytics, freeing up 80% of your time to do more sourcing, more relationship management (to prevent problems and loss), and more decision making (when it’s hard to make the right decisions on numbers alone or its impossible to satisfy all the goals and choices must be made).

STOP PAYING PROCURETECH/FINTECH ADVISORIES A DOLLAR JUST TO LOSE THREE DOLLARS!

Last week, in our post where we asked if ProcureTech Generated Billions While Practitioners Lost Trillions, we noted three things:

  1. Approximately 1.8 Trillion Dollars (more than the annual GDP of 92% of the countries on Earth) will be wasted this year on Tech-Related Spending
  2. Approximately 600 Billion Dollars will be spent with the big consultancies and analyst firms who do Financial (Technology) and Procurement (Technology) consulting and advisory
  3. That’s three dollars lost for every dollar spent on big consultancy and advisory firms

So how do you stem the bleeding? Especially if you can’t STOP spending mooney on tech advisory because you can’t stop spending money on technology because you can’t survive in today’s digital world without it?

You STOP forking over (high) six and seven figures without a guaranteed return! In other words, unless they save you some coin, then your money they will not purloin!

More specifically, if they are promising outcomes, then (the majority of) their compensation should be 100% dependent on outcomes. If you don’t make bank, then their compensation will tank.

To be even more precise, don’t buy:

  1. any technology platforms where the majority of compensation is tied to successful sourcing events, transactions, etc.
  2. any GPO services unless it’s 100% outcome oriented
  3. any functional outsourcing unless the majority of compensation is tied to ROI

Now, the technology providers and consultancies will push back, steadfastly claiming that their technology and services are worth way more than they are charging, but here’s how you counter:

  1. you will pay a base annual fee for the platform that will cover 150% of their base hosting costs, so they won’t lose, and then a percentage of transactions, identified savings through sourcing events, contract value, etc. where the percentage is calculated such that if you save 100% of their promised savings, they will make 50% more than what you would pay on a fixed cost after negotiation — if they are so confident in their claims, this should be a no-brainer
  2. you will pay a fixed amount on each transaction, calculated based upon the expected savings before you sign the contract, and if they can deliver the savings, you will definitely be using them regularly — and, as with the Tech Provider, you will calculate this so that they win bigger than if you pay them a fixed cost IF they generate a return for you
  3. you will pay a fixed rate per hour that is enough to cover the assigned personnel cost (their salary plus 30% overhead), and any compensation beyond that will be dependent on the department delivering an ROI beyond a certain amount (which is the amount required to cover the basic fee you are paying them); and again, you’ll fix the compensation such that if they deliver 100% or more of what they promise, they will win big too

Now, you’re probably saying the doctor is daft by telling you to offer them 50% more than what you’d have to pay on a fixed cost basis if they deliver, but here’s the reality, without incentive, THEY WILL NOT DELIVER!

There is an 88% technology failure rate across the board, and 94% failure rate if it’s a (Gen-) AI project. The reality is, as we pointed out in our series on how, even if they have good intentions in the beginning, your (technology) vendor will screw you, the vast majority of systems fail to deliver, because, once the contract is signed and you have access to the system, they have zero incentive to do anything else for you.

Similarly, once they have you on a multi-year contract, why should the GPO or consultancy have any incentive to go beyond the minimum? If you want them to continually serve you and look for ways to generate a return for you, make it worth their while. And then you won’t be paying them one dollar just to lose three dollars in return!

This is where you start. Then, you question any consulting contract over 100K to 200K as a mid-market and 1 Million as a large global enterprise. At that point you have to define the value you expect and what gain-share agreement you are going to craft to ensure it.