Thank you Vladimir Putin!

Thank you Vladimir Putin for saying what needed to be said.

(Open/Gen-) AI is dangerous. Very dangerous! And something needs to be done about it!

Humanity has to consider what is going to happen due to the newest developments in genetics or in AI. One can make an approximate prediction of what will happen. Once mankind felt an existential threat coming from nuclear weapons, all nuclear nations began to come to terms with one another since they realized that negligent use of nuclear weaponry could drive humanity to extinction.

It is impossible to stop research in genetics or AI today, just as it was impossible to stop the use of gunpowder back in the day. But as soon as we realize that the threat comes from unbridled and uncontrolled development of AI, or genetics, or any other fields, the time will come to reach an international agreement on how to regulate these things.

Transcript

I don’t know about you, but with respect to what has been advertised, these are the six variants of Open/Gen-AI the doctor sees:

Gender/Race-Biased: especially in HR; it’s trained on “good resumes”, but, guess what, when those “good resumes” were selected from a pool of hired candidates that have predominantly been white men, guess what the AI looks for?

Hallucinatory: too many stories to track now of AI creating fake summaries on fake articles by fake authors for which it created fake profiles; Lawyers have fall for this multiple times!

Harmful/Hateful: train it on open data which contains hate speech, just like a kid exposed to its first profanity, it mimics … non-stop

Murderous: multiple examples of self-help chat systems literally telling people to kill themselves (and then a few examples of people actually doing this) as well as self-driving systems ignoring the “shadows” of what were people RIGHT in front of them

Sleeper: the newest threat, sleeper behaviour that can go undetected for days, months, or years until a specific date or phrase is entered (in combination); the perfect sleeper agent!

Thieving: not only are these open AI plays generally trained on stolen data, but since all your queries and outputs are directly used (or indirectly influence) the network, they steal your data (even when the designers didn’t set about to do so)

The Prophet‘s 2024 Procurement Prediction Number 8

The Tech Office of the CFO is Coming … Finally A

Yes, it is.

And while The Prophet thinks the naysayers will call him a fool, all the doctor can say is, join the club! There’s lots of room … only a few of us have been correctly calling the future for almost two decades, and all of us who have been have also been called foolish, crazy, and worse. I’d rather be right than popular. At least I’ll be ready for what’s coming …

COVID started a big push into “FinTech” investments as everyone realized that no-travel, and even no offices, meant you needed online/SaaS payment systems, contract systems, financing systems (as you couldn’t walk into a bank), etc. The CFO slowly realized there was more to modern Finance Tech (FinTech) than online spreadsheets. Plus, as they realized they needed visibility into Legal and Procurement, they wanted companion contract, risk, and P2P systems and/or customized interfaces for them.

As a result, we will start to see the rise of Finance suites that, as The Prophet points out, will integrate:

  • FP&A
  • AR & O2C
  • AP
  • Treasury
  • Payments
  • SCF
  • Expense Management
  • Commodity Management
  • Risk
  • Corp Dev / M&A
  • P2P

as well as

  • Contracts
  • Spend Intelligence (with all data/reports updated at least monthly)
  • Inventory Management (with visibility into overhead costs vs. depreciation)

Moreover, as The Prophet has pointed out, each of these areas is very complex. Spend Matters considers AP alone as including the following areas: core AP workflow, dynamic discounting, e-invoicing compliance, fraud detection and prevention, supply chain finance, tax compliance, tax management and working capital management.

When you get into AR/O2C, you then get into PO receipt and tracking, shipment tracking and notification, invoice generation and transmission, invoice receipt acknowledgement, payment receipt, etc.

Expense Management may or may not include P-cards and/or virtual cards, and may or may not include catalogs, travel management, integrated airline or hotel bookings, app integration for auto-expense report generation (snap & go), etc.

Risk breaks down across multiple dimensions across supplier and supply chain risk, and for more information, see the doctor‘s Source-to-Pay series (especially Parts 15 to 20) and the first 9 parts of the doctor‘s Source-to-Pay+ series which are all on (primarily) supply chain risk.

Contract management breaks down into Negotiation, Analytics, and Governance, and each of these area has a lot of baseline functionality that is required (as covered in the Source-to-Pay series referenced above in parts 21 to 25).

And so on … it’s a mega-suite that goes far beyond your average S2P mega-suite.

However, before writing off the effort as too intensive or too expensive, one must remember that Finance is ultimately responsible for cutting the cheque, so they are going to want visibility into where the money goes and how it is supposed to be used. Not to mention, sometimes the only authority they need to cut the cheque is their own, so it might be an easier sale to sell or joint-sell to the CFO as well as another C-Suite exec. So a great FinTech Suite could be the easiest sell a new back office tech start up or aggregator could have!

The Prophet‘s 2024 Procurement Prediction Number 7

Data, Data, Data A

The Prophet has said that data will be your best friend in procurement and supply chain in 2024 if you give it chance.

And then asked Is 2024 the year you final opt to invest in [data] at the level you should?

Because it should be. As The Prophet also said, if for nothing else, do it to avoid being made the business function where fingers point when things go wrong, which they most definitely will if you don’t take every step you can make sure they don’t (and they still will, but you can be prepared for it and ensure that the disruption that happens is as minimized as possible). However, as I noted in a comment on the original article:

It’s not just better data analysis systems, it’s better data … chances are, if you haven’t been applying proper data governance, and let’s face it, there’s a 99%+ chance you haven’t, you need cleaner, richer, better organized data.

Also remember that’s not as easy as just buying some AI-based auto classifier / enrichment tool that will enrich your brake shoe database with the latest Girotti Oxfords and Montcler runners or take your incorrect supplier abbreviation and classify a denied party as perfectly safe when they are known to source from organizations that use slave labour and supply to militant groups and terrorists. (Don’t think it won’t happen if you fully trust an AI-based auto-classifer/recommender engine. It will. It has!)

Trusted data sources, such as those you get from data enrichers like Tealbook or validators like Apex Analytix will go a long way, but you will still have to manually review and fix those that can’t be auto-matched with very high accuracy (high accuracy is good enough for spend analysis, it’s not good enough for regulatory compliance or risk prevention).

And remember, have fun fishing the data lake you’ve neglected since you literally installed your first database. You never know what you’ll catch. While you’ll hook a lot of old rubber boots on your lines, you may also haul up a solid gold bar! Remember, you never dredged the lake, and there will be some priceless relics mixed in with the rancid pile of garbage.

Moreover, without great data, and the insight that comes from great data, the downside risk of the visibility, insight, predictive and actionable capability you lack today is immense and likely incalculable.

Once you have the data, you can easily install the right compliance, risk, and visibility platforms and achieve the intended results. (But without the right data, those solutions will be worse than expensive shelf-ware because if they are used, they will give the wrong results and insights that will lead to worse decisions than if they weren’t installed at all!)

Orchestrate with ORO and Solve Your Source-to-Pay-Plus Challenges!

Yesterday we indicated that while 2023 was the year for intake, 2024 may be the year of orchestration. The reason? Including the buyer in the process and making it simple for them to get information on policies, do their own tactical purchasing, and engage with Sourcing and Procurement is only the first step to successful Source-to-Pay+ in your organization. The next step is simplifying the life of a Sourcing and Procurement professional whose job has become considerably more difficult with all the regulations they need to adhere to, the risks they have to identify and manage, the sanctions they have to comply with, the (knee-)jerk policies the organization has in place, the supply risks they have to consider, the supply assurance that has become as important as cost, and the collaborations across half a dozen departments or more just to get the job done.

ORO was built to be that next step. More specifically, ORO was built to be the orchestration platform for procurement workflows, enabling an organization to build as many Procurement workflows as needed, involving as many stakeholders as needed, while integrating as many systems as needed, to support the organization in acquiring whatever products and services it needs to do business. There are two key words here:

orchestration
as it was designed to ensure that all parties who needed to collaborate could collaborate and get the job done quickly and efficiently; and
workflows
there is no ONE procurement workflow; there is one workflow per product or service the organization needs, which varies based upon the value of the purchase, the supplier, the location (of the supplier), how the product or service is to be used, and so on; e.g. there might be a typical workflow for 10,000 t-shirts for re-sale, a quick-purchase workflow for 100 t-shirts for an event, and a lengthened workflow for onboarding a new supplier to produce the next 100,000 t-shirts you plan to purchase

In the example above, a typical workflow might be sending an RFQ out to your already on-boarded and approved suppliers and asking them for a cost and delivery date. In the second example, it might be allowing your marketer to just get 3 quotes from local print shops, verifying the quotes are valid, allowing the marketer to buy from the lowest quote on the P-Card, and that’s that. In the third example, it might be subjecting the supplier to an extensive compliance and risk analysis to ensure there is no slave labour in the supply chain, unsafe working conditions at the factory, counterfeit materials, denied party associations, and so on … and only then onboarding the supplier of interest for a full sourcing event.

ORO can do this because they have built a no-code platform with fully customizable workflows that can be built from scratch using any capability of, or data in, the product and connect with, pulling data in and pushing data out, any integrated solution through the APIs. This can be used to orchestrate intake requests (because intake is just another Source-to-Pay+ module, which they provide as part of their orchestration, configured to your liking), processes, forms, and organizational master data (which can be grouped into projects).

When an end user logs in, they see their home screen where they can start a new process (be it a purchase request, supplier onboarding, evaluation form, and so on), see all their current tasks (as well as the estimated duration and status), and an easy smart NLP-based AI-enabled search capability that can take questions and guide the user to appropriate processes.

For example, all they need to do is enter their business request in plain English, and then the platform will ask them clarifying questions to guide them to the right process. For example, if they say they want a 3D printer for pharmaceutical research, it will know that the buyer is looking for laboratory equipment and not a mass-market resin 3D printer for 3D part models for manufacturing and then ask the user if it’s small laboratory equipment (as they are doing preliminary research) or large laboratory equipment (as they are testing suitability for mass production). (If the details are sufficient, they can go down to level 4 in a category tree.) They can then identify the most likely suppliers, including those the company has done business with in the past, and if the approximate spend is known, bubble up the best fit to the top (and allow the user to click into recent transactions). If the right supplier (and product) is identified, the user can then kick off a procurement request, and based on the value, the system will either guide them through the process of purchasing it themselves or kicking it off to Procurement (because the amount is over their spending limit). It will also tell them how long the process typically takes and the steps they, or the buyer, will need to go through.

When the request gets to the buyer, they can review all of the information entered by the requester and stored by the system, see the process they need to go through, send the required RFPs and forms to the supplier, get alerted when the response comes back, if the response and price is right, kick off the order, and it’s done. Moreover, they can jump into their sourcing system if they choose to edit the default RFP or go through its built-in processes, or just wait for everything to come back through the API integration and never leave ORO for a predefined process. (This also means that the ORO platform can use the APIs to fully create the necessary event/process in the integrated tool and, if SSO is enabled, ORO can jump you right into the third party application, and if the third-party application has a fine-grained API, into the screen that is appropriate for the current process step.)

Processes are very powerful and can contain as many tasks (which can be built in-system, third party, or data collection tasks), approvals, (stakeholder) reviews, forms, documents, notifications, requests, and sub-processes as necessary, in any order. This means that as soon as an event is kicked off for a software product that may need a security review and privacy review, IT and the Data Protection Officer can be notified, they can let the buyer know if they have any particular concerns not covered in the standard onboarding processes that they want to address and data they want collected, reviews can be staggered or split so as to prevent a process from getting too far when non-compliance or unacceptable risk can be decided early, or to prevent risk and compliance analysis from slowing a process down when the perceived risk is low or a supplier can always be subbed out last minute. Processes that can be done in parallel, including approvals, can be kicked off in parallel to minimize time. And allowances for send-backs can be made to collect more information or correct situations without cancelling and restarting the entire process and losing the history. And an impacted party cannot only see their current task in each process but see the entire process at a glance and the progress to date. They can also access any associated forms, documents, and see the milestones that have been completed at various steps (which could be for future steps if they are stuck in an approval or something was sent back to them for further review).

ORO is highly configurable and in addition to typical settings you’d find in any old SaaS app, you can also configure the assets available to be used in the application by the users who have access to workflow / process construction, modification, and utilization. This means you can select the apps they have access to, the data in those apps they have access to, and so on. And it’s very easy to use with an extremely intuitive user interface.

When it comes to process creation, the conditions that can be used to drive the logic can be defined on any data element in the system, or any system ORO connects to, as well as any derived data or measure on that data element in the system, or any system ORO connects to. ORO makes it possible for you to find those data elements and statuses by grouping them into categories (custom fields, department, ERP, invoice amount, suppliers, users, working capital, assessment risks, etc.) and making selection easy. For example, if in the ERP Supplier Status Info, you might have “new supplier”, “activation required”, “currency enabled”, “new country”, etc. Furthermore, the processes can be configured to monitor the status (and data) at all times and automatically jump back to a specific step if any conditions change that would require reviews to be conducted again or new approvals. For example, if during an assessment, IT decided that additional security is required, and kicks it back to the vendor who indicates they will add it for an additional fee, and that causes the overall sourcing event to cross a certain threshold, approvals can be revoked and a new approval chain executed (if approval from the CIO in addition to the buyer’s manager is now required).

In other words, ORO is the orchestration platform you didn’t know you needed when you are stuck trying to manage disparate processes across different systems, track when things change, and ensure things get done.

 

2023 was the year of Intake. Will 2024 be the Year of Orchestration?

Orchestrate the feeds
Pave the way for meeting needs
Phase one is initiated,
there’s no more paper chase, eh?
Set the space ablaze
Case closed, we did rephrase
Workflows for phase by phase
Gets you through the hard days

To the tune of “Orchestrate” by Eliozie
(Outtro NSFW)

2023 may have been the year of Intake with Zip raising 100M to do Procurement intake management for the layperson, but 2024 will be the year of Orchestration. The reason is that while it’s great to manage intake and give the organizational end-users and stakeholders insight into where their request is in the process at all times, allowing them to interact with Sourcing and Procurement where needed, it’s even greater to give Sourcing and Procurement the orchestration engine they need to get their job done and fulfill those organizational requests efficiently and effectively – across people, processes, and platforms.

With so many challenges for an average buyer to fulfill a request from an organizational employee or stakeholder:

  • identify potential suppliers
  • identify potential products
  • verify products
  • for suppliers not onboarded, verify supplier eligibility for onboarding
  • onboard the required suppliers for the sourcing event
  • conduct the sourcing event
  • identify the winner
  • conduct negotiations and …
  • collaboratively develop a contract for signature
  • (e-)sign the contract
  • identify and track the performance obligations
  • identify and track the compliance obligations
  • import the pricing into the e-Procurement system
  • send out the (first) PO
  • track the order acknowledgement and the shipment
  • ensure and record delivery
  • etc. etc. etc.

Doing all of this often involves

  • using a third party supplier discovery service to identify potential solutions
  • searching product specs in a third party marketplace that integrates with your catalog management application
  • using a TPRM (third party risk management) to make sure the supplier doesn’t have any obvious red flags
  • onboarding the supplier in your supplier management solution to collect organizational specific data requirements in order for you to potentially transact with the supplier
  • switching to an e-Sourcing tool to do the RFP/RFQ (as appropriate)
  • running a (weighted) analysis on the bids to select a winner …
    possibly in an analytics solution
  • conducting negotiations in a negotiation management tool (that may or may not be integrated with the CLM)
  • managing the contract drafting processing in the CLM
  • … and the signing in the e-Signature tool
  • and then run the the contract through a contract analysis solution to push the performance and compliance obligations into the governance module
  • … and extract and push the pricing into the e-Procurement system(‘s integrated catalog)
  • … where the PO is cut and the Ack received before …
  • they have to manage the invoice in the I2P (Invoice to Pay) / AP (Accounts Payable) system as well as verify the goods receipt
  • etc. etc. etc.

Furthermore, even if the organization has a “suite”, chances are it’s not that “sweet” and many of the core modules aren’t tightly integrated (as most of today’s S2P “suites” were assembled through acquisition and while the UX has been cleaned up to look consistent at first glance and there is some “endpoint” integration, chances are that it’s minimal data push and pull between process endpoints). It’s also often the case that if the required workflow doesn’t exactly match a very specific use case, the integration just doesn’t work seamlessly and it’s a lot of effort. That’s for the modules in the suite. Not all modules are in the suite. Most suites don’t have full TPRM, extensive compliance management, negotiation support, inventory management, etc. and that is through non-integrated third party solutions. A simple process that should take a few hours of effort to check all the boxes can take days of effort as buyers have to switch between multiple systems, check status, re-enter data, switch back to the intake platform to update the requester, make changes, and so on. Just like the introduction of “modern solutions” has taken onboarding from a 2-day fax and email process to a 2-week gated process with multiple, disjointed, approvals, the proliferation of disjoint, specialized, Source-to-Pay-Plus solutions has taken simple processes that take hours of person-work and days in real-time to complex processes that take days of person-work and weeks in real-time.

The solution? Procurement orchestration. Something that integrates, to the extent possible, all of the modules together in the right process with the right steps in the right seamless flow that requires any piece of data to be entered once and only once in a consistent user interface … and works for all parties, the requester, the buyer, and any stakeholder involved in the process.