Why Big Analyst and Big X Consultancies SUCK …

In a post on LinkedIn a while back, THE REVELATOR indicated that the real reason Gartner sucks (and that their stock dove 30%) is because, at the end of the day, they aren’t very good at tying advice to outcomes (and likely don’t even attempt to do it at all most of the time in ProcureTech). But in all fairness, that holds true of all the Big Analyst firms and Big X Consultancies. Also look at Forrester and IDC reports — it’s always the same old vendors or the hype of the day, whether or not that hype is delivering any value whatsoever. (And the answer is “very little” for intake and orchestration — because you can’t orchestrate an empty pit and if you attempt to orchestrate an elementary music class, be prepared for the migraine of your life — and essentially none for Gen-AI, with MIT pointing out that only 5% of deployments are delivering any value whatsoever.)

But it’s not just the Big X analyst firms. It’s the Big X consultancies as well! Now, I know you are saying “but surely they do better, they are consultants, they do projects, they have best practices, and they’re paid for results” and while that is all true,

  1. they’re not all experienced consultants (and the number of juniors on many projects is scary — I’ve heard too many stories about a PE firm trotting in a McKinsey or Accenture* after a big acquisition (because it’s their standard acquisition playbook) to optimize and rightsize operations who come in with a team of 20, of which only two actually provide value beyond what the company already knew. One of the biggest companies in our space literally marched them all out at the end of the day and told them NEVER to come back because when it came to ProcureTech expertise, they identified one individual (the project lead, who they’d likely never see again) who was sharp and got it and would definitely be able to add value if entrenched in their operation, one (his right hand man) who was smart, hardworking, and capable of learning fast and who might be able to add value, and 18 juniors who didn’t know anything that wasn’t in the 7 year old playbook on Procurement handed to them when they started, a playbook this company had rewrote multiple times over the years)
  2. they don’t all have deep relevant project experience in Procurement (or whatever business function you’re bringing them in for) in your Industry
  3. their “best practices” are super generic so they can be applied across the board, which means they are not tailored for your industry and definitely NOT tailored for you (so they are not best)
  4. and they are paid on promises of results, which sometimes don’t materialize

Just like I keep saying it’s not the analyst firm, it’s the analyst, it’s not the consulting firm, it’s the consultant, and the sad reality is that the bigger the firm, the smaller the percentage of senior experienced talent in that talent pool, as the best talent who don’t make partner (and then have to focus more on managing and selling than project delivery) are constantly recruited by clients, consultancies, and even tech companies or the ones able to go out and join/build niche consultancies. There ends up not being enough senior, experienced, talent to go around and you’re essentially playing the lottery that one of these resources will end up full time on your project.

Since these consultancies want to be outcome focussed, in an effort to do that with more junior people, what ends up happening is they end up writing the advisory playbooks as metric focussed — what percentage of spend is on personnel in a best in class, what percentage of spend is on tech in a best in class, and what is the typical breakdown of headcount and tech spend by module or platform. Then, they tell you:

  • your headcount spend is too low, so you need to go out and hire X people in Y roles because, well, metrics and statistics and that will help because of scripted reasons (more sourcing pros mean more events mean more savings, more supplier managers mean better quality, etc.)
  • your headcount spend is too high, so you need to fire X people in Y groups because they must be tripping over each other and/or bringing your profit margin down
  • you aren’t spending enough on tech, so go spend 10 Million on Gen-AI and that will automagically fix everything
  • you are spending too much on tech, so go out to bid for a new ERP, S2P suite, orchestration platform, etc. because you obviously didn’t go to market right when you bought your current tech

Not realizing that

  • the headcount needs differ in every industry AND every company
  • the tech needs differ by industry, company, and process
  • it’s not spend, it’s ROI per spend

and this means

  • you might only need one supplier data manager in commodity indirect because there’s always three more suppliers waiting to supply you the same thing
  • but you might need ten supplier relationship managers in direct, each managing a different supplier (pool) producing a different, custom, component for your advanced engineering or biomedical device
  • you might not need best in class optimization backed sourcing for indirect because automated auctions will get you market price every time
  • but you might need best in class optimization, analytics, and market should-cost modelling platforms to get a grip on your direct sourced custom designs
  • and sometimes spending more on headcount and tech than across-the-board “average” yields a significantly better return because your quality stays high, stockouts only occur during global disruptions, your data processing is 95% automated freeing your staff to focus on strategic issues, etc.

But what can we expect from fresh grads with little mentorship (who are rushed into Gen-AI “training”) who get all of their insights from these Big Analyst firms that

  • publish quadrants and waves that are completely unrelated to reality for the majority of companies with the same 10 to 20 large vendors every year that only work for select large enterprises (and the other 40 to 80 vendors continue to be completely ignored),
  • constantly push and promote context-free (Gen-)AI, despite one of these firms publishing a now buried/deleted study a few years ago that stated 85% of AI projects fail and the recent MIT study that tells us, no, in fact, 95% of these projects fail to deliver any value, and
  • unless you get one of the few analysts who actually gets it, employ playbook-based responses to inquiries that don’t have any context (because the analysts don’t have any time to create tailored recommendations to context because they spend too much time doing basic data collection where 80% of it could be captured in a survey monkey tool [or 95% by a well trained SLM {or, better yet, classical semantic tech with provable accuracy rates} that could map free text to standard process needs and vendor solution categories for easy verification and correction by a true human expert]).

The reality is that until

  • big analyst firms and big consultancies admit their flaws,
  • start tying actual outcomes to the standard projects/recommendations they made, and
  • start analyzing and using these results to tailor recommendations to their clients that have a good chance at actually delivering value

these firms, and their standard recommendations, are going to continue to suck and your chances of success are going to remain at 12% for standard projects and 5% for Gen-AI projects.

Sad, but true.

* not realizing that the reason the company was such an attractive acquisition target in FinTech/ProcureTech was because they already knew all the best practices that the big firms have in their playbooks and were employing them effectively; these Big X tend to do well on average companies that are not best in class or deep in modern process or technology

ChatGPT is NOT Your Friend!

I’m still seeing too many posts out there on how ChatGPT is your friend and how it’s the biggest productivity hack ever and this has to stop.

It’s Not Your Friend. It doesn’t care if you live or die and will not only urge you to give into any and all suicidal thoughts, but provide how-to guides for you.

It’s not a productivity hack, because it’s, at best, a drunken plagiarist intern and you have to review everything it produces. Moreover, you have no clue if it’s mostly right, partially right, or a complete work of fiction. I was reminded of this the other day talking to a tech guru on a legal team that asked their LLM about what laws might impact a new contract with a new supply chain setup in the affected regions, and the LLM came back with three laws, complete with full text and author/site citations, that the team should review for relevance. Upon digging into each law, they found that none of the laws were real, and everything was completely fabricated — the laws, the citations, and sometimes even the bios/bodies who supposedly wrote them! It didn’t matter how much careful prompting they gave it, how specific the request was, and how much time went into building the request and allowing the LLM to do its thing, at the end of the day, it still made everything up and wasted a few days of the team’s time — forcing them to start from square one the old fashioned way and do it all over.

This is why, despite every consultant’s claim to the contrary, ChatGPT CAN NOT create a good draft of an RFP simply from a template and a product or service identification. In the best case, all it can do is just repeat the suckage found in the majority of RFPs in the data set it has been found on. If there weren’t enough RFPs to train its probabilistic predictors, it’s going to make stuff up that, unfortunately, sounds really good because the models, for the first time, capture the intricacies of putting words together to not only form proper linguistic utterances but do so in the common vernacular, which means it sounds human, smart, and right when its still a machine, dumb, and wrong. And no matter how good the “reasoning” seems to be, it won’t be based on logic and will be wrong and circular, but it will take more deftness and effort to catch the mistake than just write your own RFP from scratch. (Now, this doesn’t mean that SLMs can’t be trained to help you in RFP construction and reduce your workload 80% to 90% of the time, just that LLMs can’t be used and even with SLMs, a human will still need to be heavily involved in the process and review. However, to date, I’ve only seen ONE company get this right so far, and have only talked to two or three more that are on the right track.)

I tried to address this in my Best Practice Tech Selection reprise, my How to Write a Good RFP, and my Bells and Whistles Lead to Cells and Thistles series, but apparently I’m not clear enough as the LinkedIn influencers and the consultants and analysts they are influencing still aren’t getting it!

ChatGPT can’t do your work because it is NOT intelligent. All you are accomplishing is dirtying our atmosphere and denying our fellow humans clean water so that you can power queries (and keep the machines from overheating) that take 20 times (or more) the processing power of a Google Search and aren’t guaranteed to return any usable results (while allowing your cognitive abilities to atrophy through over-reliance on dumb tools). (We should not see stories about how I Can’t Drink the Water in the richest and most powerful nation in the world [because of a data centre]! It’s shameful! But we are now seeing these stories, along with “I don’t have water!” stories because data centers are now consuming over a trillion gallons of freshwater globally, a resource we are running dangerously low on in many countries. Half of the USA is already suffering from water scarcity issues! And you’re literally making it 20 times worse thanks to your ChatGPT addiction!)

For an RFP, it’s not a high level bill of materials, feature / function / support checklist, or detailed profiles of what you think you need — it’s processes you need to support, capability gaps you are missing, and skills that you need augmented. ChatGPT, or any LLM doesn’t know that! Only YOU know that. For many other tasks that require human intelligence to figure out, it’s the same story — ChatGPT doesn’t know, makes stuff up, and gives you suckage.

Moreover, you can’t trust it for deep data analysis. It has been demonstrated to get basic math wrong many times (or, when pushed to find savings, multiply a result by -1 and lie to you). It can usually compute directionally accurate results, but that’s it. But we’ve also seen many instances where the EXACT SAME QUERY was asked twice in a row on a data set that did not change, and it gave two different answers. Even the dumbest drunken plagiarist intern would say “I just told you the answer you nitwit. It’s this!” Moreover, right or wrong, the dumbest drunken plagiarist intern would repeat the same answer. (It’s so bad that even Gartner has projected that conversational analyticswill fall off of its hype cycle within 2 years!)

Furthermore, it is not intelligent, and has no brain, so it cannot brainstorm … the best it can do is serve up other people’s ideas you may not have heard about! There’s a reason you will not have thought of some of the ideas it brings back, and the reaason is the ideas it will bring back are so ridiculously stupid (and obviously wrong) that only a complete and utter moron would give them a second thought.

It’s a fun, planet destroying, toy that will always hallucinate, because that’s part of its core design, and that may or may not give you something useful on any given query. So if you have to manually verify everything it does, how can it be worth using?

And yes, it really does destroy the planet compared to classic Google Searches. This YouTuber does a great job of explaining, in plain English, How AI is Impacting the Planet for those of you who refuse to process the written word I keep presenting to you.

But if you don’t mind planet killing, or a technology tool that will expose your entire conversation history and confidential/trademarked/top-secret corporate data to the whole internet, then be my guest and use it. It’s your business. Feel free to flush it down the toilet if you like. Not my place to tell you not to.

I’m just here to remind you that ChatGPT is NOT your friend! (And neither is any open LLM!)

Sustainability in 2025 and Beyond, Part 3: Breaking Out the Stakeholder Requirements

In our first installment we noted that while sustainability may have fallen out of favour in the current American political and regulatory environment to the point that we had to counter the Chief Sustainability Officer graphics going around earlier this year with a Chief Sustainability Officer: USA Edition, sustainability, at its core is becoming more and more important to corporate survival. In our second installment, we described how sustainability concerns permeate every department of the organization, and failing to adhere to them is not only unsustainable in the environmental sense, but possibly in the business sense (because sustainability, done right, also sustain costs at an affordable level, and thus profits).

In this, our third instalment, we are going to dive into the stakeholder engagement that is required for sustainability success. As per our first post, stakeholder engagement is required beyond just the business departments for success. It also requires alignment across:

  • investors
  • the board
  • suppliers / contractors
  • customers

Investors

The best sustainability initiatives with the longest term potential often involves up-front investment (which often results in short-term losses), which means that the investors need to be on board for any major sustainability effort, and willing to both make the up-front investment and take the short-term hit to the profit margin (for long term gains).

The Board

The Board, who answers to the shareholders, also needs to be onboard because the minute profits drop year-over-year is the minute the board is going to throw you under the bus when the expected profits that they promised the shareholders (they answer to) do not materialize. The Board needs to see the long-term gain potential, accept the vision, and communicate that to the shareholders, of which the majority will need to see the long-term value of up-front sustainability investments, for the initiative to be supported over the necessary term.

Suppliers / Contractors

As an organization, you are not sustainable if your suppliers are not sustainable, especially if your definition of sustainability is to minimize non-renewable energy usage and reduce carbon in your supply chain. You can’t have a clean operation if all of your suppliers, carbon wise, are the dirtiest drunks.

Customers

You might think you are sustainable if your operation and your supplier operations are sustainable, but like every other business, you depend on business from your customers. Unless you are directly selling to the end consumer, if your corporate customers are not sustainable, and they end up in trouble due to consumer revolt or financial troubles from uncontrolled costs, that’s going to trickle down the supply chain to you. You want to seek out, support, and serve sustainable customers.

Your Business Counterparts

For true sustainability to materialize, the entire organization needs to be on board, not just your team or department. As with anything worth doing, sustainability is a continual journey, not an easily accomplished task as the first leg may consist of the equivalent of a thousand miles of effort. But done right, it’s always worth it.

So now that you understand who needs to be onboard, we can start outlining key projects the organization should start with, focussing on key goals that not only help with regulatory support in regions that require it, but can also be used for brand building.

Sustainability in 2025 and Beyond, Part 2: Breaking Down the Organizational Requirements

In our last installment we noted that while sustainability may have fallen out of favour in the current American political and regulatory environment to the point that we had to counter the Chief Sustainability Officer graphics going around earlier this year with a Chief Sustainability Officer: USA Edition, sustainability, at its core is becoming more and more important to corporate survival.

This is because, it relates to all aspects of a business, including, but not limited to:

  • Operations, Procurement, and Supply Chain
    • Facilities
    • IT Infrastructure
    • Materials
    • Manufacturing
    • Utilities
    • Distribution
    • Marketing & Sales
  • Talent
  • Risk Management
  • Legal and Regulatory Compliance

Operations: Facilities

When it comes to your facilities, sustainability is more important than you realize. Buildings, especially those that are poorly insulated, use old style fluorescent lights, high flow toilets and urinals, and don’t recycle water for their landscaping requirements can use a lot of energy for heating and cooling and a lot of water in their daily operation. Basic sustainability is minimizing energy and water usage, as the cost for both is increasing year after year, month after month, and sometimes day after day, especially where there are shortages. Minimizing your facility energy and water utilization is key to sustainability, not just from an environmental point of view but a cost (and thus profit) point of view.

Operations: IT Infrastructure

Your organizational IT Infrastructure, especially if you are running older servers and storage requirements, is likely an energy hog running 24/7/365. Moreover, if you are careless about your purchases, you can be buying equipment that uses more rare earth minerals than necessary, and those mining operations aren’t that clean.

Operations: Materials

Materials are a cornerstone of sustainability, especially if they are not renewable. We like to think otherwise, but there is a fixed amount of any non-renewable material on this planet, and unless we learn to recycle and reuse it, we are going to run out (especially since we shoot so much debris up into space and/or let it crash into the ocean where it is irretrievable from the ocean floor). As for renewable biological materials, unless you can replenish them in a year (like food-stuffs), without proper management, they can run out too.

Operations: Manufacturing

Like facilities, production processes can be energy and water inefficient. Moreover, improper or unoptimized production processes can lead to a lot of material waste, exacerbating material sustainability problems (and costs) even further.

Operations: Distribution

Distribution requires vehicles, and most of those still require a form of combustable fuel. The further you have to transport, the more non-renewable fuel you are going to burn, the more you are going to spend, and the more carbon you are going to produce. Even if you have a hybrid local fleet, when you amortize the carbon that went into producing that vehicle and that battery, if the production operation was not sustainable, you may still contribute more carbon in your calculations than if you had burned high efficiency ethanol. (Also, don’t believe the claims that EVs are carbon neutral between 25,000 and 40,000 kms. Most of those make unrealistic assumptions about the cleanliness of the battery and manufacturing supply chains as well as the availability of renewable energy to recharge which just aren’t realistic. We did our own calculations, and, in some cases, those EVs are still dirty at 1,000,000 kms! Now, any EV created with a modern production process using a battery supply chain that is sustainability focussed should be carbon neutral within 100,000 kms, and run for up to 300,000 kms, effectively making them carbon positive over their lifetime compared to non-EVs, but this is not guaranteed. As with every other marketing claim, you have to verify!)

Operations: Marketing & Sales

Marketing and Sales may seem low-stakes in sustainability, beyond the fact that they can quickly blow their budgets and quickly put your finances in the gutter (leading to existence sustainability), but depending on how they conduct their sales and marketing campaign, they can contribute a significant negative impact to your sustainability bottom line. For example, if sales believes that every meeting and demo has to be done in person across the country, via business class flights, that’s a lot of cost and carbon. If marketing loves their high-gloss fancy print collateral, forcibly handing out over-the-top brochures to everyone who walks by the booth, that’s a lot of wasted paper and money.

Legal & Regulatory Compliance

Let’s face it, despite all of the above, most organization’s won’t put more of a focus on sustainability than they think they need to, because they still believe the path to profitability is more sales (even though at some point the cost of sale becomes too high because their core market is saturated), and failing that, cost cutting through Procurement. Typically, the focus they believe they need is whatever focus is necessary to meet the minimum legal and regulatory compliance.

In some jurisdictions, especially those that will levy big fines or penalties if a requirement is not met, this is currently the leading contributor to sustainability, even though the leading contributor should be the long term business sustainability and profitability that can result from the right sustainability focussed investments.

Risk Management

Without good risk management policies, not only is there no guarantee that the future risk of not being sustainable will never be taken into account in any decision made by any operational department, but a real risk that Legal might not be aware of and miss a (coming) regulatory (reporting) requirement and the organization will end up in hot water.

Talent

Talent is key to your operation, and it’s often the hardest to attract, develop, maintain, and sustain over time. However, you can’t sustain a sustainable operation without the right talent. You need to identify the raw skillsets required to t, hire the talent, develop the talent, mentor the talent, and then have them train and mentor the next generation of talent before they move on or retire. However, if you don’t have this talent, you will make unsustainable decisions across your entire business.

There’s quite a lot to sustainability, but there are some commonalities that, if focussed on, can make a big difference. In a future installment, we’ll review some of those.

Sustainability in 2025 and Beyond, Part I: Intro

Back in the beginning, circa 2008, Sourcing Innovation ran one of the first cross-blog series on Sustainability (with the Wrap-Up post still available) and it’s importance to Procurement, Supply Chains, and business sustainability overall.

While sustainability may have fallen out of favour in the current American political and regulatory environment (and you can see our post from earlier this year on how in the corporate world, sustainability/ESG is NOT a priority), to the point that we had to counter the Chief Sustainability Officer graphics going around earlier this year with a Chief Sustainability Officer: USA Edition article, the reality is that, regardless of the current disdain in some political landscapes, sustainability, at its core is becoming more and more important to corporate survival.

This is because sustainability, at its core, is necessary to the continued existence of the corporation, whether you go with the classic definition of maintaining at a certain rate or level over time or the new definition of avoidance of the (over) depletion of natural resources in an attempt to maintain an ecological balance over time.

Neither of these conflict with the fundamental goal of a corporation, which is to make a profit for their shareholders, as without sustainable functions, they will not be able to maintain stable operations (and thus profits) over time. Without sustainable practices, a corporation’s raw material and energy costs will skyrocket over time, making profit all but impossible.

So sustainability is important, especially since it relates to all aspects of a business, including, but not limited to:

  • Operations, Procurement, and Supply Chain
    • Facilities
    • IT Infrastructure
    • Materials
    • Manufacturing
    • Utilities
    • Distribution
    • Marketing & Sales
  • Talent
  • Risk Management
  • Legal and Regulatory Compliance

Moreover, it requires stakeholder engagement beyond just the business departments, as it requires alignment across:

  • investors
  • the board
  • organizational departments and employees
  • suppliers / contractors
  • customers

In this series, we’re going to break down what the requirements really are (beyond just the regulations your organization is currently subject to), why they are important, and give you some hints on how you can be more sustainable in a way that is approved by, and benefits, the business, regardless if you are located in ESG/Carbon-Scope 3 focussed Europe, regulatory rollback USA, or somewhere else in the world.