Last week we tried to further demystify the marketing madness for you by clarifying that spend orchestration is essentially Clueless for the popular kids.

This is really important because there is no difference between a “spend” orchestration and a plain old “regular” orchestration provider, and neither provides any value whatsoever if you don’t have any spend management (i.e. procurement) systems in place to actually process the spend. Otherwise, the best you get is intake to nowhere … which just provides your stakeholders yet another avenue to ask “where’s my stuff” and another reason to say “I thought this new system was supposed to make you more efficient” and get more impatient when their stuff doesn’t arrive any faster.

In other words, unless you have a hodge-podge of best-of-breed systems that cover most, if not all, of the source-to-pay process, that don’t interconnect, and the systems are old and don’t support multiple roles (or charge full license fees for each user, even a 99% read-only role, that access the users), there is no value in an orchestration, as we’ve said many times (including in our post on how Marketplace Madness is Coming.

What you need is not spend orchestration but spend defenestration — you need to throw any and all unnecessary spend out of the window, and that requires spend investigation, need verification, negotiation, observation, and payment verification. That requires spend analysis, demand forecasting and management, fact-based market insight, adherence to contracts and plans, proper procurement platforms, and proper payment validation platforms.

Moreover, it requires proper utilization of these platforms. And that requires Human Intelligence (HI!), skill, and deep (deep) Procurement knowledge. Geek skill and Procurement nerdiness. The nerdiness to use a best-in-class spend analysis and seek out the opportunity that a pre-packaged analytics routine will never find (because you’ve already stared at that report ten times and found nothing after the second time [wonder why?]). The nerdiness to examine the forecasts and use best-in-class forecasting techniques on real (and up-to-date) sales and market demand data. The nerdiness to pour through market cost data for materials, standard overhead costs, energy costs, water costs, differential costs for different production models, and cost models presented to you by third parties and the supplier to pinpoint the right the model, the right data to feed it with, and the true production cost at different volume levels — and then use this in a fact-based market data negotiation. Then, when you cut an agreement, the nerdiness to make sure it is encoded in the right systems and properly executed on as well as the nerdiness to follow the market over time and detect any inflections that would require you to change direction. And, finally, the nerdiness to make sure the platform is configured to properly m-way match every invoice, detect any attempts to fraudulently change the amount, terms, and payee, and only pay for goods and services received on the agreed upon schedule. In other words, if you want to truly succeed at Procurement, forget about the Clueless — It’s time for the Revenge of the Nerds!