Monthly Archives: March 2025

Forty Years Ago It Was The Big Money …

However, not sure The Big Money quite captures it anymore. the doctor suggests The Dumb Money. Seems quite apt, eh?

Dumb money goes around the world
Dumb money underground
Dumb money got a mighty voice
Dumb money make no sound
Dumb money pull a million strings
Dumb money hold the prize
Dumb money weave a mighty web
Dumb money draw the flies

Sometimes pushing people around
Sometimes pulling out the rug
Sometimes pushing all the buttons
Sometimes pulling out the plug
It’s the power and the glory
It’s a war in paradise
A Cinderella story
On a tumble of the dice

Dumb money goes around the world
Dumb money take a cruise
Dumb money leave a mighty wake
Dumb money leave a bruise
Dumb money make a million dreams
Dumb money spin big deals
Dumb money make a mighty head
Dumb money spin big wheels

Sometimes building ivory towers
Sometimes knocking castles down
Sometimes building you a stairway
Lock you underground
It’s that old-time religion
It’s the kingdom they would rule
It’s the fool on television
Getting paid to play the fool

It’s the power and the glory
It’s a war in paradise
A Cinderella story
On a tumble of the dice

Dumb money goes around the world
Dumb money give and take
Dumb money done a power of good
Dumb money make mistakes
Dumb money got a heavy hand
Dumb money take control
Dumb money got a mean streak
Dumb money got no soul

What is Spend Orchestration?

Spend Orchestration is all the rage. But what exactly is it?

Well, as we tried to point out in Demystifying the Marketing Madness for you, where we said it meant we don’t do anything different than all the other orchestration providers, but it sure sounds cool!, Spend Orchestration is essentially:

Clueless for the popular kids.

It’s a coming-of-age comedy where you have a slick looking, popular, over-funded new-age SaaS platform from fresh-out-of-college (dropouts) who want to do “good deeds” for the Procurement space by giving your Procurement department a “makeover” that connects all of your applications together so you can “manage your spend” and match stakeholders with the procurement professionals that can meet their needs (as the platforms try to justify their existence).

Upon implementation of the spend orchestration, there will be one fiasco, hardship, and falling out after another as you realize the platform doesn’t do anything if you don’t have core Procurement platforms for sourcing, supplier management, analytics, contract management, procurement, and invoice management/accounts payable … otherwise, it’s just intake to nowhere and orchestrating faster push and pull from your incomplete, outdated ERP/MRP. Also, without good platforms in place, it will just make it easier for the stakeholders to admonish you on a daily basis when your Procurement process doesn’t actually pick up the pace or perform more preferably. And you will be more jealous of your peers that skipped the orchestration platform and went straight for the S2P or P2P platform that actually solves some of your Procurement problems.

Now, eventually you will acquire the missing pieces (or these orchestration platforms will build basic functionality) and you will kiss and make up at a big fat Procurement Wedding like ISM or DPW, where they invite you on an all expenses paid trip to participate in their prestigious Power Procurement panel, but it will be a very rocky road on the way.

Our suggestion is that if a company comes knocking with “spend orchestration“, you tell them thanks and no thanks and save the comedy hijinks for the big screen. If you do need orchestration — which you won’t know for sure until after you’ve consolidated your applications, determined which are not easy to direct connect (due to a lack of [Open] APIs), which don’t allow easy access across the organization, and where orchestration might actually help — you want to get that orchestration from a company that has grown up, not one just starting it’s teenage high-school journey!

Orchestration Won’t Solve a Reckless Runaway SaaS Proliferation Problem!

In a recent LinkedIn Post, THE REVELATOR asked Why you need an Internal and External Metaprise Strategy for optimal Intake and Orchestration capability? and noted that:

  • Most large enterprises use between 10-25 procurement software platforms, with some complex organizations exceeding 25. Just for Procurement!
  • A 2022 study by Forrester Consulting found that large enterprises use an average of 367 software applications and systems.
  • A 2023 report by Zylo found that large organizations deploy an average of 660 Software as a Service (SaaS) applications.

Moreover, the doctor has seen stats:

  • as high as 87 individual SaaS products in a single department in larger orgs
  • exceeding 40 for Marketing or Sales … when you can’t find more than a half dozen apps that actually do something significantly different

All the doctor can say to this is that if the number of platforms you are using numbers is in the three digits, you don’t need orchestration, you need consolidation!

For example, Marketing and Sales is all lead generation/management and customer prediction/funnel/CRM. With no coherent strategy (beyond maybe SalesForce for CRM), every employee or team will purchase their own set of Apps and the organization will have 5 to 10 apps that more or less do the same thing with 90% overlap. And similar situations abound throughout the organization.

So yes, these organizations need a strategy, and that strategy should be to centralize app decision and management in each department to prevent unnecessary app sprawl. After all, each app you orchestrate costs you even more money than the app subscription cost (as the orchestration app will charge you based on the number of integrations, and how many of those it supports out of the box), which ends up ballooning your overspend to integrate apps you shouldn’t be using in the first place.

Which means that the first thing these organizations need is a SaaS App Optimization platform that can crawl their SaaS purchase and usage data, identify what’s used, identify more-or-less duplicate apps, and identify which app should be consolidated upon based on usage. This will not only reduce costs by over 30% once the unnecessary apps can be dropped (at the end of the current license or payment cycle), but increase productivity (as [cross functional] teams work in the same app ecosystem).

Moreover, this is just the tip of the overspend iceberg. Once the first round of consolidation is done, these organizations need to tackle SKU sprawl in their enterprise platforms, and their ERP, Cloud Host, and Back-Office Systems in particular where the common vendor strategy is to offer “bigger discounts” when the client purchases packages that contain modules they don’t need or more seats than they will actually use, which, even with the bigger discount percentage off of list price, are still designed to cost the organization more than they should be spending. To do this, they will need to use a vendor that are experts in enterprise software system purchases and know how to unbundle these consolidations and get you insight into market pricing on a SKU basis for hard-nosed fact-based negotiations.

Only once the organization’s platforms have been consolidated and optimized should the organization embark heavily into orchestration, as this is the only way to ensure they don’t do unnecessary work or pay unnecessary costs.

Gen-AI Won’t Work For Procurement … And Neither Will Agentric AI if the foundation is Gen-AI!

Right now every vendor is pushing “AI”, and the vast majority of that “AI” they are pushing is a Gen-AI LLM, and often that is just a wrapper of a third party Gen-AI LLM, like Chat-GPT (which only the French know how to pronounce properly).

And they are pushing this as a cure-all for all your procurement ills. It’s the new magic elixir. The new panacea. But, in reality, it’s the ultimate silicon snake oil, because it almost works. And it makes you feel really good when you use it. In medical terms, it’s not a treatment, it’s a psychedelic that takes all your pain away (until it wears off that is). But, just like the spoonfuls of LSD that allowed Bender to become the Iron Chef, it will only last long enough for the vendor to win the contract from you, and then it will start to fade. Until it fades completely when you need it most and fails you utterly when you need to figure out how to deal with a border closing that just happened, a critical raw material shortage due to an unexpected natural disaster, or a trade war no one saw (but should have seen) coming.

This is because, as we keep telling you, Gen-AI, which was built as a predictor technology to predict what block of text, in natural language, should follow an existing block of text (using chain-of-compute), based on training across a very large corpus of existing documents. It’s no more, no less. That’s why it’s only good for tasks that can be reduced to large document search and summarization. (And natural language translation tasks, because it understands basic semantics and can easily be trained to translate to and from any machine language you train it to.)

However, this doesn’t help you with any task that requires actual computation! It’s not analytical data processing, it’s not optimization, and it’s definitely not advanced machine learning for advanced mathematical pattern detection. These are the majority of your tasks and the tasks you need to do to analyze a situation. Buys should be based on the lowest total cost of ownership at the maximum acceptable risk level. Sales predictions, and thus demand, should be based on tried and true mathematical trends, not hunches or market hype. Basic invoice processing should be against business rules for validation, approval, and payment, and that should be primarily based on rules-based automation.

Note that none of these core technologies you need to solve the majority of your problems are AI, as we pointed out in our recent article that said you don’t need Gen-AI to revolutionize procurement and supply chain management. Not to say that these technologies can’t be enhanced by the right application of AI — for example, AI could predict the optimization paths most likely to arrive at the optimal answer, the right curve fitting algorithms to match the trend lines, and the right outlier analysis to identify missing, off, or fraudulent information.

Real solutions come from real tried-and-true AI technology developed over years, or decades, that was designed to solve a specific type of problem, not generic text processing technology that was not designed for the problem, has no understanding of the problem, and will make stuff up in an attempt to solve the problem (which is referred to as a hallucination, but is not a bug, but a core feature of Gen-AI / LLM technology).

This is also why Agentric AI built on Gen-AI won’t work — you can’t automatically build an RPA sequence from a chain of compute that could be completely hallucinatory, and you certainly can’t rely on it to solve your problem.

This doesn’t mean there isn’t a use for Gen-AI, it can be trained to be a natural language interface to these other tools that will work reliably the vast majority of the time (say 95%+ if trained over time), but the use is definitely NOT what you are being promised.

Why You Need BTCHaaS!

Nine years ago we told you that you needed MROaaS, and you most definitely do, but it’s not enough anymore, now that you can’t predict what your parts are going to cost now that you’re Back in the U.S.S.R, you also need BTCHaaS: Border Transport Cost Heuristics as a Service.

Basically, now that USA border tariffs (and counter-tariffs from Canada and Mexico) are more unpredictable than the weather (where 3 day forecasts in some areas approach 97%, East Coast Canada excluded, and 10-day forecast accuracy is approaching 50%), and come and go on a daily basis, you need a border transport (BT) solution that uses predictive analytics solution that minimizes your tariff impacts that uses cost heuristics (CH) derived from similar prior patterns in similar tariff announcements and withdrawals, costs per day of delay, and spoilage risk.

Basically, you have this dilemma. When a tariff is announced on the border your truck is scheduled to cross for the day it is scheduled to cross, do you

  1. accept is a cost of business, do nothing, and have it cross as normal
  2. send it to a truck stop and tell it to wait for a revised decision tomorrow
  3. turn it back around, unload, and do without (for now)

Depending on:

  • the value of what’s in the truck
  • the risk of spoilage
  • your contractual requirements
  • storage costs on the other side of the border
  • the tariff(s) that will be applied

Your best option on any particular day will vary. For example:

  • if the tariff is likely to be rescinded in the next three days, and you can wait a day or three, maybe you tell the driver to wait and pay an extra one to three days of salary/transport fee
  • if the tariff is not likely to be rescinded in the next three days, but likely within the next few weeks, and the tariffs would be in the tens or hundreds of thousands of dollars, and you can do without the goods for a few weeks, maybe you send the truck to a local warehouse and pay a temporary storage fee
  • if the tariff is not likely to be rescinded at all, and you can do without the goods in the short term, and you are not contractually obligated to take them (which might also be the case if the tariffs are so high that they qualify as force majeure), maybe you turn the truck around and drop them off where you picked them up
  • if the tariff is not likely to be rescinded, and you can’t do without the goods, then you should just cross the border

But that’s not an easy decision to make on the spot. You need to know

  • the transport, and waiting, cost per day
  • the (potential) cost of (additional) spoilage (i.e. 5% of produce may spoil)
  • the (potential) cost of any delay
  • the cost of the tariff
  • the cost of localized storage (plus the additional unloading and loading fees)
  • the likelihood of a decision change within a short time frame (3 days) and a mid-time frame (3 weeks) based on market data and sentiment analysis to tariff announcements

and do all the calculations and make recommendations based on the possibilities for you, a human with human intelligence (HI!), to accept or reject. After all, if the truck is carrying 2 Million of electronics or auto parts, a 25% tariff is 500K, and it doesn’t cost anywhere near that to make the driver wait an extra couple of days (and to hire a few security guards to keep it safe), and will be worth it if the likelihood of a reversal, or significant reduction, is high.

So yes, MROaaS is not enough anymore … you now need BTCHaaS!