In our last post on how AI increases the need for manual spend analysis, we noted that the claims that AI negates the need for manual spend analysis is all lies, damn lies, and statistics (of the worst kind).

AI throws more “opportunities” at you than you can process with spreadsheets and traditional AI tools, and it does so faster than an entire team of analysts working in the basement, and, unlike the opportunities coming from the analysts which are at least plausible, the “opportunities” coming from the AI may be completely hallucinatory and a complete waste of time (compared to the opportunities from the junior analysts that may not be worth the effort but are actually real).

So you need to be able to investigate and verify them very, very quickly — which means you need a tool that can:

• rapidly suck in a dataset, or multiple
• allow for rapid (re)-classification and (re)-categorization on the fly, using both pre-defined and on-the-fly rules, as well as Gen-AI for suggestions (with quick acceptance or rejection)
• allow for the quick construction of cubes (and sub-cubes) and views (and sub-views) to verify spend, variances, and potential opportunities against market prices
• allow for easy generation of derived dimensions and derived cubes with what-if scenarios
• allow for easy visualization and cross-comparison of scenarios to identify and confirm true opportunities

And then when the opportunities don’t pan out, you need to be able to quickly

• replicate the data set and rapidly (re)-classify and (re)-categorize on the fly, using both pre-defined and new on-the-fly rules
• create new cubes (and sub-cubes), views and sub-views on the recategorized data
• create new derived dimensions (and derived sub-cubes) based on what-if scenarios
• cross-compare and visualize the new scenarios to identify real opportunities

Or you will never realize any value from spend analysis, especially if you are using AI. The only difference now vs. 20 years ago when you desperately needed a good spend analysis tool was that 20 years ago you didn’t have any opportunities unless you had the time to look for them. Now, you don’t have any opportunities unless you have the time to dig through all of the fake opportunities generated by AI to weed out the real ones from the hallucinations. The value curve is the same, only the ends have switched positions.