Author Archives: thedoctor

Yes Jon, “We’re Always Right, No Questions Please” is the new Big X and Big Analyst Firm Mantra

Note the Sourcing Innovation Editorial Disclaimers and note this is a very opinionated rant!  Your mileage will vary!  (And not really about any firm in particular, although only a few firms have removed our questions and discussion points, and directly aimed at marketing/public relations, as we’re not sure the analysts or consultants behind the firms, research, or opinions would shy from an open, honest, fact-focused debate.)

This originally appeared on LinkedIn. Archiving it here for posterity (and accessibility).

Dear Jon THE REVELATOR, we need to answer your comment handling inquiry in Censorship in the Procurement World with a quadrant, because they (the Big X and Big Analyst Firms) won’t understand the discussion otherwise.

Personal Not Personal
No Claim 1. Delete 2. Ignore
Valid Claim 3. Insult, Respond 4. Debate

1. If the response has no claim and is personal, such as “You’re an @ssh0l3 and a gr!nch!“, you can delete. Flame wars are for Facebook and X, not business networking platforms.

2. If the response has no claim and is not personal, such as “Hey, I like the colour blue too!“, then you just ignore it, even if you feel it is totally irrelevant. Maybe it’ll distract from the core message or core conversation in the presence of a weaker mind, but take the high road, even if you are preying on that weaker mind as your next sucker, err, client.

3. If the response has a claim, but also has an insult, respond appropriately. e.g. if you get something like, “You’re dumber than a doorknob for not believing in our messiah, Gen-AI, because early results haven’t disproven that intelligence won’t emerge someday if we just give it more cores and more data.”, then it’s okay to respond with something like “Dear disillusioned cultist, if you look at the underlying science, i.e. the math and algorithms, you’ll see that it fundamentally doesn’t even support the capabilities being claimed now and cannot support support the emergent intelligence you so claim. P.S. Please don’t drink the punch at the X-mas party, your employer is almost bankrupt and since it doesn’t want to fold, it has to cut it’s biggest costs somehow …”

4. If the response is just a claim to the contrary with a reasonable argument, such as “your methodology is no better than anyone else’s, and may in fact be worse, as success rates as a whole have not improved and, in fact, for technologies in your hype cycle, have actually gotten worse so you shouldn’t be claiming to be able to provide visionary leadership to tech leaders“, then it’s a perfectly valid comment and question, should not be deleted, and the poster should respond with whatever evidence they have to back up their bold claims. (And if they are just two wild and crazy guys who are all in all just inept strangers in a strange land, so be it! The truth must come out!)

Basically, what we’ve done with your leadership is to just expose the truth about these Big X and Big Analyst marketing and public relation cults, who seem to all subscribe to the “??’?? ?????? ?????, ?? ????????? ??????” mantra, as I’ve had multiple comments deleted by all of them too!

It’s sad, because there are a lot of situations when you should use a Big X for big value, and even though I regularly disagree with the methods and opinions of many of the Big Analysts firms on a regular basis, that doesn’t stop me from calling out everything they publish that is good (and sometimes even thanking them for it publicly) or from calling out their senior analysts who are doing a fantastic job.

(And the comments I made, in my view, were quite humble compared to the ranting I do in opinion pieces on this blog.  As per the about and disclaimers, I target generalities and classes, not specific vendors, solutions, or people. So when I’m discussing particular vendors, solutions, or people, especially in opinion pieces, I try to be as balanced and fair as possible.  And, as per the disclaimers, if factual information is presented to me that I’m not being such, corrections will be made.)

Before You Get All Excited To Learn About Trends for Fall Conference Season

Read SI’s Expose on “Future Trends” from a decade ago, which exposed these “future” trends as artifacts from the past that are polished annually and presented to you on a silver platter.

As per our post last week, with the exception of:

  • Gen-AI being the new fluffy magic cloud
  • Fake-take (sorry, intake) being the new dangerous and dysfunctional dashboards

Very little has changed in the past decade. As a result, do you need to be spending 5K to 7K on a conference to hear the same old, same old that you can read about here on Sourcing Innovation and over on Procure Insights for free?

And if you just want a vacation, take one. You can take a much longer, and better, one if you don’t go to an overpriced conference at an overpriced hotel in the center of an overpriced city.

Procurement Is NOT Hard — But You Do Need The Right System! (Part 3)

At the end of Part 2, we noted that the major problems Procurement folk are having that are causing many to proclaim that Procurement is too complex have been solved for over a decade (and, in fact, there are old grey beards that successfully solved them two decades ago with the right systems, integrations, configurations, and customizations when first generation systems were a lot less capable than today’s third generation systems).

We told you that there were quite a few third-generation true SaaS e-Procurement systems built from the ground up since the 2010s that provide an organization with

  • full visibility and organization wide access
  • full core Procurement process support
  • usability by the average Procurement Pro (and not just tech wizards)

And all you had to do was find one. (There are over 666 Solution Providers out there, many of which have been reasonably well covered here on SI in the Vendor Post Index and Archives.)

To help you with that, you can search the archives for hundreds of posts on what you

But, since the marketing madmen and consulting con-men are playing up the complexity and playing on your fears, hear are a few tips on how to get started on identifying the right solutions from the right vendors for your RFP:

  • start with mapping the essentials of your everyday processes; the 80/20! if you can automate the 80%, you will have the manpower to deal with the fringe cases if the system can’t support them
  • look for vendors with business understanding, not just technical gurus (it doesn’t matter how great they are, if they don’t understand Procurement, how can they build a Procurement system?)
  • look for solutions that not only solve the 80%, but for a vendor that can configure the solution to support and enable the process your people have to do multiple times a day every day while doing the 80%; you can always get consulting help or another system if the 20% is really that difficult, important, or valuable

While the process could be very involved to select the right vendor, the process to narrow down the vendors are not — if the potential vendor doesn’t understand your use cases, can’t show you how to enable them efficiently and effectively (in an improved process that your team members not only can, but want to use), or can’t convince you it’s at least the 80%, roll on.

But trust us when we say the solutions are out there to solve the vast majority of your Procurement problems, and do so in a relatively simple manner. No complexity required!

Advanced Procurement Tomorrow — No Gen-AI Needed!

Back in late 2018 and early 2019, before the GENizah Artificial Idiocy craze began, the doctor did a sequence of AI Series (totalling 22 articles) on Spend Matters on AI in X Today, Tomorrow, and The Day After Tomorrow for Procurement, Sourcing, Sourcing Optimization, Supplier Discovery, and Supplier Management. All of which was implemented, about to be implemented, capable of being implemented, and most definitely not doable with, Gen-AI.

To make it abundantly clear that you don’t need Gen-AI for any advanced back-office (fin)tech, and that, in fact, you should never even consider it for advanced tech in these categories (because it cannot reason, cannot guarantee consistency, and confidence on the quality of its outputs can’t even measured), we’re going to talk about all the advanced features enabled by Assisted and Augmented Intelligence that are (or soon will be) in development (now) and you will see in leading best of breed platforms over the next few years.

Unlike prior series, we’re identifying the sound, ML/AI technologies that are, or can, be used to implement the advanced capabilities that are currently emerging, and will soon be found, in Source to Pay technologies that are truly AI-enhanced. (Which, FYI, may not match one-to-one with what the doctor chronicled five years ago because, like time, tech marches on.)

Today we continue with AI-Enhanced Procurement that is in development “today” (and expected to be in development by now when the first series was penned five years ago) and will soon be a staple in best of breed platforms. (This article sort of corresponds with AI in Procurement The Day After Tomorrow that was published in November, 2018 on Spend Matters.)

TOMORROW

AUTOMATIC CATEGORY IDENTIFICATION

Building on the above, there’s no reason it can’t look at common product / service characteristics from BOMs (bills of materials) and descriptions, find commonalities, and suggest new sourcing/procurement categories that would maximize opportunity and leverage. This is just building on last-gen tech with more encoded human intelligence (HI!), RPA, and (gasp!) math. This is especially useful for identifying when tail-spend should go to 3-bids-and-a-buy tactical sourcing and when mid-tier tactical categories are large enough for full blown strategic sourcing with strategy identification, in-depth market research, multi-round bids and negotiations, etc.

AUTOMATIC PROCUREMENT METHOD IDENTIFICATION

When we are talking about mid-tier tactical sourcing, when a category (currently in the tail) goes beyond a simple catalog / e-comm-like site buy, determining whether it should be a 3-bids-and-a-buy RFQ, auction, or negotiation with an incumbent (whom you have a relationship with in another category or who is currently getting most of the business off-contract) can be automated based on an assessment of current market conditions (supply vs. demand, price trends, category risk, etc.) and encoded Human Intelligence (HI!) on best-practice (and the conditions that tilt one method in the favour of another baed on past savings against similar market conditions). While it won’t be perfect, it will better than most buyers in most organizations will be able to do without deep category expertise and/or a lot of experience in strategy selection and implementation — and more than good enough for an average mid-market enterprise for the majority of their mid-tier spend.

ELIMINATION OF UNMANAGED TAIL SPEND

Tail Spend can be 30% to 40% of spend in some organizations, and overspend (as determined by a variance analysis, market prices across marketplaces, and/or average savings from a 3-bids-and-a-buy RFP or even just a bulk discount on standard catalog pricing) in the 15% to 30% range.

(That’s why so many laggards are getting bamboozled by the new generation of fake-take [better known as intake] procurement applications that make it easy to process requisitions and do one-time buys, because they often see a 10% savings on spend out of the gate and think they are doing fantastic, even when they aren’t. First of all, they are only getting market-price [because they aren’t doing real procurement, which requires a basic level of strategy, and definitely not doing strategic sourcing], which means they are leaving money on the table. Secondly, by not identifying items that should be bundled across requisitions from the week OR managed as MRO / commodity inventory [which can be managed automatically], they are wasting time (and thus money) processing essentially the same requisition over and over [and over]. And so on.)

However, given that we have made great advances in trend analysis, community intelligence, market price intelligence, demand management, market dynamics classification, etc., there’s no reason that, for any tail spend item, the system can’t, with high probability, identify the appropriate methodology for any requisition, which, for tail spend, should include:

  • fulfill from inventory (and auto manage / order the inventory)
  • fulfill from catalog (from contract / preferred suppliers)
  • combine requisitions and fulfill via RFQ
  • combine requisitions and fulfill via e-Auction
  • fulfill as standalone RFQ
  • fulfill as standalone e-Auction
  • promote to a tactical sourcing / strategic procurement category

PERFORMANCE IMPROVEMENT

Procurement is always overworked and under-resourced from a people, capital, and technological perspective, so performance is critical. A great system will increase performance not just along the “cost savings” dimension (as that’s a given with Procurement, whoever said “I have been tasked to spend more” in Procurement), but also along the time, risk, and sustainability measurements.

A great system will monitor utilization and not only allow itself to be configured to minimize steps and effort for everyday tasks through built in configuration capabilities in the dashboards, workflows, rules, etc., but will suggest to the admin changes to configuration, process, or policy over time as the metrics indicate that changes would reduce process time. Process analysis systems already exist, it’s just a matter of integrating them into procurement systems and integrating the analytics necessary to do the suggestions and linking them to the workflow.

But procurement systems aren’t limited to identifying savings opportunities across money and time, they can also identify opportunity across risk if appropriate risk metrics are incorporated (and suggest strategies, suppliers, or products with lower risk) using trend and comparison analytics.

Similarly, they can integrate carbon models and carbon data and identify the (expected) carbon cost of every product or service being considered (depending on whether the data comes from an industry data base, country database, supplier measurement, or third party auditor, will determine how accurate the carbon value is), and identify suppliers or products that would reduce carbon, as well as the cost decrease and/or risk increase of any carbon improvements.

SUMMARY

Now, we realize some of these descriptions are dense, but that’s because our primary goal is to demonstrate that one can use the more advanced ML technologies that already exist, harmonized with market and corporate data, to create even smarter Procurement applications than most people (and last generation suites) realize, without any need (or use) for Gen-AI, that the organization can rely upon to reduce time, tactical data processing, spend, and risk while increasing output and overall organizational performance. It just requires smart vendors who hire very smart people who use their human intelligence (HI!) to full potential to create brilliant Procurement applications that buyers can rely on with confidence no matter what category or organization size, always knowing that the application will know when a human has to be involved, and why!