Category Archives: Market Intelligence

2025 Is Just Another Year … But Is It All Doom and Gloom? Part 2 (Real Tech!)

As per our first instalment, it all depends on your point of view and whether you are willing to look beyond the hype, buckle down, and get the real job done.

For instance, just the following five technologies will eliminate 95% or more of your tactical sourcing, procurement, and supplier monitoring work — and all you have to do is find them, properly implement them, and use them. Let’s talk about them briefly.

Real DIY Analytics

The ability to analyze the data you want, when you want, how you want, enriched and augmented using the auxiliary data you want … and not in predefined dash-boards or hidden “AI Agents” which may, or may not, do the analysis you want (and need) … cannot be underestimated! Real value comes from ad-hoc analysis and investigating hunches, abnormalities, and trend changes when you discover them; not days, weeks, or months later when the “cube” has been refreshed, and it might be too late to correct a problem or capture an opportunity!

Remember, this is not 2005, this is 2025, and there are at least half a dozen great DIY (spend) analysis solutions that will do most of what you want, for a price tag that is a fraction of what you might expect, and if you are okay with full DIY, some of these start at a price you can put on a P-Card. For example, Spendata Classic (which can handle data sets up to 5 Million Rows) can be obtained for $699 a year, and Enterprise, which can handle data sets up to 15 Million records, which comes with unlimited use for 5 users (and view licenses for more), and some consulting and setup, starts at an amount that will surprise you. (You can still put it on a P-Card if you pay monthly.) And there is literally nothing you can’t do in it if you’re willing to apply a little elbow grease. It truly is The Power Tool for the Power Analyst.

(Strategic Sourcing Decision / Supply Chain Network) Optimization

Yes, it’s math. But you know what? Math works! And when you use deterministic math, it’s 100% accurate, every time! And it’s one of only two technologies in S2P+ that was been proven (by multiple analyst firms) to repeatedly identify 10%+ savings year-over-year (but since this was pre-COVID and pre- the 47th, we need to amend this finding to adjust for inflation and tariffs). And as an FYI, the other technology was NOT AI. (It was proper DIY spend analysis. Only Human Intelligence can intuit where to look for previously unidentified opportunities, the best AI can do is just follow a script and run standard analysis. Furthermore, the thing about spend analysis is that an analysis that identifies an opportunity only helps you ONCE — once you capture the opportunity, the analysis is useless. You need to do a new, and different, one.)

Rule Based Automation

When you think about most tasks across Source to Pay, most of them are just execution of simple, easily defined processes — most of which don’t require much (if any) intelligence and, thus, don’t need AI (and shouldn’t use an unpredictable AI agent when you can encode a process that gets it right, guaranteed, every single time. (Plus, the way you want to source, buy, pay, track, manage, etc. is probably a little bit different than your peers, and who knows how the AI Agent would do it for you. You certainly don’t!)

With rule based automation, you can easily execute an entire sourcing event in the background all the way to award if you like. It can run auctions, it can run multi-round RFPs with detailed feedback (it’s all calculations, response comparisons, and decisions on what data you want to share and how blinded you want it), it can run analyses and optimizations, it can calculate recommended award decisions subject to the constraints and goals that matter to you, present that to you for acceptance, or, if it’s a simple winner take all or top 2 situation, create the award automatically, send it out, get supplier acceptance, assemble the contract, and send it for e-Signature. You don’t need Agentric/Gen-AI, just tech we’ve had for over a decade!

Machine Learning

Now, when it comes to Enterprise Master Data Management and Administration (E-MDMA) and Invoice Processing, it can be quite a lot of work to keep up with the mapping, cleansing, and enrichment rules, and you don’t want to have to manually define all the new rules every time a new data element appears or a new invoice format arrives, especially if the system can auto-detect/”guess” 90% of the time through rule re-use and generalization. With machine learning, the system can keep track of your corrections, mathematically extract models, and adjust it’s rules to handle the new mapping again automatically as well as improve its suggestion logic when it doesn’t know what to do — increasing the chance that you just have to “accept” a new rule vs. defining it from scratch. (Unlike Gen-AI which just tries to find similar patterns somewhere to present you with something that may or may not have any correlation to your business and even reality!) And we’ve had great non-(pure-)Neural Network machine learning that works great with enough data for decades! Predictive analytics was making huge progress late last decade before this Gen-AI BS took over and could have helped Procurement departments automate 90%+ of what they wanted to automate with just a bit more development and effort by the leading vendors — it just required a bit more time, money, and focus. (Gen-AI has set us back a decade!)

Analytics Backed Augmented Intelligence

We don’t need machines to make decisions for us (especially when they can’t think, or even reason), we need machines to do calculations for us that help us make the right decision quickly and effectively. We need the machine to automatically identify and retrieve all of the relevant data, do all the relevant situational and market analysis, do all the predictive trend analysis, identify all of the typical responses with respect to the situation, predict the likely success of each, and present us with a set of ordered recommendations, complete with the calculations and supporting analysis, so we can pick one or realize that the machine didn’t/couldn’t know about a recent event or a human factor and that none of the responses are right (and that only we could craft one, with full information on the situation). The machine may not think, but the thunking it can do far exceeds our computational ability (billions of computations a second, all flawless), and that’s EXACTLY what we should be using the machine for.

If we give up on this Artificial Intelligence BS (even if the current models are right, machines need to be 100 Million times more powerful for it to even “mimic” human intelligence. That’s not happening any time soon) and instead just give all the machines all the (boring) grunt work, leaving us free to do what they can’t (strategy and relationships). If we do so, we can be at least 10 times as productive as we are now and deliver on the promises Gen-AI / Agentric AI / AGI never will, and do so at a small fraction of the cost. And oh, we have that tech today … we just need to deploy and integrate it properly!

And this is just the beginning of what you can do when you look beyond the hype and use your Human Intelligence [HI!] to cut through all the BS.

2025 Is Just Another Year … But Is It All Doom and Gloom? Part 1 (Find Out!)

So now that I’ve myth-busted all the trends and predictions, told you yet again that AI won’t save you, told you that all the upbeat “influencers” are just dreaming (and should get back to reality and spend a few more years, or decades, in the trenches), that things aren’t going to rapidly and magically change, and popped all of your bubbles of joy (because they were all fake), what should you do? Should you just crawl back to the dungeon in the Tower of Spend that they’ve locked you in?

No. Just because the hype is all fake, the talent is scarce, the budget isn’t what you hoped, the risks are worsening, and your stress levels are at an all time high, that doesn’t mean all is lost, that all tech is fake, that you can’t find talent, that you can’t do something with the budget, or that you can’t manage the worst of the risks.

It just means that you have to

  • look beyond the hype,
  • identify talent outside the norms and do more with less,
  • realize that not all solutions are overpriced or unaffordable,
  • need to identify which supply disruptions will cripple you and which risks are most likely,
  • keep calm and carry on,
  • roll up your sleeves, and
  • be ready to use your Human Intelligence (HI!).

Look Beyond the Hype.

As we’ve told you time and time again.

  • AI won’t save you
  • Gen-AI won’t help you do anything that is not essentially (large) document (collection) summarization
  • You can’t turn it all over to the machine

This doesn’t mean that

  • you can’t use tech to do most of the boring, tactical, drudgery that you are doing now,
  • you can’t use automation to improve your productivity, or that
  • you can’t use AI to improve your decisions and outcomes.

It just means that you can’t expect that these solutions are the magical big read easy button silver bullet solutions to all your problems that the vendors are promising, regardless of what fancy words they use. (Always remember that AI really stands for Artificial Idiocy and you will do so much better in tech selection, especially when Gen-AI is involved, because hallucinations aren’t a feature, they are a function of the underlying model!)

The reality is that if you stop looking for Artificial Intelligence, which doesn’t exist (and definitely don’t fall for AGI), and start looking for Augmented Intelligence, then, if you are willing to look hard, you can find some really good solutions. As we pointed out in our recent article on You Don’t Need Gen-AI to Revolutionize Procurement and Supply Chain Management — Classic Analytics, Optimization, and Machine Learning You have Been Ignoring for Two Decades Will Do Just Fine!, if you pick the right technology for the task, you can get great results.

For instance, just five technologies will eliminate 95% or more of your tactical sourcing, procurement, and supplier monitoring work. In our next instalment, we’ll talk about what they are and how they will change your life!

For Procurement, 2025 Will Be … A Year.

That’s it. And that’s all folks!

You want more? Even though we just did a 12 part series that was myth-busting 2025 2015 Procurement Predictions and Trends?

Wow! Either you are an unwavering dreamer or a sucker for punishment!

In addition to every major trend and prediction being a straight-forward copy of last years’, where only the cool tech has changed (name), every prediction that goes too far from the norm will prove to be, as always, dead-wrong. 2025 is just a continuation of 2024 (but worse), which was just a continuation of 2023, all the way back to 2020 (which was just 2019 to the nth degree thanks to COVID-19). Except now we have more disruptions caused by the return of the 45th as the 47th who, on his whims or the whims of his Billionaire buddies, will revive a whole host of disruptions to throw at you that you hoped you were done with years, or decades, ago. (Enjoy tariffs! Enjoy sanctions! Enjoy closed borders! And that’s just the beginning. They have to Make America Great Again at any cost! [Just remember, it’s their definition, not necessarily yours.])

But here’s a few more points we need to address.

1. This won’t be the year of Outcomes.
Why? Because every year is the year of “Cost Savings”. Costs keep going up. Risks keep going up. Competition keeps increasing. Sales keep staying flat (or falling) because of constantly decreased buying power in the working class. And investors are demanding ever increasing profit margins. There’s no room to focus on anything else as far as the C-Suite is concerned. (Because, as we pointed out, they only care about short term profits. Long term thinking was thrown out the window over three decades ago.)

2. AI Agents won’t save you.
Why? Simply put, they are dumber than doornails, and you need real Human Intelligence (HI!) to solve today’s Procurement problems. But we all know that the more tech appears to accelerate while competition races costs to the bottom, the faster it’s experimented with. And we mean experimented with. Many organizations will try, and even buy in, but when these solutions start failing, the tech will be abandoned and organizations will back of from tech until the next tech craze solution hits the market.

3. Apprenticeships won’t reappear.
Why? Because organizations won’t pay for training, and that’s paying an employee to learn and a senior employee to mentor. While it is the only way to save certain professions in North America, the lack of foresight up until now should tell you that there’s just not enough foresight to bring this back en-masse, which is what is needed. (In other words, you may see these reappear in a few select enterprises as a counter to DEI programs that were abused and recently terminated, but they will be the exception and not the rule, and not likely to stick around.)

4. The coming M&A surge cycle won’t help you, even though it will be the biggest in two decades.
Just like a rose by any other name would smell as sweet, a heaping pile of bull manure will smell as sh!tty. And with the over-investments likely to occur at its peak, it’s just going to drive the prices up on rather mundane solutions … while pushing likely better solutions out of business as they won’t have the funding to cut through the surge of marketing BS that is going to peak after these companies get huge cash influxes. (Because the tech and Procurement focussed founders of the better solutions, who are problem solvers and not snake oil salespeople, can’t hype their story as much as the savvy sales people and former CEOs who will manage to sell solutions with very little substance using their ability to smooth talk until the investment sounds sexy [even though a sober look would show it’s not a 10, but a 01]).

5. The new leaders being instated across the free world won’t save us and definitely won’t bring a new golden age to Procurement!
(They will bring a Guilded Age to trump the one a century ago, and since there is no Roosevelt on the horizon to save us, that is a very bad thing.)
Considering all they are interested in doing is lining their pockets and those of their Billionaire friends while still pretending trickle on economics, sorry, trickle down economics, is a good thing, fat chance. The best we can hope for is that they don’t start WW III.

In other words, it’s another year of hardship for Procurement, just like every year in every Procurement Manager’s history. Same struggle, just a different name for the problem and the tech of the day.

Myth-busting 2025 2015 Procurement Predictions and Trends! Part 12

Introduction

In our first instalment, we noted that the ambitious started pumping out 2025 prediction and trend articles in late November / early December, wanting to be ahead of the pack, even though there is rarely much value in these articles. First of all, and we say this with 25 years of experience in this space, the more they proclaim things will change … Secondly, the predictions all revolve around the same topics we’ve been talking about for almost two decades. In fact, if you dug up a Procurement predictions article for 2015, there’s a good chance 9 of the top 10 topic areas would be the same. (And see the links in our first article for two “future” series with about 3 dozen trends that are more or less as relevant now as they were then.)

In our last instalment, we continued our review of the 10 core predictions (and variants) that came out of our initial review of 71 “predictions” and “trends” across the first eight articles we found, in an effort to demonstrate that most of these aren’t ground-shattering, new, or, if they actually are, not going to happen because the more they proclaim things will change …

More specifically, we began our discussion of the 10th prediction … AI.

AI continued

We began our discussion by noting that this was the only prediction where the visionaries were not in synch, and that the predictions ranged from continued adoption to adaption to analytics enhancement to seamless integration to true advancement in underlying technology, and with the exception of continued, mostly unbridled, and definitely unresearched, adoption, they are more-or-less all off the mark.

As for adaption, most vendors don’t understand the technology they’ve embraced well enough to properly adapt it for Procurement needs, especially where Gen-AI is concerned. So “adaption” will be limited.

(Gen-AI is fundamentally good at only two tasks:

  1. summarizing large documents
  2. creating natural language responses to queries based upon a large data archive

If your task can’t be fundamentally reduced to one of those two tasks, then Gen-AI is NOT good for the task!)

As for analytics enhancement, a few of the smarter vendors who understand the true power of traditional AI solutions (based on ML and automated reasoning) will look for ways to use AI to enhance analytics for better results, which are easily obtainable given the increases in computing power and explosion in readily available (verified) (third party) data sources, and those that do will get better results across the spectrum of applications for predictive analytics in Procurement.

Seamless integration is a ways off. The current level of integration, especially around Gen-AI, is quite choppy and most of the results are (much) worse than not using it. We’ve spoken to a number of vendors who integrated Gen-AI since (potential) customers wouldn’t even speak to them unless they had it, only to hear that those same customers wouldn’t buy the solution unless they could “turn it off” (where it is the “Gen-AI” they insisted they needed). All of the “orchestration” vendors think Gen-AI chat-bot integration for Procurement is cool. But it’s not. For example, it currently takes up to ten times as long to use a Gen-AI chat-bot to complete a requisition in a well designed e-Procurement system than to use an expertly designed catalog.

Take a simple example where you want medical gloves. In Gen-AI, you’ll have a process something like the following when interacting with “Gormless”:

  • Hey Gormless, I need some medical gloves.
  • … 5 to 15 second wait while it processes …
  • “OK Gary. I can help you with that. Do you want latex, polyvinyl, polyethylene, neoprene, cryogenic or surgical.”
  • The same ones I always order you Gormless idiot. Nitrile!
  • … 5 to 15 second wait while it processes …
  • “Sorry Garry. I had those classified under dentistry. Do you want small, medium, or large.”
  • The same ones I always order. Large!
  • … 5 to 10 seconds while it processes …
  • “OK, Got It. Now, do you want 50 packs, 100 packs, or 500 packs.”
  • I want 1000, whatever packaging is cheapest.
  • … 5 to 10 seconds while it processes …
  • “The 50 packs are cheapest. Do you want 20 of those.”
  • Cheapest per box? Or per unit?
  • … 5 to 15 seconds while it processes …
  • “I don’t understand Garry. The 50 packs are $10; The 100 packs are $18; The 500 packs are $85”.
  • The 500 packs, Gormless.
  • … 5 to 10 seconds while it processes …
  • “Got it. Two 500 packs. Do you want same day shipping for $29.99 or next day for free?”
  • Next Day is Fine.
  • … 5 to 10 seconds while it processes …
  • “Ok. You want two of the 500 packs of nitrile gloves, next day shipping. Shall I place the order?”
  • Yes, Gormless. Place the f6cking order please!
  • … 5 seconds while it processes …
  • “The f6cking order has been placed. Your F6cking Purchase Order ID is 984567.”

In an integrated and properly indexed catalog with a traditional search bar and priority sorting based on order history and preferred suppliers, you will:

  • open the catalog with a single click on the icon
  • type “large nitrile gloves” in the search bar and press enter
  • see, with pictures, images of all options in priority order, with the ones you always order first
  • click on it, see you have 3 options, with an already calculated cost per unit
  • select the “500 pack” option by entering “2” units next to it and pressing “buy it now”

You’re typing 3 words, 1 number, and clicking submit four times and you’re done in 15 seconds. Not 3 to 5 minutes of explaining your simple request to Gormless, the Artificial Idiot.

And this is just one example where trying to integrate state-of-the-art AI technology just to keep up with the hype train is making ProcureTech worse instead of better. So seamless integration is still quite a ways off!

What Should Happen? (But Won’t!)

1. Fuck Gen-AI.

As per our previous series, there are almost no valid uses for Gen-AI and very few valid uses for Gen-AI in Procurement. As we have indicated in previous posts, what Gen-AI is good for, and the only thing Gen-AI is good for, is massive text processing, summarization, and natural language query response generation to natural language queries. It’s only accurate with high probability, for non-critical decision support only, only when there is enough verified data for training. And then only of it is properly used by an expert who can identify when it makes a mistake (which it will do regularly). But any use that does not reduce to document processing and natural language response generation from natural language text blocks, in a manner where the response will be reviewed by a human before a decision is made (because accurate with high probability means it makes mistakes ALL THE TIME), is inappropriate.

2. Embrace Point/Function ML-based Predictive Analytics

With enough good, verified, numeric data, these algorithms, which have been researched, refined, and verified for decades, produce great results with high, known, confidence (compared to Gen-AI where the confidence is never known). (With enough data, the confidence can be 99%.+ Guaranteed. For many simple classification tasks, Gen-AI struggles to produce 70% accuracy. And that’s a good scenario!)

3. Embrace (Strategic Sourcing) Decision Optimization

As we’ve noted in previous entries, this technology has produced great results for almost 25 years, but yet the majority of organizations have not yet adopted it when it should be used, at least to generate a baseline, in every sourcing (and logistics) scenario! Moreover, it’s not just limited to cost optimization, it can also optimize carbon/GHG emmissions, delivery times, risk, or any combination of with the right data. It’s a value-generating life-saver for any organization.

Just remember. If you want true advancement, let us remind you that the majority of advancements in “AI” technology over the last seventy years (and you read that right, 70 years because “AI” is not new and has been under active research for over seven decades, with the first program generally considered to be “AI” written in 1956) has taken close to two decades to be ready for industrial use. Gen-AI still needs at least another decade (if not more) to reach the reliability we need to depend on it for critical use. Right now, as the disclaimers say, it can, and will, be wrong way more often than you think.

So while the focus on “AI” will continue, the focus should back off from experimental technologies unproven in Procurement when we have existing analytics, optimization, and ML-based predictive analytics that, in the right hands, with good data, can achieve results that many would organizations would consider a miracle. Leave the experimental stuff to the research labs and the creative teams, who aren’t impacted if what is generated is totally useless, as the creatives may still be able to use the useless garbage as inspiration.

Myth-busting 2025 2015 Procurement Predictions and Trends! Part 11

Introduction

In our first instalment, we noted that the ambitious started pumping out 2025 prediction and trend articles in late November / early December, wanting to be ahead of the pack, even though there is rarely much value in these articles. First of all, and we say this with 25 years of experience in this space, the more they proclaim things will change … Secondly, the predictions all revolve around the same topics we’ve been talking about for almost two decades. In fact, if you dug up a Procurement predictions article for 2015, there’s a good chance 9 of the top 10 topic areas would be the same. (And see the links in our first article for two “future” series with about 3 dozen trends that are more or less as relevant now as they were then.)

In our last instalment, we continued our review of the 10 core predictions (and variants) that came out of our initial review of 71 “predictions” and “trends” across the first eight articles we found, in an effort to demonstrate that most of these aren’t ground-shattering, new, or, if they actually are, not going to happen because the more they proclaim things will change …

In this instalment, we’re again continuing to work our way up the list from the bottom to the top and ending with “AI”.

AI

“AI” is the only “prediction” or “trend” that would not have appeared ten years ago. (Ten years ago it would have been “analytics”, the favourite precursor technology.) There were 10 predictions across the eight articles, and this was the only category where they were not in synch (because the technology, as well as the usage thereof, is not only still evolving but not well understood). Given the vendor hyper-focus on AI (and especially Gen-AI) over the past few years, it is yet another “prediction” or “trend” that is not new, as we are still in the (over)hype(d) cycle, but one that should be adequately addressed as it’s where we have the biggest gap between expectation (pushed by the vendors and the analyst firms and the consultancies) and reality.

Before we go any further, here were the ten predictions from the articles:

  • Advancements in AI and Automation
  • AI: overhyped or underestimated?
  • AI and The Digital Transformation Revolution will Continue
  • Artificial Intelligence in Procurement
  • Automation and Artificial Intelligence
  • Digital Transformation, Automation, and AI
  • Focus on AI Talent in Procurement and Skill Upgrading
  • From AI adoption to AI adaption
  • Integration of AI and Advanced Analytics
  • We’ll Evolve from AI Adoption to True Integration

They range from continued adoption to adaption to analytics enhancement to seamless integration to true advancement in underlying technology, and with the exception of continued, mostly unbridled, and definitely unresearched, adoption, they are more-or-less all off the mark.

The analyst firms are still overhyping this technology to the max (despite continuing to publish studies that 85%+ of technology projects fail)). At least six (6) in seven (7) vendors are overhyping (Gen-)AI to the max, if not nine (9) in ten (10). The Big 3 (Google, Microsoft, and, of course, “Open”-AI) are promising miracles for all who adopt their technology. It’s being marketed as the ultimate panacea, the magic elixir of your dreams, and the silicon snake oil that actually works (among other things). And when you combine the facts that most people don’t have the mathematical and technological background to understand what a given “AI” technology is and, as Bertrand kindly pointed out, humans are biologically wired to be lazy, most are happy to close their eyes, cover their ears, sing “la la la la la la”, and buy in to the BS promises hook-line-and-sinker. So, whether the technology is right or not (and we’ll give you a hint, it usually isn’t), they’ll buy it. (And then blame the vendor when it fails to deliver, who will blame the consultant for improper implementation and training.)

So how accurate were these predictions? Did any hit the mark? Come back for Part 12!