Category Archives: Procurement Damnation

Have all the Big X fallen for Gen-AI? Or is this their new insidious plan to hook you for life?

Note the Sourcing Innovation Editorial Disclaimers and note this is a very opinionated rant!  Your mileage will vary!  (And not about any firm in particular.)

Almost every single Big X and Mid-Sized Consulting firm  is putting “Gen-AI” adoption in their top 10 (or top 5) strategic imperatives for Procurement, and its future, and that it’s essential for analytics (gasp) and automation (WTF?!?).

It’s absolutely insane. First of all there are almost no valid uses for Gen-AI in business (unless, of course, your corporation is owned by Dr. Evil), and even less valid uses for Gen-AI in Procurement.

Secondly, the “Gen” in “Gen” AI stands for “Generative” which literally means MAKE STUFF UP. It DOES NOT analyze anything. Furthermore, automation is about predictability and consistency, Gen-AI gives you neither! How the heck could you automate anything. You CAN NOT! Automation requires a completely different AI technology built on classical (and predictable) machine learning (where you can accurately calculate confidences and break/stop when the confidence falls below a threshold).

Which begs the question, have their marketers fallen for the Gen-AI marketing bullcr@p hook, line, and sinker? Or is this their new insidious plan to get you on a never-ending work order? After all, when it inevitably fails a few days after implementation, they have their excuses ready to go (which are the same excuses being given by these companies spending tens of millions on marketing) which are the same excuses that have been given to us since Neural Nets were invented: “it just needs more content for training“, “it just needs better prompting“, “it just needs more integration with your internal data sources“, rinse, lather, and repeat … ad infinitum. And, every year it will get a few percentage points better, but if it gets only 2% better per year, and the best Gen-AI instance now is scoring (slightly) less than 34% on the SOTA scale, it will be (at least) 9 (NINE) years before you reach 40% accuracy. In comparison, if you had an intern who only performed a task acceptably 40% of the time, how long would he last? Maybe 3 weeks. But these Big X know that once you sink seven (7) figures on a license, implementation, integration, and custom training, you’re hooked and you will keep pumping in six to seven figures a year even though you should have dropped the smelly rotten Gen-AI hot potato the minute you saw the demo (and asked them for a more traditional enterprise application they can deliver with guaranteed value).

So, maybe they aren’t misled when it comes to Gen-AI. Maybe they are just shrewd financial managers because it’s their biggest opportunity to hook you for life since they convinced you that you should outsource for “labour arbitrage” and “currency exchange” (and not materials / products you can’t get / make at home) and other bullsh!t arguments that no society in the history of the world EVER outsourced for. (EVER!) Because if you install this bullcr@p and get to the point of “sunk cost”, you will continue to sink money into it. And they know it.   Or do they?

In our view, the sad reality is that while one or two financial managers may have gone deep enough down the Gen-AI rabbit hole to figure this out, most of them likely just don’t see the downside for them or their clients.  Given all the hype the creators of these Gen-AI* models are pushing, with prolific examples only of success cases and upside, with very little education on the realities (because few of us are highlighting all of the risks of Gen-AI and failures when misapplied), maybe all they are seeing are promises that are just too good to ignore.

So, please, ignore the Gen-AI until you’ve validated a use case and instead remember When You Should Use Big X. Every solution and services provider has strengths and weaknesses. Please use them for their strengths, be successful, and increase the project success rate. (Post-Edit: As of 2024, technology project failure is at an all-time high. We don’t want to see any more of it!)

*Remember that AI, and Gen-AI in particular, is a fallacy.

Don’t Zip Through the Zip-sponsored Spend Matters authored Intake and Procurement Orchestration RFI, Part 4: Project/Process Management

… because, as we noted in Part 1, while it looks great on the surface, in our space, looks can be deceiving and what you get may NOT be what you want. (And you’ll have to read this full series to find out if it’s good, bad, both, or neither.)

Post Edit: The summary on LinkedIn has been removed. You can read why in the Social Media Policy. See this post for Zip Solution Coverage.

In Part 1, we discussed how Zip issued a public challenge to check out their RFI (making it irresistible to the doctor who has been rallying against vendor RFIs since they first hit the scene big time with Procuri’s 2006 releases, how the doctor had doubts that this would be the first RFI to get it totally right, and how it was starting off with five strikes right off the bat (observable from a first quick read … but that we would review it in detail because there could be value in it if used and/or referenced appropriately (either for self-education and/or a foundation for a larger, wider evaluation effort) and only a fair, detailed review would surface that. So, this is what we are concluding g with the 14 Shared elements organized into the categories of “Configurability”, “Integrations”, and “Analytics”.

In Part 2, we tackled Intake: the strengths, the weaknesses, and the not so-obvious weaknesses.

In Part 3, we tackled (core) Orchestrate: the strengths, the weaknesses, and the not so-obvious weaknesses.

Before we begin our discussion of the Project/Process Management capabilities that are needed to take the offering beyond a pay per view of YOUR data and more solution sprawl (not less), since you don’t want to be asking where’s the beef after adopting a solution, we will remind you that there are some fundamental capabilities that are necessary that were specifically called out in part 35 and part 38 of our 39 Steps … err Clues … err Part Series on Source to Pay.

Sadly, there aren’t any in this RFI. There are only shared capabilities that cross between intake-and orchestrate in the configurability, integrations, and analytics sections. This means that there is no coverage at all of:

  • project management beyond task and workflow management — there should be extensive support for phases, milestones, obligations, and distributed management of hierarchical projects in construction, commissioning, and other projects that require multiple projects to be synched between multiple service providers
  • KPIs — critical for project and process management requires that there be native support
  • project and process templates — to allow workflows to be preconfigured through system drag-and-drop
  • dynamic project and process shifting — if the situation changes, the type of sourcing / procurement / contract / etc. project might need to change; and it should be a seamless transition, with all appropriate data, settings, etc. automatically transferred into the new structure

With respect to what is covered for shared requirements in the RFI, the following are quite weak:

  • configurability beyond workflow — it’s not just the workflow, it’s the data model as well, for example
  • data type data feed integrations — the platform should understand the different types of data it will be processing and support unknown integrations
  • m-way integrations — as indicated above, processes are not always simple and restricted to two systems
  • real analytics — pre-configured simple out-of-the-box reports are NOT analytics; the power of multi-system multi-source data integration and orchestration is the insightful analytics it can power

However, the following are some strengths of the RFI.

  • workflow configurability — mentions parallel approval support, escalation paths, conditional logic, and no-code editing
  • multiple workflows — and automatic assignment on procession initiation
  • in-flight workflow adjustments — workflows should be capable of being upgraded or reconfigured at any time (without breaking anything)
  • ERP integrations — ERP is never going away, and even if it’s not used for any core procurement processes, it is still used to support the supply chain and the true power of intake-to-orchestrate is beyond S2P
  • collaboration — S2P is about collaboration — through whatever platforms the organization uses, including Slack, Teams, etc. in addition to the S2P tools the organization tools
  • integration monitoring — the platform should monitor integration status, including the last access/synch with every data source, the synch schedule, and system response time

Overall, the overlap is ok, but the support for project and process management assessment is almost nonexistent in the RFI. As per our last post, it is clear the focus of the RFI was intake, not orchestrate, and a whole section needs to be added on project and process management — especially when the true value of intake to orchestrate is going beyond just taking requests and managing S2P solutions to support end-to-end project and process management beyond S2P and upstream into the supply chain and through finance downstream to sales.

SUMMARY

At the end of the day, it’s a good foundation to educate yourself on what intake solutions in S2P should functionally do and how to compare them in a consistent manner, but it’s not nearly enough to evaluate intake-to-orchestrate solutions.

It’s also a good foundation upon which Spend Matters could build an intake-project/process management-orchestrate Solution Map if they addressed all of the points in the last three articles, fleshed out the necessary capabilities more, and refined the scale.

However, it’s certainly not enough to evaluate a provider’s suitability for your organization, as partially pointed out in Part 1. First of all, it doesn’t address all of the capabilities that you are likely to need in a solution. Secondly, as hinted in part 1, it’s not just the functionality, it’s the capability of the platform to support your processes — that’s not just functionality. Thirdly, once you confirm the tech meets baseline (and trust the doctor when he says that multiple platforms will), you have to go beyond the tech to whether or not they will enable YOUR organization with the processes YOUR organization needs with the systems YOUR organizations uses with interfaces appropriate for YOUR people and whether or not they custom integrate new solutions on an ongoing basis for you, be available on your working hours, support the languages of the third parties you need to work with, or culturally be a good fit for your organization. And that’s just the baseline requirements for a good solution RFI — which will always need to be customized to your business.

Don’t Zip Through the Zip-sponsored Spend Matters authored Intake and Procurement Orchestration RFI, Part 3: Orchestrate

… because, as we noted in Part 1, while it looks great on the surface, in our space, looks can be deceiving and what you get may NOT be what you want. (And you’ll have to read this full series to find out if it’s good, bad, both, or neither.)

Post Edit: The summary on LinkedIn has been removed. You can read why in the Social Media Policy. See this post for Zip Solution Coverage.

In Part 1, we discussed how Zip issued a public challenge to check out their RFI (making it irresistible to the doctor who has been rallying against vendor RFIs since they first hit the scene big time with Procuri’s 2006 releases, how the doctor had doubts that this would be the first RFI to get it totally right, and how it was starting off with five strikes right off the bat (observable from a first quick read … but that we would review it in detail because there could be value in it if used and/or referenced appropriately (either for self-education and/or a foundation for a larger, wider evaluation effort) and only a fair, detailed review would surface that. So, this is what we are continuing, and this post will focus in on the 10 pure Orchestration elements organized into the categories of “General” ad “Source-to-Pay”.

This follows Part 2, we tackled Intake: the strengths, the weaknesses, and the not so-obvious weaknesses.

Before we begin our discussion of orcehstration, we should note that there are some fundamental requirements for orchestrate, as outlined here on SI in our 39 Steps … err Clues … err Part Series on Source to Pay, and they were specifically called out in part 35 and part 39.

With respect to the core requirements, the RFI doesn’t (explicitly) call out

  • self-serve integrations — no system will integrate with everything out of the box (not even close to be honest) and you will often need to create and manage your own integrations
  • low-code integrations — the average person who will need to do the integrations will not be a technical coder
  • workflow automation — the whole point of orchestration is configurable rules-based automation, so the workflow automation needs to be highly configurable
  • data stream automations — it calls out non-S2P integrations, but doesn’t specifically call out data stream — sometimes third party data is way more relevant than third party applications
  • data model discovery — it’s more than data harmonization, much more

So those are some obvious weaknesses.

There are also some not-so-obvious weaknesses in the RFI when you dive in deep.

  • multi-dimensional integrations — not just bi-directional between S2P systems, but also between third party data feeds and the ERP to support complex data management and harmonization requirements
  • full-fledged data management — not just harmonization as discovery, harmonization, and enrichment are all important
  • orchestration S2P is more than just punch-out, vCards, supplier onboarding, contract risk, and events — for procurement, there’s also federated catalog management and (other) payment method integration; for sourcing, there’s also services and direct event support (not just indirect buys); for supplier management, it’s way more than onboarding — it’s relationship, compliance, risk, and performance management; for contracts, it’s the award through the negotiation to the execution management (not just supporting an e-filing system); etc.

And, of course, as with intake, there are some strengths in the RFI.

  • integrations for orchestration — it’s not just integrating for intake, it’s integrating for process management
  • orchestration protocols — sometimes part of a process has to be completed within a (legacy) application; there should be support for smooth process handover and user login to the application, as well as handover back to the orchestration application and user transition back when the process is completed
  • contract risk — explicitly called out shows there is an understanding that proper contract management is more than just an e-filing cabinet and an orchestration platform for S2P should support the more important aspects

Overall, it’s okay, but not great as it is clear the focus of the RFI was intake, more thought needs to be put into the orchestration core, and the orchestration core fleshed out more to truly evaluate how good a solution is — especially when the true value comes from going beyond S2P, even if it’s just allowing Procurement to understand the upstream and downstream ramifications of a decision.

So what about the shared capabilities between intake and orchestrate? Do they improve the overall RFI? We’ll tackle that in Part 4.

Don’t Zip Through the Zip-sponsored Spend Matters authored Intake and Procurement Orchestration RFI, Part 2: Intake

… because, as we noted in Part 1, while it looks great on the surface, in our space, looks can be deceiving and what you get may NOT be what you want. (And you’ll have to read this full series to find out if it’s good, bad, both, or neither.)

Post Edit: The summary on LinkedIn has been removed. You can read why in the Social Media Policy. See this post for Zip Solution Coverage.

In Part 1, we discussed how Zip issued a public challenge to check out their RFI (making it irresistible to the doctor who has been rallying against vendor RFIs since they first hit the scene big time with Procuri’s 2006 releases, how the doctor had doubts that this would be the first RFI to get it totally right, and how it was starting off with five strikes right off the bat (observable from a first quick read … but that we would review it in detail because there could be value in it if used and/or referenced appropriately (either for self-education and/or a foundation for a larger, wider evaluation effort) and only a fair, detailed review would surface that. So, this is what we are starting, and we are beginning with the 27 Intake elements organized into the categories of “Breadth of Demand Requests/Intake Management”, “Routing and Task Assignment”, “Tracking and Progress Monitoring”, and “Approvals and Stakeholder Evaluation”.

Before we begin, we should note that there are some fundamental requirements for intake, as outlined here on SI in our 39 Steps … err Clues … err Part Series on Source to Pay, and they were specifically called out in part 35 and part 37.

With respect to the core requirements, the RFI doesn’t (explicitly) call out

  • a portal — if you don’t have an application that can be used as intake, then you need to build a portal anyone can access
  • support for project management — procurement should be supporting projects, that can’t be overlooked (which is why SI prefers to discuss intake-project-orchestrate as a category when it actually discusses intake & orchestrate)
  • specific support for budget management — and if you want to support procurement and finance (which should be one of the goals of orchestration, right?) it should!
  • policy tracking and management — one of the biggest issues that users have with procurement systems and processes and policies is that they don’t know where they are, or understand them, and/or know how to comply with them quickly and easily (and those are the reasons that procurement is always bypassed, ignorance and understandable laziness — they don’t know and they don’t want to put in the effort to learn archaic systems and processes just to order a laptop or do their job); there is an entry on compliance, but it has to go beyond to policy identification, enforcement, guidance, and explanation; and there is an entry on general procurement requests, but they may or may not be policy related; moreover, it has to go beyond just procurement policy to any relevant policy that would come into effect as a result of a procurement under the policy
  • no explicit support for direct procurement — not all intake / orchestrate applications can support direct, so this cannot be overlooked

So those are some obvious weaknesses.

There are also some not-so obvious weaknesses in the RFI when you dive in deep.

  • no core intake for data augmentation & analytics — the most powerful application in any enterprise space is one that can manage, augment, and analyze data to find new insights; this cannot be overlooked
  • routing is not just application and approver routing, but also requester — some requests will be team efforts (especially if you start branching into direct) and the team members will need help coordinating their efforts to complete the project in a timely manner
  • progress monitoring needs to be dynamic and support status monitoring of parallel workflows — not all processes are linear

But there are also some strengths in the RFI.

  • intake is different for procurement/sourcing, supplier, and contracting, and this is well recognized
  • intake needs to support life-cycles and adapt to the nature of the request, and request lifecycle management is explicitly called out
  • guided buying is explicitly called out, removes the most common excuses for platform avoidance (too hard to use, needs specialized training that is forgotten if the platform is only used occasionally, takes too long to fumble through it)
  • makes it clear that intake needs to adapt to function (but should go beyond just procurement, which should also be included in not-so-obvious weaknesses)
  • makes it clear that updates should be available in (near) real-time, or at least capable of being requested in (near) real-time
  • makes it clear that workflows need to be collaborative (or there’s no value in them beyond the existing tools)
  • calls out resolution/dispute management — which is a common need in Procurement that is not always adequately addressed by other systems

Overall, we’d say the ZIP sponsored RFI is adequate for intake. It’s not great, as there are some core requirements that aren’t covered. But it’s not bad, because, especially for indirect and services, it has some strengths and covers the core reasonably well.

So how does it do on orchestrate? We’ll tackle that in Part 3.

Don’t Zip Through the Zip-sponsored Spend Matters authored Intake and Procurement Orchestration RFI, Part 1

… because while it looks great on the surface, in our space, looks can be deceiving and what you get may NOT be what you want. (And you’ll have to read this full series to find out if it’s good, bad, both, or neither.)

Post Edit: The summary on LinkedIn has been removed. You can read why in the Social Media Policy.  See this post for Zip Solution Coverage.

Zip issued a strong encouragement to check out their newly sponsored Intake and Orchestration RFI, authored by Spend Matters, noting that there’s nothing that will get you smart faster that checking out how this tech works under the hood (Source) because it would take the guesswork out of your evaluation process (Source) and allow you to choose the right intake and procurement orchestration with confidence (Source).

Zip should not have issued a public challenge because the doctor has a very hard time refusing them considering he has been ranting and raving against vendor RFIs for almost two decades (since not long after Procuri# started the craze back in 2006 where they issued FREE templates for e-Sourcing, Supplier Management, Contract Management, and Spend Analysis (each with their own dedicated domain to make them look independently developed, especially since they added service provider or Procurement [but NOT source to contract] logos on the sidebar). These free templates, as has been stated many times, not only made them Procuri look, good, but better than the peers you would evaluate them against, whether or not they actually were. Since then, the doctor has NEVER found an RFX in our space written/sponsored by the vendor that doesn’t favour the vendor, or even one that is actually good as a foundation for provider selection*.

In other words, the chances of Spend Matters and Zip creating the first RFI that would allow for firm-appropriate unbiased vendor selection is pretty low, but that doesn’t necessarily mean that they couldn’t (although the doctor is going into the review doubting it) or that the RFI wouldn’t have any value if used and/or referenced appropriately (either for self-education and/or a foundation for a larger, wider evaluation effort). After all, used appropriately the Spend Matters Solution Maps are highly valuable (as you know that you are evaluating vendors that are apples-to-apples on the core functionality, know that they are all technically likely to meet your needs, and can focus on all of the other requirements of the provider). However, this means that a very careful, independent, third-party evaluation is needed to analyze the efficacy of the map being handed to you.

Especially when there are a number of easily identifiable strikes right off the bat.

  • Sole Sponsored: this means that Spend Matters would have analyzed Zip (which is one of the first “intake” to “orchestrate” vendors they covered) heavily as the foundation for building their RFI (as Zip would expect every aspect of their solution to be analyzable); so while the analysts would do their best to be unbiased, some unconscious bias will creep in
  • Forrester Scoring Scale: the scoring scale is 1 – 3 – 5; presumably this was done to allow for some room for interpretation or “half” points as “whole” points, but there are three major problems with the Forrester scale
    • it has been grossly misused to evaluate tech by people who don’t understand tech (in one of their reports, a vendor was given a 5 for software architecture if it was done in house, 3 if part of it was done in house and the rest was built on top of a third party architecture, and 1 if it was done by a third party, which is, well, WTF? who does it has NOTHING to do with how good a software architecture is)
    • it presumes there is a “best” capability that cannot be beat, which is not the case if vendors are still innovating, and could only be the case at the point the RFI was written and only IF the analysts had seen every solution on the market (which is doubtful); there is a reason scales in Solution Map only defined functionality to a “4”, some vendors kept innovating and this allowed that to be captured without needing to update the Solution Map more than every two years
    • it presumes that there is enough information for average buyers to accurately score; given that even analysts needed training and clarification before they would all score Solution Map 99% the same (even though every element was very explicitly defined, first scoring passes by new analysts were often only 90% as they often needed deeper technical explanations of requirements and/or more insight on how to question vendors to get the right answer), how likely do you think it is that buyers with limited technical solution knowledge are going to score solutions the same even if they understand what the seller is offering?
  • Intake Heavy: 49% pure intake, 30% intake-slanted (requirement could be in an intake or orchestrate RFI, but very intake-slanted); 21% orchestration; while this is not bad if you are looking for an intake solution, it is bad if you are looking for an orchestration solution, which is what you should be looking for; the doctor has explained in multiple posts how intake has no value on it’s own (including a deep take in point 11 of market madness where the doctor explained that intake is just pay for view on your data [and why should you pay to access your data]); moreover, intake is NOT new as many P2P solutions (especially those that are based on or support catalogs) have had intake built in since day 1, and Zycus released the first stand-alone intake solution [for its suite] called iRequest back in 2015; and there’s no beef (and it’s always important to ask where’s the beef) … and just adding orchestration alone doesn’t create value (because if you only buy modern applications with Open APIs, you can integrate them all directly upon purchase and not have to pay yet another license and maintenance fee for yet another app)
  • Orchestration Light: while implied by the last point, this has to be called out because the only value from intake-to-orchestrate comes from going beyond just integrating standard Source-to-Pay modules at touch points and either extending into the supply chain or enterprise, adding workflow capability not previously possible across product and service life-cycles, and/or enabling data modelling and analytics not (easily) doable with current applications — there’s one element for beyond S2P (except for, of course, the ERP backbone), workflow coverage is baseline, and analytics is defined as simple “reporting” … not nearly sufficient to capture what orchestration should be and should do
  • Focused on “DOES” and not “ENABLES: the RFI was clearly modeled after solution map which is great for allowing side-by-side comparison of solutions based on their support for certain technical functions, which may or may not be relevant for your organizational needs and does a great job of comparing how relatively advanced multiple solutions are but doesn’t tell you whether or not they will enable YOUR organization with the processes YOUR organization needs with the systems YOUR organizations uses with the interfaces YOUR people, and their TQ, can understand (and, of course, no hints at all on how to evaluate whether or not the provider can support you, custom integrate new solutions on an ongoing basis for you, be available on your working hours, support the languages of the third parties you need to work with, or culturally be a good fit — you know, all the important things when selecting a solution)

Not the best of starts, especially when it’s three-strikes-and-you’re-out in baseball, but still there could be deep educational value in the RFI itself and maybe it’s a good starting point for solution comparison (or, better yet, a Spend Matters solution map module).

So, in the next three parts of this series we will evaluate each part of the RFI: Intake, Common, and Orchestrate and then give our verdict.

# Procuri was one of the first Source-to-Contract vendors that was acquired by Ariba in 2007, and then Ariba was acquired by SAP in 2012. (Also, before the RFIs, they published an 84 page book back in 2004 on Driving Business Performance with Strategic Sourcing, edited by Randy Glasbergen. ISBN 0971859841, Library of Congress Control Number 2004112419, and ASIN B000MZKZB2 if you want to track it down.) [And yes, the implication is that the doctor would expect the ZIPpy@ Procurement Handbook to be the next publication from Zip.]

* Yes, the doctor did author the Source-to-Contract Solution maps AND the common foundation for the Source-to-Pay Solution Maps while he was at Spend Matters, but these were NOT for provider selection — the purpose was to identify which vendors were relevant to shortlist in your RFI process (which should consider considerably more than the tech, but the point was to evaluate the tech alone because that is the one thing that most Procurement departments ARE NOT equipped to properly evaluate, while providing an overview of unbiased customer ratings through an aggregate score).

@ Assuming zippy (P.1, P.2) doesn’t violate a trademark of Rainbow.