Category Archives: Procurement Damnation

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!

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.