Category Archives: rants

CLM is Dead! Long Live CLM!

Last month THE PROPHET ran a RIP post for CLM over on LinkedIn where he heralded the demise of CLM.

Which is coming fast and furious for CLM 1.0 and CLM 2.0 because, as we’ve said before, most current CLM solutions are nothing more than a glorified document repository / barebones CMS with a bit of linguistic rebranding, a few customized meta-data fields, maybe a bit of versioning support, and if you’re super lucky, some integrated e-Signature support.

As for the prophet’s suggestions, most of them won’t happen.

CLM absorbed into I2O?

Considering most I2O (Intake to Orchestrate) players still haven’t absorbed a fleshed out working Source to Pay model … not likely.

CLM goes vertical?

The whole point of CLM is horizontal — to get a grip on all of your contracts, not just a subset of them!

Agentic Solutions?

I like my contracts the way I like my maps: ACCURATE!

The best “AI” can do is enhance the productivity you get from a (very) small legal team … it CAN NOT replace it!

GPOs?

Standard terms around pricing DOES NOT satisfy geographic requirements which vary on levels of regulation, compliance, etc.

Clause based?

Ask Icertis and especially Exari how well that worked out for them …

Every other suggestion

Maybe … but all of this is trickier than THE PROPHET lets on!

The reason that CLM doesn’t work, as we noted above, is that the majority of “CLM” solutions on the market are NOT CLM at all. They are glorified repositories with some authoring and e-Signature support … not at all what an organization needs.

An organization needs “lifecycle” management. That’s a heck of a lot more than just drafting, redlining, signing, and sticking in a repository. That’s because contract “lifecycle” management really starts when the contract is signed (whereas most platforms seem to think it ends when the contract is signed).

It’s about automatically extracting the obligations, indexing them, assigning them, tracking them, and making sure they get done.

It’s about extracting the milestones and deliverables, as well as those obligations, and wrapping them in a project plan, assigning the resources, assigning the supervisory chain, tracking them, making sure they get done, and making sure all requirements are met.

It’s about extracting the SKUS, price tables, rate cards, and pushing them into the Procurement systems to allow those systems to perform the right m-way matches and make sure nothing is paid out that wasn’t agreed to. It’s about pulling in the paid invoices for tracking purposes and allowing the contract/relationship managers to track total contract fulfillment.

It’s about ensuring that the right parties are notified when a contract is coming up for renewal, have all the information necessary to make the decision on termination, renegotiation, or allow an evergreen renewal.

And about a whole lot more where VALUE is concerned. Just check out what The Maverick has to say over on Spend Matters.

Why Are You Still Buying That Fancy New Piece of Software That

  • Could Get You Sued?
  • Increases The Chance You Will Be Hacked!
  • Could Result in a 100 Million Processing Error?
  • Could Shut Down Your Organization’s Systems for Days!
  • Helps Your Employees Commit Fraud?

If someone told you this when evaluating a piece of software, and asked if you wanted to buy it, I’m sure the vast majority of you would say HELL NO!

In which case I want you to please tell me, why are you all still riding the AI Hype Train, Buying, and Using Gen-AI everywhere?

It has already resulted in lawsuits and losses!
The Air Canada lawsuit over the Gen-AI chatbot is just one notable well publicized example.

AI systems are AI coded, and AI code has a much greater security risk
as it generates code using training repositories that contain large amounts of untested, unverified, and high risk code — generating code so full of security holes it’s a hacker’s dream! (See this great piece on the ACM on The Drunken Plagiarists.)

AI systems negotiate on the data they have
and with a single decimal point error and you could be paying 10X what you need to. Not to mention, they don’t always translate right. Remember, the Experimental AI DOGE used claimed an 8 Billion savings on an 8 Million contract!

Bad data generated by an AI system and fed into a legacy system with poor data validity checks can shut it down.
Plus, Gen-AI can also push out bad updates faster than any human can and you can easily have your own Crosslake situation!

Now it’s being used by employees to generate fake receipts
that look so real that, if the employee does a few seconds of research (to get the restaurant info, current menu prices, tax code, etc.), you can’t distinguish the generated image from the real thing. And, before you say “Ramp solves this”, well, it only does if the employee is lazy (which, let’s face it, is human nature, so you’ll catch about 90% of it). But what happens when a user strips the meta data which, FYI, can be as easy as taking a picture of the picture … oops! (And if you’re a hacker, running it through a meta data stripper/replacement routine is even easier as you’re just hotkeying a background task.)

AI is good. Gen-AI has its [limited] uses. But unrestricted and unhinged mass adoption of untested, unverified AI for inappropriate uses is bad. So why do you keep doing it?

Especially since it’s now proven it’s worse for you than some illegal drugs! (Source)

Features ARE NOT Applications; But Applications Require Features!

THE PROPHET recently asked What Procurement Tech Product Categories Were Really Just Features All Along? Which is a great question, except he cheated.

He cheated with the first 5!

  • Supplier performance management
  • Supplier quality management
  • Supplier information management / supplier master data management
  • Supplier diversity
  • Supplier risk management (not supply chain risk!)

We’ve known for years it should be one Supplier 360 solution! (Even though no one offers that when you consider all of the elements that should be there. Heck, none of them even offer the 10 basic CORNED QUIP requirements … in fact, good luck finding a solution that offers 5 of those requirements among the 100+ supplier management solutions).

He you cheated again with the next 3!

  • Should cost / cost modeling (for procurement, not design engineers)
  • RFX and reverse auctions (when not bundled with broader capabilities or services)
  • Sourcing optimization

We’ve also known for yours it should be cost-model and optimization backed sourcing (auction, RFX, hybrid, single source negotiation, etc.) … otherwise, it’s an incomplete solution. But only a fraction of the 80+ sourcing platforms offer true optimization (less than 10) and fewer still do extensive cost modelling. (Note that we are focussed on modelling, not cost estimation — that requires data, and that can, and probably should, be a third party data feed.)

And he was wrong on the last front.

Real Spend Analytics should be standalone. Wrapping restricts it! The modules you use should provide all the specific views you need, but the reason that spend analysis quickly becomes shelfware in most organizations today is the same reason it became shelfware 20 years ago … once you exhaust the limits of the interface its wrapped in, it becomes useless. Go back to the series Eric and I wrote 18 years ago (which you can since Sourcing Innovation didn’t delete everything more than a decade old when it had to change servers in 2024, unlike Spend Matters when it did its site upgrade in 2023).

But Very, Very right in that features are not applications!

And very, very right in that too many start-ups are launching today as features (which will only survive if acquired and rolled up into existing applications and platforms), and not solutions. While apps dominate the consumer world, in business there is not always an app for that, and, frankly, there shouldn’t be. This focus on point-based apps is ridiculous. It’s not features, it’s functions. It’s not apps, it’s platforms. It’s not orchestration (and definitely not spend orchestration), it’s ecosystems!

Recent stats, such as those published by Spendesk put the average number of apps a business uses at 371, with an average of 253 for SMBs and 473 for enterprise firms. WHAT. THE. F6CK? This is insane. How many departments does an average organization have? Less than 10. How many key functional areas? Less than 12. Often less than 10! How many core tasks in each function? Usually less than 6. That says, in the worst case, an enterprise might have 72 distinct critical tasks which might need their own application (but probably not). This says that SMBs have at least 3 times the app they should have, mid-size organizations at least 5 times, and enterprises at least 7 times. That is insane! No wonder there are so many carbon copy SaaS optimizers (as we covered in our piece on sacred cows), because if you have that many SaaS apps, you have features, not applications. And you need to replace sets of these with functional applications that solve your core problems.

(And if you want to know how to prevent app sprawl, before buying yet-another-app, ask yourself “is this supporting a function that should be done on its own, or just a task that should be part of an existing function” … if the latter, it’s a feature, not an application, and if the application it should be part of does not have an upgrade/module that supports the task, then you have the wrong application and it’s time to replace it, not pointlessly extend the ecosystem!)

The Best Way to Survive the AI-Powered Apocalypse? Go Old School!

If you’ve been following along, you know that a great purge is coming on two fronts. All the pundits agree on that! On the first front, a large number of vendors are going bye bye, as we’ve been telling you since our first post on the Marketplace Madness. On the second front, they took ‘er jobs. Except it’s not they, it’s AI.

So doesn’t this mean that if you want to survive the days ahead that you should find the most advanced AI provider that isn’t going to get purged in the near future, adopt the tech, replace as much staff as you can with AI, find a way to survive the hardship, and come out ahead when everyone decides that what they have to do?

Well, for the vast majority of the analysts and pundits, it is exactly what you should do — and do it right now. It’s AI overload all the time. And just when most hype cycles start to die down, this one gets a second wind of hurricane proportions.

But, in fact, it’s the last thing you should do. In fact, you should implement a Gen-AI ban and Agentric AI ban immediately, and identify classic ML-powered AI augmented intelligence tech that can supercharge your team, acquire it, and train your team on that immediately. Because you can get the same results as any Agentric AI can get if you employ the right classic ML-powered human-driven AI technology with the right algorithms, analytics, optimization, etc. Sure, a human might be a little bit slower than an algorithm that can work 24/7/365 without a break, but human who is appropriately skilled and trained will make up for this with something the AI doesn’t have, true intelligence.

You see, the thing about Gen-AI and Agentric AI is that it works great until it doesn’t. As per our recent post, Gen-AI is full of problems. In a recent post, we noted that, Gen-AI can:

  • get you sued
  • increase the chance you will be hacked
  • result in Million/Billion-Plus processing errors
  • shut down your organization’s systems for days
  • help your employees commit fraud

And those are the good side effects from its hallucinations. There are much worse side effects that can happen. If you refer back to our posts on the valid uses for Gen AI and the valid uses for Gen AI in Procurement

  • the embedded biases, that you might not even be aware of, could result in decisions diametrically opposed to what you are expecting
  • when it computes two options that are equally likely to generate the same end result for the company relative to the KPI it is using, there’s no guarantee it will select the right option — and there’s always a right option, especially if one option for cost savings is a longer term contract so the supplier can upgrade equipment and the other option is forcing the supplier to cut an already razor thin margin 50%
  • the hallucinations eventually become real, as the systems get so advanced that they not only create super realistic evidence to back up their recommendations, but take over your entire systems in the background so that you don’t know that a web request to verify a claim is actually still being processed by the AI that is now running in the background
  • it starts negotiations and cutting contracts you haven’t even authorized yet
  • it becomes you … and you get blamed for all its mistakes

In other words, ignore the Gen-AI and Agentric-AI technologies that are not the miracle cures they are promised to be. The miracle cures are the last generation ML-based AI technology that was just about to transform your operations under the expert fingers of your leading practitioners, not some probabilistic monstrosity that requires an entire data center to run to generate an output no one verify using a system no one understands. Hone your chops on those and you’ll get the results you need, without having to deal with unexpected, possibly catastrophic, failures along the way.

After all, when we told you about all of the great advancements that were coming in Source To Pay in our classic series (indexed here), none of it required Gen-AI to achieve!

Your Upteenth Reminder That Every Dollar Saved By Procurement Goes Straight to the Bottom Line!

… while 10 cents from every additional sale might make it, if you’re lucky!

A week or so ago, Joël Collin-Demers said COVID was the instigating event that pushed Procurement front and center in a comment to yet another post about the tariff crisis (to which, as I keep saying, the only solution is BTCHaaS), when it was really the (fist) elevating event in over a decade.

The first event that really put ProcureTech on the map was the 2008 financial crisis. This is because companies had to stop the bleeding, fast, and charged Procurement to get ‘er done. But once the markets settled, and the provider base stabilized, and companies willing to spend the money they needed to implement proper tech and get more efficient did so, Procurement kind of faded into the background again. That’s because, when markets rise, and sales rise, the C-Suite focusses entirely on revenue, almost to the point of irrationality, because the faster that revenue rises, the higher the valuation, and the more money they can make on the markets and trades.

However, the 2008 financial crisis is why the M&A and PE activity started to ramp up in ProcureTech in the early teens, because of the importance placed on cost cutting as a result of the 2008 financial crisis. And why, if something else had happened sooner, Procurement would have risen up the organizational chart faster, instead of falling back into obscurity at many organizations who returned undue focus to Sales and Marketing.

This, of course, belies the sad, sorry, state of affairs of North American business that still sees marketing and sales as the key to growth in a shrinking economy (and yes, with birth rates declining in almost all first world countries, it is a shrinking economy) when the real key is cost management. Remember your business 101 equation: Profit = Revenue – Expenses.

This says that every dollar of revenue you add is eaten up by the total cost to acquire that dollar — the total cost of that good or service, which is usually at least 90 cents of that dollar.

However, every dollar of expense you cut is gone in its entirety. Every dollar saved goes straight to the bottom line.

Thus, Procurement is 10 times as valuable as sales! But yet, the marketing madmen will try to hide that from you to protect their multi-million budgets!

So if you want to survive the crisis of the day, whatever that crisis may be, it’s not sales, it’s not marketing, it’s not finance, it’s not executive leadership or vision, it’s Procurement. Plain and simple. Maximize every dollar spent while eliminating those that don’t need to be.

Unless, of course, you are a ProcureTech vendor, in which case, as per a previous post, skip the fairy dust and buzzwords, focuses on your customers pain, and put together some educational materials (marketing and training) that will help them ease the bleeding. If you’ve forgotten how to do that, or never learned, there are those of us who can help you!