Because if we don’t, no one else will!

What am I talking about?

As per last Wednesday’s article, PROCUREMENT STINKS and we just can’t deny it anymore. In a nutshell, and this is just the tip of the garbage heap:

1. Case studies are ranker than expired fish in a microwave on high.
2. Approximately 85% of companies are AI-washing everything.
3. The Gen-AI claims that it will deliver Procurement to the enterprise are FALSE.
4. Intake/Orchestration is totally useless on its own.
5. Consultancies are often more in the dark than the Procurement departments they are claiming they can help.
6. DEI is being misused to push agendas and sometimes to Do Extra-legal Initiatives,

But this isn’t even the worst of it!

THE REVELATOR recently conducted a poll on who do you trust, and the results were more than a little disturbing as far as I am concerned.

That’s right. Only 50% of practitioners trust analysts to help them make the right decision when selecting technology. 36% would rather a consultant, who likely has a very strong incentive to either recommend a preferred partner solution (where they are guaranteed to get the implementation contract) or the solution that requires the most implementation effort (to add months, or years, to the engagement), and, even worse, 14% would rather trust a marketer or salesperson, who gets paid for leads or sales, not for solving a customer’s problem!

As far as the doctor is concerned, anything less than 75% is appalling. While he will happily admit there are some independent consultants at smaller firms without vendor partnerships who will be truly objective and will offer valuable advice, this is not the norm at most of the larger firms that are preferred partners or implementation providers for the bigger players in our space (where the majority of consultants reside), so the fact that the consultant trust is so high is a little off-putting. However, he’s simply aghast at the fact that 14% would rather trust a salesperson or a marketer for solution advice. Frankly, this means we are definitely failing the market.

Basically, if we can’t be the unbiased experts and independent voices of reason that the Procurement practitioners can always trust for good, unbiased, advice, then what good are we?

So what can we do to regain the trust? the doctor is sad to say he’s not exactly sure and hopes that

• some other analysts will echo the call to action to deal with the PROCUREMENT STINK,
• analysts will collectively take the lead in cleaning it up and restoring our reputation, and
• offer up suggestions on what we can do to make it better!

Now, while the doctor doesn’t have all the answers, he does have suggestions on where we can start.

1. Be fully transparent on whom we do and don’t include in maps and logo charts, why, and the business situation in which our recommendations are, and are not, relevant.

This is quite obvious, and most of us are getting pretty good at being very explicit about the inclusion requirements for our maps and studies, but we don’t always take the time to clarify what this means for the market and, more specifically, which types of organizations the reports and maps are targeted at, which types of organizations will get the most value, and, most importantly, which types of organizations are unlikely to get any value because they don’t fall in the size/verticals/etc. the map or report is targeting. As far as the doctoris concerned, now more than ever we need to double down and get it right on both sides of the equation — who is being included, and why AND who should, and should not, be reading the report, and why, when we release something to the market. (Like the doctor did with his mega map.)

2. Stop glamourizing hype cycles and start busting them when there is no perceivable value to Procurement.

Procurement is supposed to be about solutions that deliver enterprise value, not cool technology. Leave that to the Consumer Electronics Show. When we promote tech for the sake of tech, we’re not helping anyone. We need to promote solutions to business problems with measurable ROI, regardless of what the underlying technology is. It’s irrelevant how many vendors embrace Gen-AI, when it has yet to demonstrate even a single use case that offers value beyond traditional tech, and the majority have failed to deliver any value.

3. Stop taking our cues from vendors as to where the space is going and start leading vendors to where the space should be going.

For example, intake-to-orchestrate is the craze, vendors are popping up faster than rabbits in a carrot field, and it’s likely only a matter of time before we see a map covering the intake-to-orchestrate space. (Especially since the doctor has been led to understand that one major analyst firm is already considering such a map, and where one leads, others will follow.)

However, in the doctor‘s view, this SHOULD NOT happen. Because, as stated above, and explained in detail in our article on why PROCUREMENT STINKS, there is NO VALUE in intake/orchestrate on its own. NONE. Intake is nothing more than pay-per-view on your data and orchestrate is just pure SaaS-based middleware, and middleware is something we’ve had for decades (and the need for such is negated completely if all the applications you use have complete, open, APIs as they can then be connected directly). The only value in these offerings would be in any additional functionality they embed to enhance the value of the applications they are linking together so that 1+1=3.

It would be understandable if they all embedded additional functionality that was comparable, valuable on its own, and formed a new application category that made sense to evaluate separately. However, right now, many don’t embed sufficient functionality; those that do are, for the most part, not comparable (as they all tend to specialize in something different, such as easy self-serve Procurement, services management, statements of work, etc.); and there has been no application thereof that wasn’t designed to enhance, or, most of the time, just make existing applications accessible. A standalone map would be senseless. (Instead, the intake and orchestrate requirements that are necessary for success should be included in the definition, and measurement of, Procurement, Sourcing, Supplier Management and other existing applications that can deliver enterprise value.)

3b. Start calling vendors out on bullsh!t when they start chasing, or putting, cool tech before practical solutions with actual ROI.

Privately at first (of course), unless the vendor insists on marketing it through a bullhorn. Then we may have no choice but to publicly call them out on it. Vendors may not like it, and may get upset when we burst their tech-centric bubble, but we’re not helping anyone when we don’t. Not us, not the procurement professionals we claim to support, and definitely not the vendors if we don’t try to dissuade them from throwing good money after bad on tech that won’t solve actual problems and ultimately won’t sell once their potential clients see the lack of value that comes with the price tag. This space has always been about ROI, we need to remind vendors of that, and guide them to where the ROI is just as we guide the practitioners. We need to be helpful to both sides to mature the space.

the doctor‘s not sure it’s enough, but it’s a start, and if other analysts make an effort to figure out how to restore our reputation, maybe we’ll find the answer, provide the unparalleled value that only we can provide, and get back the trust we should have.

Thoughts?

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.)

Why aren’t you bothered by the smell?!?

If you haven’t been following along, we’ll lay out the top six reasons for you.

1. Case studies are ranker than expired fish in a microwave … and you don’t seem to care.

As per yesterday’s post, Have We Been In The Dank Basement So Long That We Don’t Care If the Fish Stinks?, we’re accepting that case studies are now nothing more than meaningless marketing mush and not even saying anything.

2. Approximately 85% of companies are AI-washing everything.

And the majority of these solutions don’t have any AI, or at least don’t have any native AI and are reliant entirely on questionable AI integrations. AI is hard. Really f6ck1ng hard. It’s not something you whip up overnight, especially if you want a solution that addresses a real problem with a real solution with any reliability. Before the Gen-AI craze, the doctor spent almost two decades here on Sourcing Innovation (and six years on Spend Matters) trying to educate you on the value of (strategic sourcing) decision optimization (SSDO), advanced (predictive) analytics, and proper targetted machine-learning AI that could provide better projections than the majority of “experts” — and the handful of vendors (and he means handful) that had this technology because, at any one time, we’ve never had more than half a dozen or so true SSDO vendors, a dozen or so true spend analytics providers with best-in-class technology, and more than 1 or 2 companies out of every 10 with true AI (and none with AI for more than a few targeted problems, but sometimes that was all you needed to identify extremely significant pockets of value and savings). Now, all of a sudden, we’ve gone from less than 20% to 85% literally overnight, when true AI advances have traditionally taken decades? Not f6ck1ng likely! Not only is AI a buzzword (as pointed out by Sarah Scudder), but it’s a delivery mechanism which, FYI, is a method by which the virus spreads itself.

3. Gen-AI claims that it will deliver Procurement to the enterprise are false.

It will deliver Procurement somewhere, but not the enterprise, unless the enterprise is code for Purgatory or Sheol. Gen-AI, which stands for Generative AI, literally means “AI that makes stuff up“, and, more specifically, since it’s trained to please, it makes stuff up that it thinks you want it to, not stuff that’s true, safe, or even legal. It’s NOT trustworthy, and won’t solve your Procurement problems. And while it may be a bit better at creating natural language responses, we’ve had Natural Language Processing (NLP) commercially for almost two decades, and a few vendors built very good, very reliable solutions, that will provide you with a significantly better chatbot than yet another custom variant of “chat, j’ai pété“. (There are no valid uses for Gen-AI that can’t be accomplished better, faster, and cheaper with existing tech.) [FYI, we blame the AI vendors who are pushing one side marketing here, and not the Procurement Vendors and Consultancies who fell for it.  If you don’t get both sides of the story, how can you form a good opinion?]

4. Intake / Orchestration is totally useless on its own.

There’s always a bandwagon we have to deal with, but rarely do we have two competing, often overlapping, equally useless bandwagons to deal with, with intake-to-orchestrate now speeding towards the cliff almost as fast as Gen-AI. As we discussed in Marketplace Madness, the days of pure intake-to-orchestrate are numbered because:

• Intake is Pay Per View on YOUR data. Why are you paying for another view into your data?!?
• Orchestrate is Solution Sprawl. It’s adding to the problem it purports to solve.
• Intake-to-Orchestrate is Where’s the Beef? Sure you’re integrating everything and getting visibility into everything, but that’s not Procurement — which is identifying and strategically managing spend. So if the platform isn’t doing that, why not buy a platform that is that supports intake-to-orchestrate natively and allows you to manage strategic spend for risk reduction and savings???

5. Consultancies, purporting to help you, are often more in the dark than you are!

Big X and Mid-Sized Consultancies, which followed the money into tech, and then followed the money into Procurement, did so without any knowledge of where they were going or what was at the end of the yellow brick road, expecting to learn on the way. While some of the firms had good knowledge of Procurement from an operational or logistics perspective, they generally had little knowledge in tech and even less knowledge on the ProcureTech landscape (and most would be challenged to name 66 vendors, yet alone the 666 companies in the Sourcing Innovation Source-to-Pay+ Mega Map). And while some rolled up their sleeves, kicked off their shoes, and dug in until they got it, others still have no clue how to differentiate the vendors that purport to offer the same (set of) module(s) and determine which one is best for you … and, as a result, all they end up doing is recommending a “best-in-class provider” for which they are a preferred implementation partner (which usually happens to be one they picked from a Market Map, all of which give THE REVELATOR a migraine and the doctor anger management issues because meshing 6+ dimensions on an axis and/or putting a roll-up interface on top of the map that no one understands only adds to the confusion).  [It’s up to you do differentiate the good from the bad, know when you should be using Big X and mid-sized consultancies, when you should be using niche firms and independent experts, and when you should still be doing your homework and understanding your problem before even engaging anyone!  Otherwise, the failure is on you!]

But it’s even worse than this … many of the mid-market and smaller specialist consulting firms don’t have any more knowledge than the Big X  and larger mid-sized consultancies beyond the vendors they have personally worked with. the doctor is sad to say that he’s been talking to quite a number of them and has yet to find one that has a methodology for identifying third party solutions beyond hiring true expert consultants and practitioners with decades of solution (related) experience. And while you will get a good solution from one of their consultants (as they are hand picked by people that know what they are doing), there are two problems here for you:

• you won’t necessarily get the best solution because the consultant won’t know about it
• if that consultant retires, which is inevitable as the consultants with the cross-role and industry experience to get this right are closing in on three decades of experience (because you need practitioner/developer, manager, integrator, and consulting experience), and are, thus, a decade or less from retirement, will her replacement be as good?

and two problems for the firm:

• when the leaders retire, will there be anyone with the necessary depth of knowledge to take their place
• with not enough senior people to fill the roles relative to the large number of companies that need digitization and Procurement transformation, how will they scale and grow?

It’s too bad that, unlike the next generation of Procurement Providers (like Zip, who realized they needed a Head of Research in-house to help identify what their market was looking for so they could develop the right solution), it would appear that none of these consultancies have realized that they need an internal consultant to keep tabs on the market and help them not only manage technology partners, but qualify the solutions and figure out which clients those technology partners are most appropriate for, so that they can ensure the success of both their clients and their technology partners (and be the consultancy of choice for that partner who will prioritize their deals because they are confident the consultancy vetted the potential client before dangling a “deal” in front of them). (Or, if they are just starting to think about the issue, realize that they can’t just give an existing consultant this role as the background required is different than that of the consultant who works with the clients day-in-and-day-out.)

(FYI: the doctor is not the only one thinking this or saying this, although me might be the only one willing to state it publicly. He’s talked to a number of growing technology solution providers in our space that literally have “consulting” firms tripping over each other to be the provider’s “partner” as a result of the downturn many of these consultancies are experiencing [as qualified by THE PROPHET in his piece on the Consulting Bloodbath], but many of these consultancies are unable to qualify what unique value they would bring to the provider or joint clients [since that first requires understanding what the provider does, how it overlaps with what they do, how that intersection overlaps with what their customers actually need, and being forced to sell, they don’t have time to do all that research]. What these consultancies are failing to understand is that providers who are offering real, sometimes almost immediate, value with their SaaS solutions are getting a lot of traction in this down market and don’t have time or personnel [due to budget cuts when the funding taps turned off] to chase poorly qualified deals or deals with little or no profit for the provider. So when all the provider saw in the past from some of these consultancies was poorly qualified deals, they are wary of working with the consultancy that didn’t take the time to understand the potential customer, the necessary solution, and what the hot provider actually did.)

6. DEI is being misused to push agendas and, in some cases, commit fraud!

DEI, which was supposed to be about “equity” (which is supposed to be “fair” and “impartial” and “freedom from bias or favouritism”, as defined by the Oxford and Webster’s dictionaries), somehow became all about “equitable outcomes“^*, and now that is being used to push agendas and, sometimes, commit outright fraud as we have numerous examples of not only universities, cities, organizations, and countries mandating a lead Procurement role be filled by a minority (whether or not any exist with the required qualifications), but sometimes firing the person in the role to place a more junior person into the role under the guise of “DEI” so that the leader can ensure that all Procurements go his way (which can include purchases to organizations he is invested in, or gets campaign funds from, and so on). The most recent example is the city of Chicago, with the ramifications laid bare by THE PROPHET in his recent article on Why Would Chicago’s Mayor Fire Its Top Procurement Executive and Bring in Someone With a Fraction of the Experience?

^* which is not at all equitable because that is not “fair”, “impartial”, or “free from bias” when you insist a minority be hired; equity is supposed to be about “equitable opportunity”, but apparently no one in DEI knows how to use a dictionary anymore

Now that you understand this, why are you putting up with it? Why aren’t you demanding more? You have every right to demand more, and you should be demanding more of your vendors, consultants, and Procurement leaders!

Because if you don’t, The Prophet‘s April Fools Day joke on how we must #EndProcurement might just become reality!