Category Archives: Sourcing Innovation

Cutting Edge Tech Is NOT Defined by the C-Suite, …

… Financiers, or the Marketers pushing hype (from the A.S.S.H.O.L.E.) at you 24/7.

Nor is it defined by the algorithms it uses, the software stacks it runs on, or the hardware stacks it makes use of.

Cutting edge tech is ANY and ALL tech that

  • solves one or more significant problems that not being solved by your tech today and
  • does it by automating at least 90% of the tactical data processes that can be automated

It can be based on the latest AI algorithm or twenty year old RPA. It doesn’t matter if it shines a light using a LAMP stack, if it is an edgy MEAN stack, an Austin Powers inspired Grails stack, or even a .NET stack (though the doctor personally shuddered typing those last three caps out). The entire point of enterprise software is to solve your problems.

The point of software is NOT to provide

  • an excuse for a C-Suite to cut his tech-bro buddy a fat check,
  • a new Tulip Market for greedy financiers who think they can score big and get out before the crash, or
  • marketers a platform to pump out pompous poop on a daily basis.

As Mr. Koray Köse penned in a recent piece on LinkedIn on how you are in need of cutting edge technology, the last thing you want to do is take your direction from the VC-pumped C-Levels who do nothing but repeat the marketing garbage they are fed, sometimes changing the baseline of the garbage mid-sentence!

You have to remember:

  • All the VCs and most of the PEs want to create the next unicorn and get rich quick overnight. So most of these VCs and PE firms are pumping huge amounts into companies with little to no product (to support their grand vision that even SAP and Oracle haven’t managed to achieve after 5 decades and trillions of dollars) and directing the majority of that to be spent on buzz-creating sales and marketing (and not real product development). After all, you don’t actually have to create anything beyond buzz to get rich — market crashes throughout history have proven that since Tulip Mania. (What was created there of value? Nothing. But hype made a few men rich and many men poor.)
  • Even though today’s LLMs are dumber than a doorknob (and demonstrate more than any previous generation of the tech that AI should stand for Artificial Idiocy), with performance degrading every iteration (because there is no more data to steal, and the AI engines are now training each other on regurgitated digital garbage), marketers are still taking storytelling to a whole new level (and we mean storytelling because ALL the claims are fake) with a spin that even the Spin Doctors of old would be envious of. (Little Miss Can’t Be Wrong now, right? They want to Make You A Believer so you hand over all your Money when you should Exit … Stage Left and Run To The Hills!)
  • This copy is being pushed onto the C-Suites of all of the other investments in their portfolio with assurances that it’s all true, and being similarly echoed to all of the CXOs that attend the conferences they speak at, the golf outings they are invited to, and the exclusive social gatherings they arrange.

Not one of these groups knows what you need, and two of these groups have absolutely no interest in giving it to you — their interest is all about getting your money, building the hype, inflating the value, and, hopefully, cashing out big before the next hype cycle and/or the inevitable market crash that’s coming.

The technology you need is the technology that is:

  • built with real world problems in mind,
  • tested on real world problems in real companies and proven to deliver, and
  • scalable and extendable to your operations and needs.

This type of tech is built over years and doesn’t use unreliable probabilistic AI at the core. (It runs on traditional, configurable, RPA that is 100% reliable and auditable. Now, this tech might employe AI to help with the configuration by analyzing your systems and processes and self-assessed gap analysis by recommending configurations for you to approve, and that’s okay, because it’s not randomly making decisions, its recommending options and letting you confirm or deny. It might also use SLMs for specific problems where they work a high percentage of the time to jump-start searches, documents, and processes for you, and as long as you retain full control and can accept, modify, or reject, that’s okay too. But everything is built on a solid core, with 100% dependable automation for all key data intake, processing, and pushes that is done without any manual intervention, appropriately calibrated to your business rules, processes, and goals.)

It’s also built slow, rolled out to a small group of beta customers or development partners, and hardened in the field before being rolled out en masse.

And, most importantly, it’s built by a company that is boot-strapped or frugally running on a shoe-string budget from minority SEED investors to get that first version up-and-running successfully in its first 10 customers before that company goes for any VC funding to scale up. A company that has the time to get it right before being under constant pressure to make demanding, if not impossible, sales targets.

Moreover, to have any chance of getting this software, you need to know three things:

  1. how to identify what you need that will form the heart and soul of the RFX,
  2. how to write a good technology RFX and analyze the responses, and
  3. how to identify the right companies to invite to the RFX.

What You Need

For Supply Chain, as Mr. Koray Köse points out, if you need help identifying your true needs and cutting through the noise, he can help you out with that with the eyes of a hawk, the skill of a surgeon, and the wit of a Williams (a Robin Williams). For Procurement, Joël Collin-Demers can slice through your organizational landscape like a hot knife through butter and let you know exactly what you need in priority order.

The Technology RFP

Every consultancy and their mascot claims they can help you here, but you need to be very, very careful.

  • many of their consultants are not technology experts and tend to prioritize features over functions, as that’s all they know
  • many of these firms have partnerships with the (mega) suite players, and you don’t maintain sycophant, sorry, Gold/Platinum/Diamond, status unless you direct a LOT of business their way each year, so they tend to try to fit everyone into one of these buckets
  • many follow the old consulting model of “give the client exactly what he thinks he wants” and don’t take the time to figure out what you actually need and educate you, leading to an RFP that is no better than what you would have written yourself, as they spend half their time questioning you, and the other half writing down your responses

For true success, you need someone who is simultaneously:

  • an expert in the domain,
  • an expert in technology, and
  • not incentivized to help any vendor whatsoever and, preferably
  • an expert in project assurance (but not always necessary)

If you need help writing that ProcureTech / Direct Sourcing/Supply Chain RFP, feel free to reach out. This is my expertise. And for some tips, feel free to start with our recent series on How Do You Write A Good RFP?

Vendor Selection

Very few analysts and consultants know more than a handful of vendors. The big firms focus on the big vendors who cut big cheques, which are the 20-ish same vendors you see in their maps year after year after year. They don’t know about the other 700. Only a few of us independent analysts go far and wide and actually know what is out there and how it can help you.

For ProcureTech, SI should be your first stop. It’s the site that gave you the mega map to open your eyes as to just how wide the playing field is. Moreover, if you need something really niche where the doctor doesn’t have the expertise, he’ll find the right expert to refer you to.

For SupplyChain, Mr. Köse knows a lot of the players. But don’t overlook Bob Ferrari of The Ferrari Group. As one of the original supply chain analysts, he knows all the players and what their platforms can and can’t do inside and out.

And if you reach out to the right experts and get the right help, maybe you can get true cutting edge tech that actually helps you!

In ProcureTech, Stop Caring What Gartner, Forrester, or IDC Thinks!

I shouldn’t have to address this again, but every year multiple vendors reach out and ask how to get on these vendors maps because they believe it’s the only way to get more market visibility and/or be selected by certain customers, including you. It’s not the only way to get visibility and if a vendor can’t convince a potential customer from thinking that only map companies are good, I’ll tell them this right now — that’s not a customer they want (because that vendor will be out on the renewal with whatever vendor overtakes them in the map when the CPO changes in 3 years, because companies without vision to look beyond a meaningless map don’t keep real talent, and only real talent will identify and select the best solution and ensure that solution is kept over time).

But I digress — this post is about you, the potential customer, and why you need to STOP caring what Gartner, Forrester, or IDC thinks.

First of all, we’ve said it before, and we’ll say it again: It’s NOT the Analyst Firm. It’s the Analyst!.

In addition to all of the skillsets and education that an analyst needs to have to get it right, which we covered in detail in that post, the analyst needs a lot of relevant experience, and history in the ProcureTech space, to make sense of the ProcureTech world today. Ask yourself: how many of the analysts with the right education have at least 10 years in our space? The answer is very few. How many have 20 years in (independent) analyst roles? You can count them on your fingers. I know of myself, Jon Hansen, Pierre Mitchell, and Chris Sawchuk with 20 years of (independent) analyst experience in our space and a deep technical (STEM) education. Everyone else who started covering this space day in, day out two decades ago has moved on or retired. Now, of these analysts, how many have also built actual solutions in the ProcureTech space, connecting the dots between the education, theory, and practice? Two of us — myself and Jon Hansen. (But we should note that Pierre and Chris spent part of their careers on solution advisory consulting and implementation guidance, and have deep knowledge about the implementation and integration requirements, which is also very unique and useful in technology selection.)

Now remember the second point: Vendors Have Lured Big Analyst Firms Astray and that you’re not getting a map of the best solutions, but the best solutions from the analyst firm’s pool of vendor sponsors and research subscribers, where the reality is that only the big, established, cash-rich companies can afford the high-priced subscriptions that keep them in front of the overworked analysts who have to spend over half of their time taking inquiries or keeping high paying subscription customers happy. (Whereas analysts at smaller firms or independents get to focus on studying and understanding the solutions, not general inquiries or whether or not the contract [or pricing model] is good.)

This means that these big firm analysts are not spending a lot of time, if any, looking at the up-and-coming mid-sized companies that have not only been around long enough to develop mature enterprise solutions, but solutions that are more modern, more powerful, more usable, and more intelligent (with embedded analytics, RPA, and the right AI for the task at hand), and possibly (much) better for you. Moreover, if the enterprise is a mid-market company, or able to go with a best-of-breed as a bolt-on to their enterprise ProcureTech platform, they’ll never know about the majority of these solutions (as only the overfunded startups will have the money to get the big analyst firm attention, and these vendors often have more financial stability problems than the smaller vendors who are bootstrapping or taking minimal funding and actually have stable, happy, paying customers keeping them afloat).

Third, and most important, it’s not the best rated solution, it’s the best solution for your organization. Not only is it the case that this solution is very likely not on a map of only 20 companies (when there might be 100 companies that offer that solution), but it might also be the case that it is the lowest ranked solution on those maps — especially when these maps tend to rate solutions on a lot of subjective factors that match what the analyst thinks are the most relevant for an average organization, whereas you are a specific organization which has a specific set of relevant factors that you care about, with specific requirements for those factors. The more divergence between your factors and the analysts’, and your scale and theirs, the worse the map is for your needs, and the worse the solution you select will be.

The only maps you should care about are those that rank solutions solely on the tech capabilities and/or the customer rankings. But only so far as potential solution identification, not selection. Maps that concentrate on pure tech (like Spend Matters Solution Map) allow you to identify vendors that have the tech foundations, giving you a starting pool, but don’t allow you to identify vendors that have a solution — because a solution is tech and appropriate process support and integration capability and support and culture and whatever else transforms another piece of potential shelfware into a solution that will be used daily by your employees.

Note that we used the word “potential” for a reason. No map (including Spend Matters) is complete, so you will need to look at multiple sources (like ProcurementSoftware.site and the upcoming Art of Procurement ProcureTech 100) to put together a complete list of vendors to consider. Then you will have to cross reference with real analyst vendor write-ups (which can include the hundreds of write-ups here on this site if one or more of your potential finalists are included) to whittle down that list to the best starting set for your best practice technology RFP (of which we have a lot of advice on how to write that on this site as well).

At the end of the day, it’s about what solution will work for you, not about which solution is on which map!

There Are Best-in-Class Solutions for End-to-End Indirect Sourcing Processes …

… you just have to do your research!

A while ago I posted that your standard sourcing solution doesn’t work for direct (because it doesn’t, and, relatively speaking, very few sourcing solutions do work for direct), and one of the comments I received implied that it doesn’t even work for indirect. And while some of the solutions out there are so minimal / antiquated / poorly designed, it can be considered a fair question (as there are certainly a number of solutions that would never make a recommendation list by the doctor under any circumstance), the reality is that there are lots of solutions that work well for indirect sourcing.

Now, if you are thinking about a best-in-class 7-step sourcing process, then it’s true you might just need on the supplier side:

  • one module for supplier discovery
  • one for extensive supplier qualification from a 360-degree risk, compliance, sustainability, quality, service, etc. perspective
  • one for supplier onboarding and communications
  • one for supplier performance management and development

As well as a sourcing platform that supports:

  • multiple RFX Formats
  • fluid multi-round events
  • strategic sourcing decision optimization so you understand baselines, the cost of business rules, etc.

And possibly a separate best-in-class analytics solution that:

  • lets you dig deep into costs, trends, and outliers

And then an “orchestration” platform that

  • helps you integrate them all so that all data is available in all platforms all of the time

So while you could need as many modules as steps, they exist, and you can build a fantastic solution for your organization and process and get great results. Just don’t expect it from an average suite (that won’t be BiC across the board, will only be tailored for large enterprise, and may only be super appropriate for certain industries). The sheer number of companies in this space (see the Mega Map) means that the odds of you not being able to put together a good solution are small (although it also means that the workload of finding those solutions is quite large, as it takes work to weed through 666 solutions, which is a number that is ruining Procurement, as Joël Collin-Demers indicates).

The lack of solutions for indirect is not the problem, the lack of solutions that not only allows, but can be configured, to enforce a good process is!

More specifically, we are talking about mandatory dual-sourcing! Which, sadly, is still not being done in direct, even though JIT supply chains have been out-the-window at least since Eyjafjallajokull (remember that? it should have been the first push to start properly dual sourcing), with the situation getting progressively worst (on a sometimes daily basis) since March, 2020. (Five years of natural and man-made disasters should be more than enough of a wake-up call, right?)

This is not something indirect has normally done because the view has been “it’s a standard finished off-the-shelf product, I’ll just get it from someone else if I need to“, not recognizing that, for some products, 90% still ultimately come from a single destination country (which is often China) and any disruption to that country (pandemics [as China’s, often impossible, zero tolerance policy will close entire cities for months without any regard to the consequences to the rest of the world], border closings on key land routes, port strikes, and now extremely high [never seen before] tariffs) will jeopardize almost all supply. And for other products, they have chosen a smaller supplier with limited scalability and no nearby options (and resourcing will take time as it will also involve rerouting and ripple effects through the supply chain — and this could also add to cost).

At the end of the day, the platform has to allow you to understand, track, and address your biggest risks, or, as we wrote sixteen (16) years ago (and stand by it to this day), your platform will be your biggest risk because it’s the unexpected that you don’t plan for that kills you, not the expected, no matter how severe.

And while this is not a risk-centric post (as we have written series on that), the largest cause of risk is not natural disasters (even though we are now seeing dozens of major disasters every year, the reality is that most are still localized) or pandemics (while epidemics are increasing, true pandemics still work out to only be a twice-a-century event [although if we don’t step up our global management thereof, the rate will double]), but human generated risks. Stupid humans create more risk and chaos than the planet does!

Despite Attempts to Simplify It, There Are MANY Categories of ProcureTech Solutions

When selecting a ProcureTech Solution, you have all the following buckets:

Function X Classic Type X SaaS Category X Integration
Sourcing
SXM
CLM
Analytics
e-Procurement Best-of-Breed Standalone App
(full function)		 Suite EcoSystem
Invoice-to-Pay Mini-Suite Lightweight App
(task specific)		 I2O Ecosystem(s)
ESG/Sustainability Suite Bolt-On
(extends a module)		 Open API
GRC
Category/Cost Intel
Niche (Legal, Marketing,
Hospitality, SaaS/Tech, etc.)
I2O

And if you do the multiplication, that’s 297 combinations … and that’s just the tip of the iceberg when there are 10 core areas of SXM, multiple niche areas being addressed (some classic solutions were just for print/telco), multiple buckets of risk management solution, generic and scope-3 specific sustainability solutions, different approaches to intake-to-orchestrate, and that’s just addressing the functional areas of Source-to-Pay+.

Then you have the situation where some vendors only offer a single best of breed (BoB) module, others offer a mini-suite, and others still offer a mega-suite with all of the core modules and often a half dozen more on top of that.

While most are SaaS apps these days, they vary from heavy standalone apps that implement full functions to lightweight apps designed for specific tasks (that are usually missing from larger standalone apps that purport to completely cover a function but don’t) to bolt-ons that offer advanced functionality, but require a core module to work on top of.

One also has to consider how you integrate them into a comprehensive workflow that supports Source-to-Pay+. Sometime modules integrate into one-or-more suite ecosystems out of the box (like the SAP Store or The Coupa Store), other times they just come with a (semi) open API, and now some, not built for integration, are integrating into one or more of the new orchestration ecosystems.

And while functionality should come first, you have to consider all of these other factors as well because if you select a suite for a module, you’re probably locking yourself into the other modules you need as those the suite offers due to cost and integration cost considerations, if you select light-weight or bolt-on apps, then you better have something to integrate them into, and you better be sure the ecosystem has all of the modules you will need to implement over the next five years or so before locking yourself into an ecosystem.

So even though THE REVELATOR believes that everything is going to be a bolt-on or an app and that’s all your going to have to worry about, unfortunately the ProcureTech world is NOT going to make it that simple. Overlooking traditional category and integration can completely destroy the value you require if you can’t easily integrate with complementary modules/apps (and especially if you are in a [primarily] direct industry and need to integrate with supply chain applications for the data you need to make good supply chain aware decisions).

However, it will be interesting to see the primary solution category, breadth, and integration of ProcureTech Solutions (by, and independent of, function) in the future.