Category Archives: Technology

STOP PAYING PROCURETECH/FINTECH ADVISORIES A DOLLAR JUST TO LOSE THREE DOLLARS!

Last week, in our post where we asked if ProcureTech Generated Billions While Practitioners Lost Trillions, we noted three things:

  1. Approximately 1.8 Trillion Dollars (more than the annual GDP of 92% of the countries on Earth) will be wasted this year on Tech-Related Spending
  2. Approximately 600 Billion Dollars will be spent with the big consultancies and analyst firms who do Financial (Technology) and Procurement (Technology) consulting and advisory
  3. That’s three dollars lost for every dollar spent on big consultancy and advisory firms

So how do you stem the bleeding? Especially if you can’t STOP spending mooney on tech advisory because you can’t stop spending money on technology because you can’t survive in today’s digital world without it?

You STOP forking over (high) six and seven figures without a guaranteed return! In other words, unless they save you some coin, then your money they will not purloin!

More specifically, if they are promising outcomes, then (the majority of) their compensation should be 100% dependent on outcomes. If you don’t make bank, then their compensation will tank.

To be even more precise, don’t buy:

  1. any technology platforms where the majority of compensation is tied to successful sourcing events, transactions, etc.
  2. any GPO services unless it’s 100% outcome oriented
  3. any functional outsourcing unless the majority of compensation is tied to ROI

Now, the technology providers and consultancies will push back, steadfastly claiming that their technology and services are worth way more than they are charging, but here’s how you counter:

  1. you will pay a base annual fee for the platform that will cover 150% of their base hosting costs, so they won’t lose, and then a percentage of transactions, identified savings through sourcing events, contract value, etc. where the percentage is calculated such that if you save 100% of their promised savings, they will make 50% more than what you would pay on a fixed cost after negotiation — if they are so confident in their claims, this should be a no-brainer
  2. you will pay a fixed amount on each transaction, calculated based upon the expected savings before you sign the contract, and if they can deliver the savings, you will definitely be using them regularly — and, as with the Tech Provider, you will calculate this so that they win bigger than if you pay them a fixed cost IF they generate a return for you
  3. you will pay a fixed rate per hour that is enough to cover the assigned personnel cost (their salary plus 30% overhead), and any compensation beyond that will be dependent on the department delivering an ROI beyond a certain amount (which is the amount required to cover the basic fee you are paying them); and again, you’ll fix the compensation such that if they deliver 100% or more of what they promise, they will win big too

Now, you’re probably saying the doctor is daft by telling you to offer them 50% more than what you’d have to pay on a fixed cost basis if they deliver, but here’s the reality, without incentive, THEY WILL NOT DELIVER!

There is an 88% technology failure rate across the board, and 94% failure rate if it’s a (Gen-) AI project. The reality is, as we pointed out in our series on how, even if they have good intentions in the beginning, your (technology) vendor will screw you, the vast majority of systems fail to deliver, because, once the contract is signed and you have access to the system, they have zero incentive to do anything else for you.

Similarly, once they have you on a multi-year contract, why should the GPO or consultancy have any incentive to go beyond the minimum? If you want them to continually serve you and look for ways to generate a return for you, make it worth their while. And then you won’t be paying them one dollar just to lose three dollars in return!

This is where you start. Then, you question any consulting contract over 100K to 200K as a mid-market and 1 Million as a large global enterprise. At that point you have to define the value you expect and what gain-share agreement you are going to craft to ensure it.

Breaking Down the Risks: IP/cyber attacks

The risk of cyber-attack and IP theft over digital domains is constant and high and not going away. Not much need to be expounding the pounding on this one, but we will and give you a few tips on reducing the risk.

Expounding the Pounding

Cyberattacks remain high. Incredibly high. In 2014, a high year for cyberattacks, a NetIQ (acquired by AttachmateWRQ) Cyberthreat Defense Report found that 71% of organizations were affected by a successful cyberattack in 2014 (while only 52% expected to fall victim again in 2015). ( Source )

In 2024, North American organizations experienced an average of 1,298 cyberattacks per week, according to Check Point Research, which represented a 55% year-over-year increase in attacks. These attacks affected over 70% of of small to medium-sized businesses, according to Embroker. In other words, despite the continued increase in security software, standards and protocols, cyberattacks haven’t decreased, and neither have their success rate.

Reducing the Risk

Procurement is going to have to finally embrace cybersecurity best practices in everything they do as well as work with IT to ensure that all of the applications they buy or license meet these best practices as well.

Note that when we say best practices, we don’t just mean ensuring the technology meets all the latest specs, but that the organization, and its personnel, also ensures that they they take information security, operational security, and physical security seriously as well. An organization that doesn’t protect its information outside of systems is insecure, and if this includes passwords, the systems have been compromised with one login attempt. An organization that doesn’t maintain proper physical security makes it easy for an experienced hacker (who understands social engineering) to walk in, access a system that is logged in, extract the access keys for the broader systems, and the organization’s systems are then completely accessible by a hacker. And of course, if the organization doesn’t maintain proper operational security, its employees will let hackers right in no questions asked and all of the systems will be compromised.

This will require proper training and monitoring until everyone understands the issues across the entire organization.

The Sourcing Innovation Source-to-Pay+ Cascading Mega Map! (2026 Edition)

(c) 2025-12-15

Still useless, but still slightly less useless than every other logo map that clogs your feed!

1. Every vendor offering verified as of 4 days ago!

2. Every vendor logo is clickable!

3. Every vendor is mapped to a meaningful category as of the last date of analyst investigation!

So what’s the point?

To again make it utterly clear you can’t select a vendor based on a random grouping of logos on a map, even if they are categorized!

Not even if the map categorizes the vendors by market size, industry, and/or geography. Those are just proxies for organizational spend, solution needs and cultural requirements. And not every mid-market manufacturing plant in the USA is the same.

The only way to select a good vendor is to follow a proper assisted process and engage an expert who understands what vendors are out there to identify the right vendors to invite to the RFP process once your true needs have been identified.

Especially considering the true number of vendors out there is many times more than what an average big analyst firm will tell you, especially when they restrict their recommendations to their paying clients in their maps, and multiples of what an average big consultancy will tell you, that only knows their partner solutions (that they need to maintain significant focus on to maintain their preferred partner status).

So let this be proof that there are a lot of logos and that, if you want logos, you got logos! 666 of them!

Please see the V2 Edition for the actual cascading Mega Map.

Does ProcureTech Generate Billions While Practitioners Lose Trillions?

A couple of weeks ago, THE REVELATOR, in his AI Whispering asked Why does the ProcureTech solution side of the table make billions, while the practitioner side loses trillions (and more)? And it’s a fair question. Because even though the practitioners don’t lose trillions on ProcureTech and ProcureTech consulting (as that’s only in the Billions), they DO lose Trillions on Tech and Tech Consulting that the ProcureTech Consulting and ProcureTech providers SHOULD be helping them save money on.

To be precise, at least 1.8 Trillion is going to be lost by Practitioners this year on Technology and Technology Consulting. Earlier this year, in our post on SaaS Spending, we predicted that at least 1.5 Trillion would be wasted based on total industry spend and an average waste of AT LEAST 30% (due to overspend, unused applications and project failure), but we are now revising that up to 1.8 Trillion based upon a minimum projected spend of 5.4 Trillion based on recent Gartner estimates.

To put this in perspective, only 15 countries have a GDP in excess of 1.8 Trillion! In other words, the total technology spend wasted is greater than the individual GDP of 92% of the countries on earth.

But it gets worse.

If you add up the global revenue of the 23 Big Consultancies, which you will be using for ProcureTech, FinTech, and related consulting, it comes to 551 Billion.

Accenture 65
Bain 7
BCG (Boston Consulting Group) 13
Capgemini 25
Cognizant 20
Deloitte 67
E&Y 51
Fujitsu 26
Genpact 5
HCL Technologies 14
Infosys 25
Kearney 2
KPMG 38
McKinsey 19
Mercer 2
NTT Data 30
Oliver Wyman 3
Publicis Sapient 18
PWC 55
Recruit 23
BAH (Booz Allen Hamilton) 1
Tata 31
Wipro 11

And if you add up the global revenues of the 9 big analyst firms, which you will be using for ProcureTech and Fintech advisory, it comes to 51.5 Billion.

Clarivate 0.5
Forrester 0.5
Gartner 6.5
Hackett 0.5
IDC 4.0
IQVIA 15.0
Kantar 3.5
Moodys 7.0
S&P 14.0

That’s a total of 602.5 Billion you’re spending for ProcureTech and FinTech consulting and advisory in return for a loss of roughly 1.8 Trillion!

In other words, for every dollar you spend, you lose three. That’s the reverse of the ROI you should be expecting. You should NOT be investing in Technology or Technology Consulting unless you will get a 3 to 1 return. But what you ARE doing is investing in Technology Consulting and Advisory for a 3 to 1 LOSS! That is the EXACT OPPOSITE of what you should be doing.

So what should you do? STOP!

Or, if you can’t stop, change the game. More to come …

Breaking Down The Barriers: Insufficient Business-Wide Support/Resistance to Change

We’re continuing our foray into the top barriers to success that we outlined in our top barriers post that chronicles the barriers that keep coming up over and over again in every Procurement survey in our effort to ensure that you don’t have to read another state of procurement study for the next 5 years. Finally, we have to deal with the Resistance!

A Brief History …

As per our discussion of the Organizational and/or Technical Execution Support Capability barrier, and the siloed ways of working barrier, with each successive innovation, business, and process improvement, processes and tasks became more complex and required more education and experience to perform. As a result, with each successive innovation, each department became more and more narrowly focused on their functions, and, correspondingly, educational programs became more and more focused, the employees of each department learned less and less about the other functions, tasks, and requirements outside of their domain.

Simultaneously, as organizational departments diverged further and further apart as their processes, equipment, software, and budgetary needs became more and more distinct, the share of the pie each received decreased. The departments were stretched thinner and thinner, and their ability to adequately function was often at risk as much as that of Procurement and Supply Chain.

The Problem

As a result, stretched thin and without a deep understanding of Procurement operations, most departments have little incentive or capability to properly support Procurement.

The Necessary Realization

“You scratch my back and I’ll scratch yours, first.”

You have to demonstrate how you can make their jobs easier and get better results. They won’t learn Procurement because, until they understand why it exists and what value it can deliver, they don’t even want to give you the time of day.

This means that you will have to learn their functions, understand their major pain points, and which of Procurement’s capabilities and values to promote to that department.

For example, Marketing doesn’t care about saving money — if they have the budget, they have the budget — because their metric is eyeballs and engagement and inbound uptick, and that requires creativity — and the best creatives cost the most, so, dear Procurement, please go away. It’s up to Procurement to understand that and explain to Marketing that they’d have more money for creative if they broke the quotes down into creative and non-creative expenses, and understood the market rates for standard services and consumables and only paid market rates, not ridiculous mark-ups as part of bundled quotes. It’s up to Procurement to explain to Marketing that 200 GSM C2S sheer finish paper is 200 GSM C2S sheer finish paper. Recording equipment is very comparable as well. There are average labour rates for recording engineers, camera people, etc. And that they can save Marketing money where talent doesn’t count so that Marketing can hire better talent or do more campaigns.

This also goes for Legal, R&D, Manufacturing, HR, and every other department that needs to procure goods and services. Legal will need help with understanding not only standard rates for standard services but how matter costs break down. HR will need to understand average rates for consultants in IT, Utilities, etc. where there are average rates. R&D will need to understand which suppliers can produce similar custom parts with better assurance of supply (and Procurement can steer to the subset that are more cost competitive). Etc.

The Technological Requirements

The technological requirements are considerable and require supply chain aware sourcing and sourcing aware supply chain and expertise from source to sink and back again on both sides.*

This concludes our initial series on the top Procurement barriers that keep getting repeated in every survey, and now you don’t need to read another survey on procurement barriers for at least five years! After a short break, we’ll be back with the major procurement risks!

*A final reminder that if you want guidance in the short term, hope that your favourite provider reaches out to Bob Ferrari of Supply Chain Matters or the doctor and enables us to focus on writing the series (or in-depth e-book) explaining what modern Procurement and Supply Chain Tech needs to look like (and how it needs to be implemented) to address the challenges, reduce the risks, and address the priorities versus just dripping out tidbits as free time permits.