Who Needs The Beef?

For those of you who have been following my rants, especially on intake-to-orchestrate (which really is clueless for the popular kids as it doesn’t do anything unless you already have all the systems you need and don’t know how to connect them), you’ll know that one of my big qualms, to this day, is Where’s the Beef?, because while the intake and orchestrate buns are nice and fluffy and likely very tasty, they aren’t filling. If you want a full stomach, you need the beef (or at least a decent helping of Tofu, which, unless you are vegetarian, won’t taste as good or be quite as filling, but will give you the subsistence you need).

And you need filling. Specifically, you need the part of the application that does something — that takes the input data (possibly properly transformed), applies the complex algorithms, and produces the output you need for a transaction or to make a strategic decision. That’s not intake-to-orchestrate, that’s not a fancy UI/UX, that’s not an agent that can perform transactional tasks that fall within scope, and that’s NOT a fancy bun. It’s the beef.

But, apparently, at least as far as THE PROPHET is concerned, (bio) re-engineering is going to eliminate the need for the beef. Apparently, the buns are going to have all the nutrients (or data processing abilities) you need to function and do your job.

In THE PROPHET‘s latest analogy, today’s enterprise technology burger consists of:

  • the patty: (not to be mistaken for the paddy) which combines enterprise technology and labour (which means it really should be the patty [labour] and the trimmings [technology] in this analogy)
  • the upper bun: and
  • the lower bun: which collectively provide you a way to cleanly get a grip on the patty

But tomorrow’s enterprise technology burger will consist of:

  • the upper bun: which will be replaced by a new type of technology that fuses co-pilots and agentic systems to power autonomous agents and replaces the patty [labour] and part of trimmings
  • the lower bun: which will represent the next generation data store and information supply chain and build in “self-healing” technology for data maintenance and replace the other part of the trimmings

… and that’s it. NO BEEF! Just two co-dependent buns that are destined to fuse into a roll … and not a very tasty one at that. Because this roll will, apparently, operate fully autonomously and never get anywhere near you, leaving you perpetually hungry.

Now, apparently, not all parts of the patty (with its complex amino acid chains and protein structures) will be capable of being (bio) re-engineered into the buns right away and the patty won’t disappear all at once, just shrink bit by bit over the next decade until there’s nothing left and the last protein structure is absorbed (or replaced by a good enough AI-generated facsimile — they can do that now too). In THE PROPHET‘s view, legacy systems of record (ERP/MRP, payment platforms, etc.) will be the last to be replaced, and those will survive along with the legacy labour to maintain them until they can finally be split up into components and absorbed into the bun.

In other words, in THE PROPHET‘s view, you don’t need the patty, and, more specifically, you don’t need (or even want) the beef. I have to argue this is NOT the case.

1. You Need the Beef

Thinking that the patty can be completely absorbed into the buns is what results from a lack of understanding of enterprise software architecture best practices and software development in general.

The best architecture we have, which took years to get two, is MVC, which stands for

  • Model: specifically, data model, which should be at the bottom (and could be absorbed into a data bun)
  • View: specifically, the UI/UX we interact with (and could be absorbed into a soft, warm, sweet smelling sourdough bun)
  • Controller: the core algorithms and data processing, which needs to be its own layer that supports the UX (and allows the UX to reconfigure the processing steps and outputs as needed) and can be cross-adapted to the best available data sources (that need to be remain independent)

Moreover, even Bill Gates, who predicts AI will have devastating effects across all industries, realizes that you can’t replace coders, energy experts, and biologists, and, by extension, jobs that require constantly evolving code, organic structure, and energy requirements to complete. So you will still need labour that creates, and relies on, highly specialized algorithms and expert interpretations of outputs to do their jobs. That also means that, in our field, strategic sourcing and procurement professionals cannot be replaced but tactical AP clerks are on their way out as AP software automatically processes 99% to 99.9% of invoices with no human involvement, even those with missing data and errors, handling the return, correction, negotiation, etc. until all of the data matches and costs are within tolerance.

2. You Want the Beef!

The whole point of modern architectures and engineering is to minimize legacy code / technical debt and maximize tactical data processing and system throughput (and have the system do as much thunking as possible, which is what it’s good at). If you try to push too much into the lower bun, you don’t have separation of data and processing, which means it’s almost impossible to validate the data as it’s not data you’re getting, but processed data, which means that the system might be continually pushing wrong data to the outer bun, even with good data fed in, due to a bug deep in the transformation and normalization code. But your automatic checks and fail safes would never catch it because you’ve turned what should be a crystal (clear) box into a black box! If you try to push too much processing into the upper bun, you have to replicate common functionality across every agent and application, leading to a lot of replication and bloat that consumes too much space, uses too much energy, and makes the systems even harder to maintain than the legacy applications of today.

So while the burger of tomorrow might be different with a much leaner, more protein rich, patty (with less sauce and unhealthy trimmings), and the bread might be a super healthy natural yeast-free multi-grain flat bread, making for a smaller (and possibly less appetizing burger from a surface view), it still needs to be a burger and anyone who thinks otherwise has joined the pretty fly Gen-AI in hallucination land!

Why Aren’t You Realizing the Full Value of Your Sourcing Efforts?

It’s been a well known statistic going back all the way to 2009 that at least 30% (and often 40%) of identified value in a sourcing event is never realized when Mickey North Rizza of AMR Research (acquired by Gartner in 2010 in an acquisition game of the 64,000,000 pyramid) published her classic 3-part series on Reaching Sourcing Excellence with Part 1 titled How to Keep 30 Cents of Every Dollar Spent. The reality is that while many leading organizations adopted strategic sourcing quickly during its first heyday in the mid-2000s, often before Procurement, because of the huge savings opportunities that were identified with good reverse auction platforms (in markets where supply exceeded demand) and good sourcing optimization (regardless of market conditions), as sourcing optimization identified an average savings of 12% consistently (compared to reverse auctions which saw significant drops every time they were applied to the same category), most of these leaders who identified savings of 10% or more never saw half of the identified savings. This is because savings requires more than just identification and a signature on a contract, it requires execution!

Execution that, at a minimum, requires:

  • making sure you order on the contract
  • … on time to receive delivery on time using the preferred shipping method
  • making sure you receive defect-free goods that meet the spec before paying for them
  • making sure the amount you are billed is the amount as per the contract
  • … and that you are not billed for expediting fees or surcharges you DID NOT agree to
  • making sure you pay on time (to avoid penalties)
  • … and only ever pay for any good or service once (using an m-way match)
  • making sure you terminate or renegotiate before an evergreen renewal
  • … and that you have verified the supplier has all the certifications and insurances in place before placing an order or renewing the contract
  • … etc.

It comes back to the concept of the perfect order which must be

  • on time,
  • complete,
  • damage free,
  • correctly documented,
  • correctly billed, and
  • adherent to all contract terms

This is not easy to do unless you

  • have a good procurement system
  • have a (carrier that has a) good WIMS (Warehousing and Inventory Management) system

and, the part that most people miss,

  • have a good contract lifecycle management system that manages the contract execution post signing

And when you look at the majority of contract management systems, they tend to fall into three categories:

  • a glorified e-filing cabinet / document repository where you can store your contracts and search their metadata (and literally no better than what a high school student with Microsoft Access and minimal coding skills could build 20 years ago)
  • a contract creation system that will allow you to quickly draft contracts using:
    • contract templates, from your, or their, legal department, tagged by region and category they can be used for,
    • clause libraries and templates, possibly with multiple version support based on territories and categories, or, today
    • Gen-AI drafting of templates through specification of category, region, requirements, and risks that must be covered as well as e-versions of all previously signed contracts in the category, region, business requirement, or risk categories (which then need to be mildly to moderately edited by a Legal expert)
  • a signatory platform with negotiation support (version control, dynamic redlining, audit trails, etc.)

Which is all fine and dandy, and well implemented can make your Legal team and Sourcing teams considerably more productive during the negotiation process, but does diddly squat when it comes time to actually helping you manage the contract execution. Now, you might think that you can do that in the Supplier Management system, because you’re ultimately managing a supplier, or the Risk Management system, because you’re ultimately managing a risk, and you can, to a point, and specifically the point at which those systems allow you to define contract tasks, but none of these are set up to let you holistically manage a contract — contract 360 if you will. This is especially the situation if you have a master contract with a number of sub-contracts, and those sub-contracts have sub-contracts as well. This will be the case if you are buying off of a contract tied to a GPO master contract, a holding company master contract (if your company is part of a group of companies), or in construction / engineering / shipbuilding industries where your main supplier will need to subcontract to a number of smaller suppliers for custom parts or services and your organization needs to manage that for regulatory or risk reasons.

In other words, the only contract lifecycle management solution that is truly valuable to Procurement is the solution that allows the contract to be managed from post signature to termination, helping the organization ensure all of the obligations are met and rights are received.

Happy National Sourdough Bread Day

It’s pretty clear with the state of the world right now that April Fool’s Day is cancelled as it appears we are all subject to one never-ending year-long prank no matter what country we live in.

So go bake a sourdough and at least you will be able to enjoy something today …

Blacklight.

Living on a lighted screen
Approaches the unreal
For those who do not feel
Who live in a reality beyond the gilded meme

Against that unlikely role
Ill-equipped to act
With insufficient tact
One must put up barriers to keep oneself intact

Living on a lighted screen, the influencer’s dream
Those who wish to be seen
Those who wish to be, they put aside the alienation
Obsessed with the fascination
The false relation, the underlying theme

They live in a fisheye lens
Caught in the camera eye
I have no heart to lie
I can’t pretend a stranger is a long-awaited friend

All the world’s indeed a stage
We are merely players
Performers and portrayers
So why must they lock themselves inside the gilded cage

Living on a lighted screen, the influencer’s dream
Those who wish to be seen
Those who wish to be, they put aside the alienation
Obsessed with the fascination
The false relation, the underlying theme

Living on a lighted screen, the influencer’s dream
Those who wish to be seen
Those who wish to be, they put aside the alienation
Obsessed with the fascination
The false relation, the underlying theme

The false relation
The underlying theme

Dear Influencer, it’s not the limelight. Why the Rush?

You Say You Want Success, But Do You?

This post is inspired by THE REVELATOR‘s inquiry where he asked Do You Really Want a Successful ProcureTech Initiative?

For the vast majority of you, the answer is a clear and resounding “YES” (with the possible exception of those of you who have been treated badly by your employer and want to use your last official act to stick them with an application that will make them as miserable as you are, but as far as I can tell, you are a very small minority — you didn’t get into Procurement expecting it to be easy, or to be a way to make friends).

However, you are only one cog in the ecosystem. Let’s look at the other cogs:

Vendor: as long as you keep renewing the SaaS subscription, the C-Suite at the vendor doesn’t care if they sold you a Ferrari (at a Ferrari price tag) but delivered a 2004 Mazda RX-8 …

Analyst Firm: as long as the big research subscriptions keep rolling in from the big vendors (who always feature at the top / upper right / frontal wave of their maps), the analyst firm doesn’t care if you succeed or not, and will not only happily push the hype the vendors want pushed, but happily blame you for not doing your research and not selecting the appropriate technology when you and your counterparts take their advice en-masse and then contribute to the all-time high project failure rates of 88% (two and a half decades of project failure)

Implementor: not really, because if you don’t swap out the solution at renewal time, where is their future revenue going to come from???

Big X who pushed the platform: Hell No! … they need to sell you projects to find bolt ons, do custom additions, and tweak the process for years as they need to keep their bench empty! (And some of these shops have over 100K junior consultants they have to keep busy. Moreover, they don’t make money training them on AI, they make money deploying them as your external support force. (Remember, many of these shops are effectively the new Manpower, except they have to pay their consultants on the bench, whereas job placement agencies just had to place people to keep their government grants or get their placement fee!)

And since YOU don’t take the time to do your research and figure this out (including the fact that the Big X pushed the worst fit solution from their stable on you to keep their Gold/Platinum/Sycophant status with the solution provider), that’s why YOU keep failing. Even if the salesperson honestly wanted to sell you a win (and many don’t, and the doctor can say that confidently with over 25 years in Enterprise Software and he’s sure THE REVELATOR has some stories to tell here), that’s far from a guarantee that a win will happen.

If you truly want success, YOU have to define your processes, define your problem, find the right vendor, make the vendor contractually responsible for implementation success (whether they do it or use a third party) with delayed payment (where you don’t pay for a module until it is working and passes predefined tests) and early termination clauses, identify the gaps, identify the right niche consultancy (who doesn’t have a stadium of junior consultants) to help you identify add ons and processes to fill them, and define early out clauses in case of non-delivery! You have to do all the work the vendors, analysts, and consultants claim they do for you … because they don’t (or at least don’t do it in your best interest). And while the good ones (which may take you a while to find) will help you, YOU still have to take the lead!

And the doctor knows you don’t always have the time to do it all, which is why he keeps pushing Project Assurance where you hire a niche specialist to help you, one who is not a part of the big COGs that need never-ending projects from you to stay solvent, and only cares about helping you get everything in order for success. (After all, there are so few of these experts it is literally a case of too many companies, too little time. These people or small niche consultancies don’t have to worry about running out of work, and by the time they made it through all the current companies they could handle, it would be time for their initial clients to upgrade to next generation systems anyway — and the only way they’d be available for a future project is to ensure client success with every client they take on.)

As we indicated, in our last two rants, you can no longer afford to be led by the Clueless vendors. It’s time you take your Procurement destiny into your own hands. It’s time for the Revenge of the Nerds!