Author Archives: Michael Lamoureux



AI in Optimization Today

SciQuest

As we continue our investigation into AI in source-to-pay technology, which started with our AI in Procurement series and continued with our AI in Sourcing series, we take a deeper dive into optimization. Primarily the focus is on strategic sourcing decision optimization, but we'll discuss related areas as well.

First, let’s recap the status quo to remind us of the reason for the existence of these AI briefings.

AI, or artificial intelligence, does not yet exist, especially in the strictest definition of the term. Computers are not intelligent, not even artificially. They can do more calculations than ever before. They can take advantage of more data than ever before. They can find significantly more correlations than ever before and compute, with better and better statistical reliability, which are just correlations and which are true cause and effect relationships. But they are still, when you get right down to it, as dumb as door knobs. Probability is not intelligence. But it is damn good guidance.

In sourcing, logistics and supply chain, we are primarily concerned with decision optimization. Read on to find out the latest developments and expectations.

The CPO’s Conundrum (Part 1B): How Outside-In Issues are Shaping the Course of Procurement

As we noted in yesterday’s Spend Matters PRO article, if you were to ask a roomful of CPOs what was their top concern was, for this year or even the coming decade, chances are the majority would lead with cost management and supply assurance. And while this makes sense, supply assurance and cost reduction are just two of a host of broader issues that are being pushed to the front of mind for today’s CPOs. So we are dedicating a series to the broad scope of issues that the modern CPO must face, starting with an overview of how they break out in the common PESTLE framework. Yesterday we addressed the “PES” — Political, Economic and Social — and today we will address the “TLE” — Technological, Legal and Environmental.

The CPO’s Conundrum (Part 1A): How Outside-In Issues Are Shaping the Course of Procurement

If you were to ask a roomful of CPOs what was their top concern was, for this year or even the coming decade, chances are the majority would lead with cost management and supply assurance.

This makes sense. Within the hierarchy of procurement value, providing the right goods and services at the right time and place, preferably at the right (or better) price, constitute a foundation without which organizations cannot function.

Because of this requirement to secure and manage supply markets, procurement’s value proposition to the business is ultimately defined by its ability to access and derive value from markets. This means procurement value, then, is driven heavily from an outside-in perspective. That value starts with assurance of supply, just as top-line growth and brand development are foundational to sales and marketing.

The problem, however, is that supply assurance and cost reduction are just two of a host of broader issues that are being pushed to the front of mind for today’s CPOs. Because the CPO must manage multiple changing supply markets, and because those supply markets are affected by numerous external forces over which the CPO — let alone the business or even some governments — has no ability to influence, the CPO’s agenda is in reality much broader than assuring supply and reducing costs.

This brings us to what we call the CPO’s conundrum: Procurement organizations are primarily measured by the C-suite on supply assurance and cost control, but the agenda that the outside world is setting for the CPO is far bigger than just that. How, then, can procurement leaders meet the agendas recognized and prioritized by management while also addressing the equally (or perhaps more) important agendas of the changing, external supply world?

This Spend Matters PRO series examines the roots and resulting challenges of the CPO’s conundrum. In this brief, the introduction to this series, we discuss the current items on the CPO agenda, as well as the outside-in forces that are most notably butting their way in.

In subsequent installments, we will analyze overarching issues on the new CPO agenda individually, including corporate social responsibility (CSR) and sustainability, digital business strategy, political and economic instability, and regulatory risk.

Artificial Intelligence in Sourcing: The Day After Tomorrow

In Spend Matters’ last PRO article about AI in Sourcing, we reviewed some of the exciting capabilities that you will be able to expect in tomorrow's e-sourcing systems, where we define AI as “augmented intelligence” because, as we've repeatedly stated in our articles in this ongoing AI series, there is no true artificial intelligence in any enterprise technology today. In fact, there won't be anything close, at least on the open market, even tomorrow. But it will be closer tomorrow, and it will approach the point where it can be labeled augmented intelligence as it will allow you to make better, smarter, decisions — no matter how good and smart the decisions were that you made in the past.

In the last article, we discussed the following augmented intelligence capabilities in particular that will be part of tomorrow's e-sourcing platforms:



  • Event-based category alignment
  • Market-based sourcing strategy identification
  • Automatic strategic sourcing events
  • Suggested award scenarios

However, as great as event-based category alignment and market-based sourcing strategy identification will be, and as fantastic as automatic strategic sourcing events with suggested awards will be, there will be even better augmented intelligence capabilities in the e-sourcing platforms of the future. Specifically, the day after tomorrow, you will be able to expect the following seemingly magical capabilities:

  • SKU replacement
  • End-of-life (EOL) recommendations for products
  • Real-time strategy alignment
  • Auto-pause/extend

And more. But anything beyond these could be quite a ways out, so we will stick to these for now.

Artificial Intelligence in Sourcing Tomorrow (Part 2)

digital

In this Spend Matters PRO series on AI in Sourcing, we began our discussion of some situations where you will find AI in e-sourcing platforms, where AI is defined as “augmented intelligence” (because, as we have discussed in prior articles, there is no true artificial intelligence in enterprise platforms today and there won't be tomorrow either). AI is a buzzword, not a reality. But we don't need true AI to achieve software that can radically increase our productivity. Reaching augmented intelligence will add multiples to our productivity and savings.

In our last post, AI in Sourcing Tomorrow (Part 1), we discussed how the sourcing platforms of tomorrow will offer event-based category alignment functionality as well as market-based sourcing strategy identification. Together, these augmented intelligence features will not only save you a lot of time and effort in the identification and conducting of a proper sourcing event, but will also maximize your chances of success with the strategies that you follow.

It will be a magnificent start to the sourcing process. But it won't stop there. Because it can't stop there.

As per our article on AI in Sourcing Today, there's a lot of manual effort involved in a sourcing event. And the platforms of tomorrow will integrate workflow automation and auto-fill to handle a lot of the drudgery that will be required in any sourcing project.

However, just including workflow automation and auto-fill isn't getting you to sourcing utopia, where you’re getting maximum return for minimum effort. Something more is needed. How much more? Let's read on to find out.

Artificial Intelligence in Sourcing Tomorrow (Part 1)

In Spend Matters' last PRO article, Artificial Intelligence in Sourcing Today (The Situation Now), we overviewed some scenarios where you can find AI in e-sourcing platforms today, where we define AI as “assisted intelligence” because, as we've stated in this series about AI in modern sourcing and procurement technologies, there is no true artificial intelligence in any enterprise technology today. In fact, there is nothing close, at least not on the open market.

But we will be closer to artificial intelligence tomorrow, and in the near future, we may get to the point where the average market leading platform offers you augmented intelligence on a daily basis.

In our last article, we reviewed the common instances of the assisted intelligence technologies on the market today, namely: auto-fill, workflow automation, outlier identification and rule-based auto-award identification.

However, this is just the beginning of what you should have as a sourcing professional, especially considering what's coming in AI Tomorrow. For example, if you go back to our series in AI in Procurement Tomorrow, you know that soon you will have technologies to prevent overspend, buy on your behalf invisibly, buy automatically, identify opportunities while you sleep, identify new categories before you know of their existence and identify procurement methodologies for success.

But these improvements will spill over into the sourcing domain as well. In Tomorrowland, as a buyer, you will also have augmented intelligence technologies that will allow for:

* Event-Based Category Alignment — not just new category detection * Market-based Sourcing Strategy Identification — not just the right methodology for procurement * Automatic Strategic Sourcing Events — not just auto-buy from a catalog or contract * Suggested Award Scenarios — not just canned options

And it will make your buying life much more efficient. But how?

Artificial Intelligence in Sourcing Today (The Situation Now)

Not that long ago we ran a six-part series on AI in Procurement (Today Part I and Part II; Tomorrow Part I, Part II, Part III; and The Day After Tomorrow). By the time we defined the levels of AI today, what will be possible in the future and just how far AI in procurement will take you, you probably thought that was all there was too it and were impatiently awaiting the day when your "best of breed" applications would catch up.

The reality is that this is just the tip of the iceberg.

When your platform provider (or, if necessary, your future platform provider) catches up and starts offering you modern capabilities, those capabilities should extend well beyond procurement and spill over into multiple areas of S2P, including sourcing.

So to whet your appetite about what should be coming next, and to make sure your provider knows that you know what should be coming next (and will be holding them accountable), in this series we're going to dive into the applications of AI in sourcing and discuss what is available today, what is coming tomorrow — and what is in your strategic buying future.

TenderEasy: Vendor Introduction, Analysis and SWOT

trucking

Despite the current tide of populism, the growing globalization of businesses and, thus, corporate supply chains is a trend no procurement organization can ignore.

Alongside this push into new markets for both sales and production comes a need to more effectively procure transportation because moving commodities or finished goods between facilities, like factories or distribution centers, and their final destinations has become more complex. Add to this a litany of procurement-specific obstacles to effective freight sourcing and management — from a dearth of qualified internal resources to sparse, inaccurate data about freight spend — and the challenge becomes even more daunting.

This combination of logistics category complexity and insufficient procurement capability to manage it is what originally gave rise to the sourcing optimization solutions that most North American organizations are familiar with.

Trade Extensions (now Coupa Sourcing Optimization), CombineNet (now Jaggaer Advanced Sourcing Optimization) and Keelvar (one of the few independent sourcing vendors that currently supports bid optimization) all got their starts enabling logistics procurement across thousands of lanes. As they grew, however, each of these vendors evolved their solutions to support additional categories beyond freight, enabling larger and more complex scenarios while leaving other elements of the transportation equation (like execution) to other technology providers.

TenderEasy, a 14-year-old firm that launched its SaaS solution for freight procurement in 2012, has taken the opposite approach. Rather than expand its sourcing optimization capabilities beyond logistics, TenderEasy has doubled down on freight, positioning itself as the entry point to a broader transportation management ecosystem. It committed to this strategy in 2018 when it became part of the Alpega Group, a global logistics software company that offers end-to-end solutions for transport needs, including not only freight sourcing but also access to freight exchanges and transportation management systems.

Leveraging this network of transportation solutions, Stockholm-based TenderEasy is hoping to bring its Europe-centric expertise across the Atlantic — the company already counts Heinz, adidas Group and British American Tobacco (BAT) as clients — taking on incumbent sourcing optimization vendors in the process.

This Spend Matters PRO Vendor Introduction offers a candid take on TenderEasy and its capabilities. It includes an overview of TenderEasy’s offering, a breakdown of what is comparatively good (and not so good) about the solution, a SWOT analysis and a selection requirements checklist for companies that might consider the provider.

Wax Digital: Vendor Snapshot (Part 3) — Summary and Competitive Analysis

We can count on two hands the number of independent source-to-pay providers left in the global market with sufficient breadth and depth of capabilities to fully earn the moniker of “suite provider.” Wax Digital is one of them. But don’t fret if you’ve not encountered them yet.

In Part One of this Vendor Snapshot, we introduced you to the firm — a source-to-pay provider from the UK that you may not be familiar with, especially since it has not yet participated in SolutionMap (although that changes this quarter). Then in Part Two, we dove in deep and examined, in detail, all of the strengths and weaknesses of this widely deployed source-to-pay platform that is just becoming known in North America.

Wax Digital is a particular provider to note among others, as it one of the few providers that offers a relatively complete, integrated, source-to-pay offering on one code base that is already used globally in over 100 countries. Maybe vendors tout “one platform” when in fact their solutions do not work as seamlessly together as claimed.

Now, today, in our third and final installment in this Vendor Snapshot series, we provide a SWOT overview of Wax Digital as a whole, a comparative and competitive market overview, and provide some final summary analysis and recommendations for organizations that might consider Wax Digital as a potential solution partner.

AI in Procurement: The Day After Tomorrow

SciQuest

Spend Matters has been exploring the state of artificial intelligence in procurement. Before we look into the future, let’s see where we’re at now. We started with AI in Procurement Today (Part 1 and Part 2), which was followed by AI in Procurement Tomorrow (Part 1, Part 2 and Part 3). This leads one to ask, what comes next? A number of vendors are already working on the tomorrow features and a few even have some in beta.

We aren't going to look too far into future because we want to stick to capabilities you should see in the next decade. So here’s a representative list of some of the more common features coming down the pipe. You should expect to see:

  • Tail spend elimination
  • Guided procurement
  • Performance improvement

AI in Procurement Tomorrow (Part 3): Category Wizards Will Save Time, Add Strategic Muscle

In this series, Spend Matters delves into the status of artificial intelligence, with a focus on how AI can improve the sourcing and procuring process. Today the technology is really “assisted intelligence,” which was detailed in our precursor series: AI in Procurement Today, Part 1 and Part 2). The technology of tomorrow promises the “augmented intelligence” that we are discussing in this series, as some vendors already have limited beta capabilities. In the first two articles, we discussed how tomorrow's systems are going to help considerably with overspend protection and how "ninjabots" can crunch data on buying and automatic opportunity identification. In this article, we'll consider “category wizards” and how they can put a halt to manual tasks — like defining/assessing categories and choosing the best procurement process — thereby adding strategic prowess for even the lowest of buyers.

AI In Procurement Tomorrow (Part 2): Ninjabots and Augmented Intelligence

In this series we are discussing artificial intelligence, with AI touted by many a salesperson. Virtually every vendor is claiming AI, even though it’s a stretch to promote having a fully functioning model. However, if you are willing to settle for “assisted intelligence,” that AI exists today (as per our precursor series that you can read here: AI in Procurement Today, Part 1 and Part 2), and it won't be long before we have the “augmented intelligence” that we are discussing in this series, as some vendors already have limited beta capabilities (that are typically restricted to a subset of categories) in many of these areas. In our last article, we discussed how tomorrow's systems are going to help considerably with overspend protection. In today's article, we'll consider “ninjabots” and dive into invisible buying, automatic buying and automatic opportunity identification.