Spend Matters Future 5 2023 – Introducing akirolabs

The procurement technology market is evolving rapidly and deploying the latest power that innovation can bring to support the changing and challenging needs of its customers. In an ever-crowded space it’s hard for those who rely on these platforms and systems to keep ahead of the latest developments.

For that reason, Spend Matters analysts make it their mission to scour the market to find those new solution providers that can fulfil a very specialist role to fulfill the procurement needs of today. Following months of debate based on extensive knowledge of the many procurement technologies they have reviewed, analysed and benchmarked, they arrive at a list of five young providers that they believe are innovative and exciting, have a rapidly rising presence in the market, can grow sustainably and which every CPO should have on their radar.

Get to know all the providers that made this year’s 50 To Know, 50 To Watch and Future 5 lists here.

The Future 5 start-ups are taking technology further to address problems not previously solved, or are introducing a new category of automation that tackles new challenges in interesting ways. We believe these companies deserve greater visibility, especially in a market which is increasingly consolidating and diluting buyer choices.

So we are delighted to introduce you to our Future 5 as we capture their voices. Today please get to know akirolabs.

What is akirolabs?

akirolabs is a category strategy management solution that aims to support procurement’s transformation from being a purely tactical function to an orchestrator of value. It relies on introducing AI to traditional category management strategies, specifically by augmenting teams instead of automating processes. You can read a in-depth description of akirolabs here as part of Spend Matters Insider

How akirolabs came into being

Michael Pleuger, one of akirolabs’ co-founders, explains that some six years ago, Detlef Schultz, the founder and ex-CEO of Vodafone Procurement Company, asked him if he could help with the digitalization of the procurement company. “And I said No,” he recalls, “I don’t even understand the question, because — in my humble opinion — the company is already fully digitalized in the sense that it meets or beats every benchmark in procurement.”

Still, he took to heart the maxim that “All experts are experts in what was. There are no experts in what will be.” So they mobilized their connections and developed a predecessor to akirolabs on premise at Vodafone. However, even though the product proved successful with analysts, it was the result of a partnership between Vodafone, KPMG and Microsoft, meaning that a product which needed a start up environment had to navigate the bureaucracy of three massive organizations. So, the team went all in to launch akirolabs. “The process we ended up digitalizing,” Michael concludes, “was the strategic procurement process.”

What is akirolabs’ greatest strength?

akirolabs derives procurement strategies from the overarching business strategy. To illustrate how radical this is, Michael turns to history of traditional strategic procurement: “In 1983, Motorola launched the first ever commercial mobile phone, and Peter Kraljic, the Harvard professor, invented the methodology procurement uses as the standard to this day — namely, seize the leverage and get the best price as a power play. But mobile phones have radically evolved since 1983, and procurement is still running into the same problems caused by relying on this strategy.

“For example, if a procurement team in a company with various business units with their different goals of operational efficiency, launching a new product faster, becoming sustainable, etc., procurement bundles their demands to get cheap materials. But the business says ‘Sorry procurement, we didn’t want cheap steel. We wanted fast steel. We wanted green steel. We wanted quality steel.” So, akirolabs leverages data so that procurement can better incorporate these larger strategic objectives into its tactical landscape of sourcing from the best suppliers — however they deem the best to be.

What’s the road ahead for akirolabs?

“We’re going to dominate the strategic procurement software market,” Michael states. He then expands to explain that they will alter the procurement perspective of how AI will work with procurement strategy. “There are people who say they automate strategy development, but we fundamentally believe you cannot automate strategy processes for the simple reason that if you find a piece of information somewhere in the market, that information gets interpreted through many different opinions. So, if you automate this end-to-end process, and in each step of the process you have a 20% chance of misinterpretation, at the end it’s either approximately right or precisely wrong.” Instead of automation, akirolabs believes AI should augment human intelligence, working with procurement teams in parallel.

The second landmark ahead of akirolabs is the exploitation of how it is essentially a data company. After developing hundreds of strategies with its customers using thousands upon thousands of data points, it can sell ready-made strategies to companies so they can accelerate the strategizing phase.

What does it mean to be a Future 5?

“I think it is the best recognition ever, because it is new. I always wanted to be on this 50 to Watch list or this 50 to Know list, but most of these excellent companies have never been a Future 5. Moreover, I think Future 5 is much better because only 5 companies globally that are considered for their innovation power or whatever excites the analysts — so it’s an amazing honor!”

Many thanks to akirolabs for sharing its story with us. We hope the Future 5 broadens our readers’ perception of the art of the possible to help you position your organization for the challenges ahead.

The Spend Matters analyst team hosted a webinar recently to explain what’s behind the selection criteria for our 50/50 lists and Future 5. If you missed the live event you can register to receive a link to the recording.