Let me talk about a few overhyped and ridiculously under utilised aspects in procurement
Overhyped
1) Solving ESG using platforms: Your teams will end up logging answers to questions. The real activity is still done offline. Stop wasting time and money on “platforms”. Spend it on real on ground activity and community intelligence
2) Chatgpt and LLMs: It’s so good in so many domains (content, programming, general consumer queries) but procurement use cases are still quite far away. Yeah, you can get generic answers or generate generic text for your communication with suppliers but it fails miserably for even basic procurement tasks. Don’t bother about it right now.
3) Legacy e-sourcing suites and Magic quadrants and paid public rankings: Too old and probably too generic for any practical use. Ask people on linkedin and you will get better shortlists instead of paid and sponsored reviews.
If you are running 3 month integration program or more and paying millions, you need to rethink!
For showing how old and overhyped sourcing suites are , I will launch a free one in July! No frills
4) Contract management tools: Funny, because they are glorified Google drives. Don’t pay for these, ever!
Ridiculously underutilised aspects
1.) Low code / No code tools: you have no idea how easy it is to build a simple tool that can save hours for your procurement and business stakeholders. Need an insight?
Google any low code / no code tool, sign up free and start building a Low code / no code app for capturing market intelligence from your suppliers (the usuals like cost drivers, port strikes, demand-supply situations, macro risks etc.). Consolidate the info and then use it for negotiations. 3000 Man days annual saving potential under 1000 usd!
2) Spend analysis data: I am talking about data and NOT the tools. Most of the spend analysis tools have lost their way and are being run by poor product leaders. Flooding visualisations on users don’t help.
But spend analysis data remain a powerful tool (when analysed correctly) to generate.
a) 10% tail spend savings irrespective of when you start your journey
B) Fraud analytics and at least 10 high-impact use cases. I will make a separate video on this.
3) Esourcing data combined with market intelligence: Price modelling combined with ordering frequency. Buy at the dips.
4) Negotiations: Only 20% of transactions get negotiated properly (in terms of count, not value), meaning 80% of Negotiations leave money on the table.
Not only that, buyers don’t react to market dips or increased demand forecasts to really leverage.
Also, suppliers almost always have better relationship management than buyers, leaving buyers clueless about how to negotiate successfully! Preparation of the negotiation starts with data!
5) Lastly, stop making your procurement CoE an admin function. Outsource the admin parts of procurement.
More on this in the Supernegotiate community!
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