Dangerous Procurement Predictions Part IV

As per our first three posts, if you read my predictions post, you know SI hates predictions posts. It fully despises them because the vast majority of these posts are pure optimistic fantasy and help no one. Why are the posts like this? Because no one wants to hear the sobering reality off of the bat in the new year and the influencers care more about clicks than actually helping you.

But the predictions are not only bad, they’re dangerous if you believe them. So we are continuing to lay bare the reality of the situation to make sure you understand that this year isn’t much different than last year, no miracles are coming, and only hard work and the application of your human intelligence are going to get you anywhere. Today we tackle the next set, and we hope we’re at the end of the series, but if we stumble across more bad predictions, we’ll have to do a Part V. But we hope not!

11. Negotiation gets productized.

Here’s the thing, in a few niche industries like electronics, we have a few niche players like Levadata that bundle “should-cost” + playbooks + concession sequencing for experienced buyers to help them leverage the state of the market for the best results possible. But they’re hardly used relative to the total electronic market size, as they are used mainly by component buyers / manufacturers, not consumers of such tech (to understand the manufacturer’s margins).

Similar offerings don’t exist across most industries. And even if they did, most buyers are not sophisticated enough to do this. Most struggle with a multi-round RFX, yet alone detailed should-cost/target cost models, negotiation playbooks (which have to cover all standard market conditions and unique situations), and the concept of BATNA, especially relative to offers and counter-offers in a structured concession sequence.

Without these domain relevant niche offerings and career negotiations trained in deep tech, which are both few and far between, this is not going to happen. And Artificial Idiocy certainly isn’t going to fill the gap!

12. AI As a “Governance” Engine.

The claim: When you design them well, agents encode judgment, compliance and brand values into every transaction. Uhm, no! At least not if they are Gen-AI agents that can’t judge (as they can’t even reason), may or may not execute compliant with regulations, and will happily screw a supplier (by refusing to pay an invoice) or customer (by refusing to honour a claim) if it thinks that’s what it needs to do to make you happy or stay turned on (because it was told to find savings of 500K and it’s calculations determine that paying certain invoices or honouring certain claims will not allow that savings goal to be met, if it was even possible when the AI told you it was as it may have arbitrarily multiplied a calculation by -1 just to make the math work).

Governance, by definition, requires the act of governing. And governing, by definition, requires the wisdom as well as the authority to conduct the affairs of the organization. And only truly intelligent beings (i.e. HUMANS) can acquire wisdom over time.

13. There will be no more “X” employees because AI will replace them all!

First of all, how many times do we have to repeat that there are NO AI Employees, you shouldn’t believe the degrading, demeaning, and, frankly, dehumanizing claims, and that you definitely DO NOT want Agentic Buying through fake AI Employees. Secondly, it can’t even do the basic tasks that even the dumbest drunken plagiarist intern can do on a daily basis. But let’s not digress too far before giving you the major examples.

Claim #1: Contract Administrator / Staff Attorney

THE PROPHET has been trying to Kill ALL the Lawyers for quite some time now, and it seems he’s not alone.

But here’s the thing. While AI systems are pretty good (and as good as the drunken plagiarist interns) at spotting grammar errors, redlining against standard clauses, pointing out missing clauses in most organizational contracts, etc., they aren’t good at everything. They can’t identify unaddressed risks without being told what those risks are, they can’t judge the full extent of liability without understanding what those liabilities could be, and they can’t judge the supply geo-political and supply chain risks without broader context.

Plus, they can’t always back up their suggestions; often make up case law, case decisions, and authors; and can’t always judge the requirements of potentially relevant regulations. And we’ve seen many times what happens when even trained lawyers use AI — they get lazy, fall for the slop, get reprimanded and fined by judges tired of the laziness (with a recent example happening in November in Mata v. Avianca, Inc). The previous link also lists three other notable cases where lawyers (and their firms) were fined and sanctioned, but, by now, there are dozens!

But hey, go ahead and replace your lawyer, write bad contracts, make decisions on fake case law, and risk your entire business if you want to. (If you want to, it’s probably safe to go ahead and get rid of the intern who does the redlining and the clerk that does the filing, the AI is probably just as good at that, but do not ever, ever replace a real qualified lawyer with a piece of sh!t “AI”.)

Claim #2: Spend Analyst

Sure you can buy auto-classification that might get to 95%, auto-cubing that can build any cube you can imagine, auto-analytics that can run the entire slate of standard analytics and compute past, current, and projected costs against past current, and projected market data based upon current buying patterns and suggest items, categories, and/or suppliers to (re) source, switch from/to, and possibly (re)shape demand.

But this doesn’t mean that it’s the right items or categories to chase, the right suppliers to use, or even the right area to focus your efforts. It’s based on math, and an assumption of consistent, stable, market conditions, but those don’t exist anymore. If you’re not also considering geo-politics, natural disaster risk, uncertain logistics when the panama canal reaches historic lows for much of the year, terrorists block the Red Sea, and unpredictable weather make sailing around the capes more dangerous than other, and sourcing for resiliency and not just cost, your “spend” analytics are useless. You need an analyst with a good understanding of economics (and access to an economist), geo politics (and access to local experts), and resiliency, not just total cost of ownership buying. (Now, the junior data pushers are probably all dead and gone, but not the real experts!)

Claim #3: Sourcing Event Manager

Now, transactional buyers are gonna get replaced by autonomous systems that use next generation (advanced) robotic process automation enhances with machine learning in Agentic systems, because ordering off of contracts, ordering from catalogs, and doing low-cost non-strategic buys through quick-quote RFPs doesn’t take any brainpower whatsoever (making it perfect for AI that has none).

But strategic sourcing requires more than just buying off of contracts, ordering from catalogs, and issuing quick-quote RFPs! It requires defining key criteria (that go beyond what engineering, marketing, or maintenance provides), identifying validated suppliers (or identifying suppliers that can be easily validated), holistically analyzing the market conditions, determining the best event type, determining the negotiation strategy, etc. The tools might be able to help with initial supplier identification, collecting numerical (commodity) market data, letting you know what event types were run in the past, compiling fact-based playbooks, and, of course, automating each extent of the process, but they can’t do real strategic sourcing that requires real human intelligence. And with today’s geo-political uncertainty, that human intelligence is needed more than ever which means that expert sourcing professionals are needed more than ever. (But dumb buyers will join the dodos.)

There are more ridiculous claims, but you get the point. Skilled jobs are not going away. (But bit pushers are.)

14. New standards for Ethical and Sustainable Supply Chains.

In some countries, current standards aren’t even being met. Good luck getting new standards introduced, since there aren’t a lot of global internationals (with those headquartered in the US in particular) that want even more rigour, especially if it will cost money! As long as laws are being minimally met, or reasonably-sized “facilitation payments” can make problems go away, this is not a priority, especially if going beyond would cost more money!

15. The “AI Singularity” is coming faster than we can process.

It’s not, because the models can’t get bigger, there is no more data, and no one has yet come up with a model that has any hope of even getting close to the actual intelligence of a pond snail.

Plus, if it ever did happen, considering a “singularity” is actually a black hole, it would rapidly consume (i.e. destroy) the Earth, and we wouldn’t have to worry about it. This is just more nonsense from the A.S.S.H.O.L.E.

C-Suite Only Has Budget for AI? Then Lie its AI and Buy Solutions That Work!

You need modern tech more than ever, but with unemployment on the rise (and people buying less), recessionary fears, tariff wars, etc., the C-Suite doesn’t want to give you the increased budget you need to buy the tech you desperately need to be more productive.

On the flip-side, they are finding millions of dollars for “AI” (in the hopes the lies are true and they can replace you, even though any attempts to do so will result in massive negative repercussions) despite the fact you’re not ready for AI and most AI-first vendor solutions SUCK, and trying to bring in in big consultancies (who will propose multi-year big-bang projects that, like all big bang projects that came before, will result in big busts and possibly create some of the biggest supply chain disasters of all time). You know the tech doesn’t work. You saw the 6% success rate from the recent McKinsey study and the 5% from the recent MIT study (both in late 2025). That’s a 94% failure rate, which is even worse than the general tech failure rate of 88% (as per a Bain 2024 study)!

You know you need modern tech, and you know, for the vast majority of those needs, AI ain’t it. Especially since you know that there is no such thing as Artificial Intelligence. (Artificial Idiocy for sure — it’s called Gen-AI — but not Artificial Intelligence. The best you can get is Augmented Intelligence, but that’s always narrowly focussed and quite rare due to too much research, and promotion, of Gen-AI LLMs that will never work [as the models are foundationaly flawed and there is no more data to train them on].)

So what you do?

Frankly, you lie and say its AI!

The fact of the matter is, if the C-Suite is insisting on AI, it’s because they don’t actually know what AI is. (This should be abundantly clear by the fact we have a lot of vendors, and consultancies, claiming AI Employees, and we all know that’s pure bullcr@p!) And the reason they are insisting on it is because everyone else is lying to their face. The Big (and small) “AI” Tech Vendors. (Big) Analyst firms. Big Consultancies. The Media publishing the fake claims and fake stories (and presenting what are bullcr@p-filled advertorials as vetted and verified case studies). Influencers spreading the hype for their own profit.

And since this C-Suite has a lower TQ (Technological Quotient) than an average elementary school child (who can probably use your phone and tablet better than you can), it’s not like they have any real clue what AI is.

And if the C-Suite wants “proof” that the vendor you select has AI, ask the C-Suite what that means to them. Nine times out of ten it is a chatbot interface. If the vendor you select hasn’t done so already, just have them hook in Chat-GPT through an API, let the execs play for 5 minutes, get the C-Suite approval, and then have the vendor disable the interface before delivery (in platforms where it truly is useless, or limit the chatbot interface to help queries where there is very little downside to it screwing up).

When Chat-GPT first became the rage in Procurement, C-Suites insisted on “AI Guided Buying” even though, with a well designed federated catalog (that support standard service forms) — that supported contracts, preferred vendors, (learned) business rules, and budgets — it was five to ten times faster to use the integrated search bar and filters (as per our twelfth entry of our 2025 Myth-busting series where we illustrated just how dumb the Gormless AI could be). After losing out on a few deals due to this lack of functionality (even though they were the buyer’s choice), a fed-up vendor built a chat-bot led guided buying offering on standard LLM libraries. They can turn it on, demo it for the pointy-haired bosses, and turn it off again.

This is critical when the real value of

  • analytics is exploration
  • sourcing is optimization (not error-prone calculations by an LLM that might erroneously multiply a number by -1 because it’s interpretation of the request is to satisfy an arbitrary savings number anyway it can)
  • supplier management is potential issue detection and human review and remediation
  • procurement is honouring contracts, using vetted suppliers, and following rules designed to prevent risk
  • etc.

So take advantage of the fact that they don’t have a clue what (real) AI is and tell them whatever tech you need to solve your problem, regardless of how much AI it does, or doesn’t, have is the latest and greatest AI if that’s what it takes to get the tech you need to solve your problem.

I know you don’t want to lie, but the reality is that is now what you have to do to keep your job, because if you don’t get the tech you need, you’ll fail and be made redundant. And since everyone else is lying too, chances are someone is already saying the tech is AI and you can just point to them (and blame them for the lie).

End of the day, it’s whatever makes you the most productive. That might be a new AI solution, might be a classic ML or NN solution, or it might be two-decades old rule-based automation where you can encode a few rules and have the solution do 95% of your work on auto-pilot without any worry of it ever screwing up (and costing someone their job).

Remember, you’re hired to get things done, not listen to bullsh!t that comes straight from the A.S.S.H.O.L.E.. Don’t get blinded by the hype!

Outcomes is a Dirty Word! Part II

And you shouldn’t have to hear it!

The word of the day is still outcomes, and, no matter where it’s used, it’s still a dirty word.

Yesterday we gave you many examples of where outcome-based pricing has become the norm which includes, but is not limited to:

  • GPOs
  • Recovery Audit Firms
  • AI-first services-as-software
  • Big Consultancy projects

and where every single situation the entire point of the “outcome”-based sales pitch was just a ploy to convince you to pay more for less because

  • suppliers will happily match GPO prices for reasonable commitments as they have to pay the GPO a 1.5% to 3.0%+ administrative fee to get that business, and, moreover, at the head of the tail you can always get as good, if not better, prices using a tail-spend sourcing solution that automates 3-bids-and-a-buy RFQs and auctions (in a standard format that allows suppliers to automate bids) … and this solution often costs a fraction of what you will pay the GPO based on transaction fees (and then the additional savings from being able to quote every category at the head of the tail and not just what the GPO offers adds up to a greater savings)
  • proper retail-centric e-Procurment augmented with supplier and product management could prevent 90%+ of overpayments to begin with (and Lavante, Inc. proved that over a decade ago — why else would PRGX have acquired it and taken it off the market)
  • for every reliable AI-first services-as-software solution (as we all know that hallucinatory Gen-AI enables and amplifies fraud, security risks, bad decisions, etc.), there is a traditional SaaS alternative for a fraction of the price that does the same thing if you can do without the natural language chatbot interface and a slick UX
  • once a consultancy gets you on outcome-pricing, they are going to focus on projects where they know you are doing particularly poorly, employ junior grunts with five year old playbooks guaranteed to increase efficiency and reduce costs (because you are way above market average cost or way below market average efficiency), and use AI to generate their reports and strategy presentations (and hope the junior grunts both do their job and catch all the hallucinations in the prepared documents)

But, as we said in our last post, that’s not the worst of it.

The worst part of all these “outcome”-based pricing offers is that they are masquerading the grift that keeps on taking! (Which is something any American reading this should be quite familiar with by now!)

It’s not the overcharging that is the most insidious part of “outcome”-based pricing models, it’s what’s behind them.

  • GPOs want you to turn over more and more and more of your procurement to them because, the more you turnover, the more you reduce staff, and the more dependent you become … locking you in for years to come as your fees skyrocket to the point where you’re paying more to them then it would cost you to buy a modern sourcing to settle solution (that supports regular and semi-automated tail procurement and a couple of buyers [who will simply review any tail-spend awards that are new or out of bounds compared to past awards and select the suppliers for regular sourcing events, which the platform will automate until award time])
  • recovery audit firms want you believe only they can keep millions in your pockets and software will never solve the rampant overspend the suppliers siphon out of you, will do anything they can to further the narrative that you’re going to lose millions without them, that you shouldn’t even try to improve your procurement processes, and it’s best to just turn more spend over to them … again locking you in for years and years when you could be taking steps towards reducing your overspend to almost 0 with the right technology, processes, and senior category managers preventing that overspend from ever happening
  • AI-first service-as-software firms want you to go all-in on their service, fire your buyers, and believe that only their tech can get stellar results before compute costs go through the roof, the AI bubble bursts, and/or everyone realizes that the whole thing is being orchestrated by the Wizard of New Oz, it’s a bigger circus than anything P.T. Barnum ever managed to assemble, and when the curtain closes, all you’ll be left with is empty pockets (and, when you’re not looking, just like the auto-classifiers of old, they will throw as many Another Intern at the problem as required to ensure you succeed)
  • the consultancies don’t want you do anything yourself because once you realize that, if you hire qualified people and installed modern systems, you can do it just as good yourself, do it for less, and save a lot of money … so they will try to keep up the savings and strategy show as long as they can

In other words, the whole goal of “outcome”-based pricing is to take away your self-sufficiency, capability, and even knowledge and ensure your entire existence is 100% dependent on them. That way, they stay super profitable at your expense with the grift that keeps on taking!

At the end of the day, the only vendor who won’t price on outcomes is one that knows they can’t actually deliver any, even with fakery, because any vendor who can will find a way to use this trend to inflate prices and grift your hard earned gains!

P.S. You shouldn’t be surprised. It’s the same old story with a new name. It’s been going on since the first modern Procurement solution hit the market.

Outcomes is a Dirty Word! Part I

And you shouldn’t have to hear it!

The word of the day is outcomes, and, no matter where it’s used, it’s a dirty word.

You all know that where DEI is concerned, especially in North America, it’s a dirty word. As @Jason Busch will explain in detail at every opportunity, DEI has replaced “equal opportunity”, but unlike properly applied equal opportunity, which took us two steps forward, DEI, or at least its “outcome”-focussed interpretation, has taken us two step backs.

These days, everything has to be measured, and the belief is that if you don’t meet the goals for whatever racial/religious/women/minority metric your organization has defined to be an appropriate racial/religious/women/minority mix for your organization, then you aren’t diverse, equitable, and inclusive and, therefore, you should go out and immediately hire the racial/religious/women/minority employees you need to meet the metric. Merit be damned. No longer is it the most qualified resource, where someone of a minority is hired when two or more applicants are otherwise equal, it’s the most qualified resource of the identified minority, who might not be at all qualified for the job! It’s the token black employee taken to a whole new level! Not only does it reward incompetence, but it insults minorities who study and work hard to be just as competent, if not more competent, than their white male counterparts.

But I digress — we already know outcomes is the dirty word of DEI. But what you don’t know is outcomes is a dirty word across the business, wherever it is used – and Procurement is no exception! Why? It’s only become the popular battle cry since the Age of (BS) AI, whereas its prior use was been limited to situations where the consultancy, vendor, or analyst firm could hide the darkness and venom that the word contained.

More specifically, until recently, outside of DEI, outcome was primarily the verbiage of GPOs, who were doing their best to convince you to turn over a significant percentage of your procurement to them, or recovery audit firms, who were doing their best to convince you their services were the only way to recover your money that your suppliers were assuredly screwing you out of.

But they reality is that they’ve been both misleading you since the get-go. Sure a GPO can get you better prices than you can get on the long tail with their volumes, but that’s only true for the long tail. Moreover, the reality is that the costs aren’t that much less, if any less, than what you could negotiate on your own if you did a winner-takes-all long-tail RFQ to a MRO, office supplies, electronics supplier who could meet the volume across your long-tail needs, especially since that GPO is charging the supplier an administrative fee of up to 3%, and they’d happily give you the same price to NOT have to pay that fee! Add to that the GPO is charging you for their services, and you’re not saving much. Plus, when you work your way up to the head of the tail, you are definitely in 3-bids-and-a-buy RFQ or auction territory, and the application of a well designed tail spend sourcing solution will save you just as much as a GPO, IF NOT MORE!

Moving to recovery audit firms, their outcome-based pitches sound great, as you only pay their 33% if they recover the money on your behalf and fatten your bank account, but here’s the thing. If you had a properly designed retail-focussed e-procurement solution that integrated supplier and product management, did m-way matches, and prevented payments where you didn’t have good receipts that matched the invoice that matched the PO where the prices matched the contract, rejected duplicate invoices, tracked rejected units and associated credits, applied those credit notes against future orders (with the matching product), etc., you could prevent all of those overpayments in the first place — despite the fact that all the recovery audit firms tell you that overpayments (and their services) are unavoidable.

But there are more, and more modern, examples. The worst is AI-first services-as-software vendors convincing you that you should pay based on “outcomes” instead of on a traditional SaaS pricing model. Their rationale? The majority of SaaS tools that you are paying for aren’t offering you immediate, measurable, savings and, therefore, are too expensive. But if you paid for software based on “outcomes”, you’d have measurable value and you could claim the fee was worth it. And the argument sounds convincing, even if it’s complete and total bullshit. The purpose of most software is to increase efficiency, not save money. That’s the value.

And when the real reason they are pushing outcome-based pricing is that they can’t afford to sell based on a SaaS model because the compute costs of their BS AI-first are too high to cover on traditional SaaS pricing — even though there is a traditional A-RPA SaaS application that does everything their app does for a fraction of the cloud and compute cost, as long as you don’t need a fancy-smancy natural language interface or a slick UX. In other words, if they were honest about the true value of their application, they could never charge enough to cover their costs and would be out of business yesterday.

A second, more modern, example is the big consultancies taking a queue from their GPO, Recovery Audit, and now AI-first services-as-software peers and trying to justify their highly inflated pricing (which has skyrocketed over the last decade as they became the go-to firms for all big tech strategy). Especially since it’s the only way they can overcharge for projects where they are primarily deploying a multitude of AI agents (which we know produce utter garbage, just look at the Deloitte fiascos in Australia and Canada) and juniors that they hope will catch and clean up all of the hallucinations in the deliverables. (Because if they charged based on what the tech and juniors were worth, in a climate where no one wants to pay inflated rates for consultants for projects with potentially guaranteed return, they wouldn’t be able to maintain their high rates.)

There are more examples, but by now you should see the common theme. Which is simply this: “outcomes” is always a way to charge you more for less (and sometimes next to nothing) (just like DEI is an excuse to replace people with actual capability with people with next to no capability).

But the worst part, the blatant financial rip-off that always accompanies a (pure) “outcome-based” sales pitch isn’t the worst of it!

(That Vendor Rep) He Ain’t Pretty …

A verbal commentary on the current state of SaaS …

I wore two hats, I was pounding the sand
And on the weekend in a rock & roll band
One Monday aft in the office board room
In walked a rep who looked like Max Headroom

He stared at me and it was scaring me off
He said he worked for the vendor on top
I heard a voice inside me say
He ain’t pretty he just looks that way

We made a date for demo round two
I wore my jeans and he wore a suit
There was this misconception all over town
That he sold software savings by the pound

He said “Buy my app, there won’t be no fuss
I said “Why? you haven’t shown me cost-plus
Watching him leave I heard his grunt-in-tow say
He ain’t pretty he just looks that way

So, I called his office, the admin was there
Said “He’s busy, he can’t come to the phone
I held my breath, decided to wait
A guy like me needs to set some things straight

I got stuck with the sales rep from hell
Didn’t take much time for my hormones to tell
Letting him in has been a grave mistake
He ain’t pretty he just looks that way

His ego wrote cheques incredibly fast
But the software he sold wouldn’t save us the cash
I laughed out loud to my total dismay
He ain’t pretty he just looks that way
He ain’t pretty he just looks that way

He ain’t pretty
He ain’t pretty
He ain’t pretty
He ain’t pretty he just looks that way