As a follow-up to my previous post, I would like to open this post with the following statement: AI, GenAI, and ProcureTech success, in general, have nothing to do with technology. In other words, it is not an IT department play – at least not at the beginning.
If companies continue to view AI, GenAI, and ProcureTech as the center of the digital transformation of the procurement practice, they are continuing to use an equation-based model that has failed to deliver the expected results 80% of the time over the past many decades.
I see the big enterprise companies with a grocery-type basket using the solution maps as their personal grocery store, where they will select the best logos they feel will help them build an in-house solution.
Remind me to tell you about my meeting with RBC in the early 2000s when their top IT execs had me in for a meeting to see how my RAM solution worked. In short, the solution provider logo maps are nothing more than incubator stores for big companies.
What is interesting is that little has changed since the RBC fishing expedition. For example, doesn’t anyone wonder what became of the American Express acquisition of Nipendo in 2023? History is a great teacher!
Not So Random Thoughts#2
The following is a starting point for understanding why big enterprises have historically struggled with successful “tech-centric” initiatives.
I had a discussion earlier today with a student working on their Master’s Thesis. Here is a high-level overview of that discussion, including the key points that relate directly to this post’s subject matter:
Overview
The Expert Interview on “GenAI in Procurement,” conducted by a student for his master thesis, featured insights from Jon Hansen, a seasoned expert with over 40 years of experience in high tech and procurement. The discussion began with Hansen’s background, including his development of the ‘strand commonality’ theory and an AI-driven procurement platform to improve efficiency for the Department of National Defense. He underscored that Generative AI (GenAI) represents an evolution rather than a revolution in existing AI technologies, emphasizing the necessity of human expertise alongside AI tools. Key themes included the importance of understanding people, processes, and technology, as well as the challenges of category management and strategic sourcing in procurement. Hansen advised that procurement professionals must evolve beyond transactional roles and broaden their skills to meet future demands. The meeting concluded with Hansen committing to share relevant case studies and potential interviewee introductions with the student, highlighting the need for knowledge enhancement and idea challenges within the field.
NotesEdit
🎓 Introduction and Background (00:04 – 04:42)
The Student is conducting the interview for master thesis
Jon Hansen has 40+ years experience in high tech and procurement
Interview structure: background, AI applications, current adoption, challenges, and transformation of procurement process
💡 Jon Hansen’s Experience and Insights (06:15 – 23:08)
Developed ‘strand commonality’ theory funded by Canadian government
Created architecture for AI-driven procurement platform
Emphasized agent-based vs. equation-based model
Improved Department of National Defense procurement efficiency
Highlighted importance of understanding people, process, technology stream
🤖 AI and GenAI in Procurement (24:27 – 37:23)
GenAI is not revolutionary, but an extension of existing AI technologies
Stressed need for human expertise alongside AI tools
Discussed challenges of category management and strategic sourcing
Emphasized importance of understanding product characteristics (dynamic flux vs. historic flatline)
🔄 Implementation and Future of Procurement (37:32 – 45:11)
Advised focusing on people and processes before technology
Discussed need for procurement professionals to evolve beyond transactional roles
Emphasized importance of understanding all aspects of business operations
🔮 Future Outlook and Closing Thoughts (45:13 – 50:24)
Predicted continued importance of agent-based modeling
Stressed need for procurement professionals to broaden their knowledge and skills
Emphasized importance of challenging ideas and stimulating deeper thought
I will likely have more thoughts to add in the coming days and weeks. In the meantime, the above should be a good starting point for meaningful discussion.
Procurement Insights 
DPW Remote Dispatch: A Shopping They Will Go!
Posted on October 10, 2024
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As a follow-up to my previous post, I would like to open this post with the following statement: AI, GenAI, and ProcureTech success, in general, have nothing to do with technology. In other words, it is not an IT department play – at least not at the beginning.
If companies continue to view AI, GenAI, and ProcureTech as the center of the digital transformation of the procurement practice, they are continuing to use an equation-based model that has failed to deliver the expected results 80% of the time over the past many decades.
What is needed is an agent-based development and implementation model – Are you chasing solutions or solving problems? (Part 1 of 3)
It is within the above content that I share the following random thoughts.
Not So Random Thoughts #1
What are your thoughts on this morning’s Kearney presentation, James Meads?
Here is the link – https://bit.ly/3UrN1JJ
I see the big enterprise companies with a grocery-type basket using the solution maps as their personal grocery store, where they will select the best logos they feel will help them build an in-house solution.
Remind me to tell you about my meeting with RBC in the early 2000s when their top IT execs had me in for a meeting to see how my RAM solution worked. In short, the solution provider logo maps are nothing more than incubator stores for big companies.
What is interesting is that little has changed since the RBC fishing expedition. For example, doesn’t anyone wonder what became of the American Express acquisition of Nipendo in 2023? History is a great teacher!
Not So Random Thoughts #2
The following is a starting point for understanding why big enterprises have historically struggled with successful “tech-centric” initiatives.
https://www.slideshare.net/piblogger/sap-a-propensity-for-failure
Not So Random Thoughts #3
I had a discussion earlier today with a student working on their Master’s Thesis. Here is a high-level overview of that discussion, including the key points that relate directly to this post’s subject matter:
Overview
The Expert Interview on “GenAI in Procurement,” conducted by a student for his master thesis, featured insights from Jon Hansen, a seasoned expert with over 40 years of experience in high tech and procurement. The discussion began with Hansen’s background, including his development of the ‘strand commonality’ theory and an AI-driven procurement platform to improve efficiency for the Department of National Defense. He underscored that Generative AI (GenAI) represents an evolution rather than a revolution in existing AI technologies, emphasizing the necessity of human expertise alongside AI tools. Key themes included the importance of understanding people, processes, and technology, as well as the challenges of category management and strategic sourcing in procurement. Hansen advised that procurement professionals must evolve beyond transactional roles and broaden their skills to meet future demands. The meeting concluded with Hansen committing to share relevant case studies and potential interviewee introductions with the student, highlighting the need for knowledge enhancement and idea challenges within the field.
NotesEdit
🎓 Introduction and Background (00:04 – 04:42)
💡 Jon Hansen’s Experience and Insights (06:15 – 23:08)
🤖 AI and GenAI in Procurement (24:27 – 37:23)
🔄 Implementation and Future of Procurement (37:32 – 45:11)
🔮 Future Outlook and Closing Thoughts (45:13 – 50:24)
I will likely have more thoughts to add in the coming days and weeks. In the meantime, the above should be a good starting point for meaningful discussion.
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