Curiosity has always been a passion and driving force behind what I do, which means it’s good that I am not a cat.
I love to ask questions and enter discussions without preconceived ideas of what I will hear. In short, while I always do my homework before a call or a meeting, once the conversation begins, I push what I know or think I know aside and just focus on what the other party is saying.
So, when I ask you the question: Why do so many ProcureTech initiatives fail, sometimes badly? Forget everything you know or have heard and read, and read today’s post with an open mind.
The following is the preliminary response from two of the four Model RAM assessment framework analyses. I will expand to include the other two models over the coming days and report back.
QUESTION 1
What are the odds of a Procuretech selection and implementation initiative succeeding when there is good communication between procurement, IT, and finance, and when said communication and collaboration are lacking?
MODEL 1
Summary Table
Collaboration Level
Success Rate (%)
Key Outcomes
Good communication & collaboration
90–95
High adoption, fast ROI, fewer failures, resilience
Lacking communication/collaboration
50–65
Delays, errors, low adoption, high failure risk
Conclusion
Strong communication and collaboration between procurement, IT, and finance can nearly double the odds of ProcureTech initiative success (90–95%) compared to organizations where these functions remain siloed (50–65%). The difference is driven by better alignment, risk management, and user adoption, making cross-functional teamwork the single most important predictor of successful digital procurement transformation.
MODEL 2
Summary Table
Scenario
Odds of Success
Key Drivers of Success/Failure
Good Communication
75-85%
Clear requirements, aligned vendor selection, smooth integration, high adoption, ROI.
Poor Communication
20-30%
Misaligned requirements, integration failures, low adoption, cost overruns, no ROI.
Conclusion
Good communication and collaboration among Procurement, IT, and Finance yield a 75-85% chance of a successful ProcureTech initiative, driven by aligned goals, clear requirements, and effective execution. Poor communication drops the odds to 20-30%, as silos lead to misaligned selections, technical failures, and low adoption. The gap reflects the critical role of cross-functional alignment in navigating the complexity of ProcureTech projects. Organizational maturity, project scope, and vendor support can adjust these odds, but communication remains the dominant factor.
QUESTION 2
Here is my next question: What is the likelihood that a ProcureTech solution provider will be able to successfully implement its solution in a customer company with poor internal communication and collaboration between procurement, IT, and finance?
MODEL 1
Summary Table
Communication & Collaboration Level
Implementation Success Rate
Good/Strong
90–95%
Poor/Lacking
50–65% (sometimes lower)
Conclusion
A ProcureTech solution provider faces a high risk of failure or suboptimal results when implementing in organizations where procurement, IT, and finance do not communicate or collaborate effectively. The odds of success are typically no better than 50–65%, and often worse, unless the organization addresses these internal barriers.
Vendor-led alignment, training, and technical support mitigate customer silos.
Good Communication (Reference)
75-85%
Clear requirements, smooth integration, high adoption, strong ROI.
Conclusion
The likelihood of a ProcureTech solution provider successfully implementing their solution in a customer company with poor internal communication between Procurement, IT, and Finance is 20-30% with minimal vendor support and 35-50% with strong vendor capabilities. This compares to 75-85% in organizations with good communication, highlighting the challenge of customer silos. Providers with structured methodologies, proactive engagement, and user-focused solutions can significantly improve outcomes, but severe dysfunction limits success to 50% at best. The provider’s ability to act as a facilitator and bridge departmental gaps is critical to overcoming these challenges.
QUESTION 3
How many ProcureTech solution providers take on a customer they know has poor communication and collaboration between stakeholders?
MODEL 1
Approximately 30% of ProcureTech solution providers are likely to take on customers they know have poor internal communication and collaboration between stakeholders, even when these clients have minimal chance for success. This percentage varies by provider maturity: established firms such as Coupa and Ivalua are more selective (closer to 20%), while newer or less established providers may exceed 40%.
The main drivers for accepting such high-risk clients include pressure to meet revenue goals, intense market competition, and client demands. Many providers prioritize short-term sales targets over long-term client success, despite knowing that poor communication and collaboration dramatically increase the risk of project failure.
MODEL 2
75-85% of ProcureTech providers are likely to take on customers with poor communication and collaboration, driven by competitive pressures, revenue goals, and confidence in their mitigation strategies.
This translates to ~3,750-4,250 providers out of 5,000+, with the higher end reflecting the market’s growth-oriented nature and the lower end accounting for selective niche players.
QUESTION 4
How many procurement practitioner companies invest in a ProcureTech solution, knowing they lack the necessary communication and collaboration between participating, essential internal stakeholders?
MODEL 1
Summary Table
Readiness Level
Percentage Investing in ProcureTech
Strong collaboration/communication
Higher success, majority invest
Poor collaboration/communication
20–40% invest despite the risk
Conclusion
Roughly 20–40% of procurement practitioner companies invest in ProcureTech solutions even when they know they lack the necessary internal communication and collaboration. This is a key reason why many digital procurement initiatives fail to deliver their intended value
MODEL 2
Estimate
Number of Companies: ~15,000-65,000 procurement practitioner companies invest in ProcureTech solutions, knowing they lack necessary communication and collaboration between Procurement, IT, and Finance.
Proportion: This represents 15-33% of the ~100,000-200,000 companies adopting ProcureTech, reflecting the prevalence of communication challenges and the drive to digitize despite risks.
Confidence: The range accounts for variability in adoption, awareness, and risk tolerance, with the true number likely closer to the midpoint (~40,000) based on market trends.
Why Companies Proceed
Competitive Pressure: Digitization is critical to stay competitive, with 70% of procurement leaders prioritizing technology to improve efficiency and compliance.
Vendor Support: Providers offer consulting, AI-driven tools, and change management, convincing companies that communication gaps can be addressed.
Cost-Benefit Analysis: Expected benefits (e.g., 10-20% cost savings, 30% faster cycles) outweigh perceived risks, especially with vendor assurances.
Incremental Approach: Some companies opt for modular solutions (e.g., supplier management tools) requiring less coordination, reducing the impact of poor communication.
Leadership Push: C-level mandates for digital transformation often override internal concerns, driving investment despite known issues.
TODAY’S TAKEAWAY
The old saying immediately comes to mind: It takes two to tango.
What is your takeaway from the above?
ADDED NOTE: The above explains the continuing use of a technology-led equation-based model versus the proper use of a human-led agent-based model. At what point does the cost of the former model become too high to not begin using the second model?
Procurement Insights
What are the two real reasons procurement initiatives fail – sometimes badly?
Posted on April 29, 2025
0
Curiosity has always been a passion and driving force behind what I do, which means it’s good that I am not a cat.
I love to ask questions and enter discussions without preconceived ideas of what I will hear. In short, while I always do my homework before a call or a meeting, once the conversation begins, I push what I know or think I know aside and just focus on what the other party is saying.
So, when I ask you the question: Why do so many ProcureTech initiatives fail, sometimes badly? Forget everything you know or have heard and read, and read today’s post with an open mind.
The following is the preliminary response from two of the four Model RAM assessment framework analyses. I will expand to include the other two models over the coming days and report back.
QUESTION 1
What are the odds of a Procuretech selection and implementation initiative succeeding when there is good communication between procurement, IT, and finance, and when said communication and collaboration are lacking?
MODEL 1
Summary Table
Conclusion
Strong communication and collaboration between procurement, IT, and finance can nearly double the odds of ProcureTech initiative success (90–95%) compared to organizations where these functions remain siloed (50–65%). The difference is driven by better alignment, risk management, and user adoption, making cross-functional teamwork the single most important predictor of successful digital procurement transformation.
MODEL 2
Summary Table
Conclusion
Good communication and collaboration among Procurement, IT, and Finance yield a 75-85% chance of a successful ProcureTech initiative, driven by aligned goals, clear requirements, and effective execution. Poor communication drops the odds to 20-30%, as silos lead to misaligned selections, technical failures, and low adoption. The gap reflects the critical role of cross-functional alignment in navigating the complexity of ProcureTech projects. Organizational maturity, project scope, and vendor support can adjust these odds, but communication remains the dominant factor.
QUESTION 2
Here is my next question: What is the likelihood that a ProcureTech solution provider will be able to successfully implement its solution in a customer company with poor internal communication and collaboration between procurement, IT, and finance?
MODEL 1
Summary Table
Conclusion
A ProcureTech solution provider faces a high risk of failure or suboptimal results when implementing in organizations where procurement, IT, and finance do not communicate or collaborate effectively. The odds of success are typically no better than 50–65%, and often worse, unless the organization addresses these internal barriers.
MODEL 2
Summary Table
Conclusion
The likelihood of a ProcureTech solution provider successfully implementing their solution in a customer company with poor internal communication between Procurement, IT, and Finance is 20-30% with minimal vendor support and 35-50% with strong vendor capabilities. This compares to 75-85% in organizations with good communication, highlighting the challenge of customer silos. Providers with structured methodologies, proactive engagement, and user-focused solutions can significantly improve outcomes, but severe dysfunction limits success to 50% at best. The provider’s ability to act as a facilitator and bridge departmental gaps is critical to overcoming these challenges.
QUESTION 3
How many ProcureTech solution providers take on a customer they know has poor communication and collaboration between stakeholders?
MODEL 1
Approximately 30% of ProcureTech solution providers are likely to take on customers they know have poor internal communication and collaboration between stakeholders, even when these clients have minimal chance for success. This percentage varies by provider maturity: established firms such as Coupa and Ivalua are more selective (closer to 20%), while newer or less established providers may exceed 40%.
The main drivers for accepting such high-risk clients include pressure to meet revenue goals, intense market competition, and client demands. Many providers prioritize short-term sales targets over long-term client success, despite knowing that poor communication and collaboration dramatically increase the risk of project failure.
MODEL 2
75-85% of ProcureTech providers are likely to take on customers with poor communication and collaboration, driven by competitive pressures, revenue goals, and confidence in their mitigation strategies.
This translates to ~3,750-4,250 providers out of 5,000+, with the higher end reflecting the market’s growth-oriented nature and the lower end accounting for selective niche players.
QUESTION 4
How many procurement practitioner companies invest in a ProcureTech solution, knowing they lack the necessary communication and collaboration between participating, essential internal stakeholders?
MODEL 1
Summary Table
Conclusion
Roughly 20–40% of procurement practitioner companies invest in ProcureTech solutions even when they know they lack the necessary internal communication and collaboration. This is a key reason why many digital procurement initiatives fail to deliver their intended value
MODEL 2
Estimate
Why Companies Proceed
TODAY’S TAKEAWAY
The old saying immediately comes to mind: It takes two to tango.
What is your takeaway from the above?
ADDED NOTE: The above explains the continuing use of a technology-led equation-based model versus the proper use of a human-led agent-based model. At what point does the cost of the former model become too high to not begin using the second model?
30
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