It’s January of 2025 and we’re back with a new Magnus Monday article! This time of the year there tends to be plenty of predictions flying around, so I thought I’d take a slightly different approach. Instead of trying to predict what will happen, I’ll tell you want I would like to see happen! Those that know me or have read my articles probably won’t be surprised by any of these wishes. Away we go!
Fix Your Data
In this day and age, data management needs to be a foundational capability for procurement departments. But most organizations still struggle to maintain accurate and up-to-date supplier data and the transactional data is often incomplete. While there’s a clear connection between supplier and transactional data, different approaches are needed for each.
So, if you’re not already, start using a supplier management module from your S2P suite provider, or use a more specialized supplier management solution (like apexanalytix, Graphite Connect or Kodiak Hub) to make sure you keep your supplier data complete, correct, and up-to-date. Start using eInvoicing (sooner or later you will have to for regulatory reasons anyway), and either use the capabilities of your S2P provider or use a specialist like Basware or Pagero (now part of Thomson Reuters). Drive more spend to POs using either P2P solutions or, even better, intake management and procurement process orchestration solutions (IM&PPO can help you cover more spend than traditional P2P) to ensure better transactional data (more on this below).
Finally, use spend analytics to analyze and visualize your data (it will help you understand where you have data quality issues).
Focus on the End User
It doesn’t matter how “good” a solution is if no one is using it. This should be obvious, but too many procurement organizations seem to miss this point and select solutions that focus on the needs of the procurement organization rather than it’s “customers.” And it’s not only about the solution itself but also making it easier for end users to know which solution to use or have it chosen for the end user. This is the reason I’m so positive around the emergence of IM&PPO solutions that provide that single front door to procurement, whether it’s from specialists like Zip or ORO, or from S2P providers like Ivalua, GEP or SAP Ariba that have (or are about to) release these capabilities.
When it comes to solutions that are primarily used by the procurement department, this changes a little bit. Having deeper functionality becomes more important and as the users are procurement professionals, higher expectations of attending training (and taking it to heart) and embracing more complexity, is reasonable. This does not mean usability is not important, just that the balance between functionality and ease of use changes somewhat.
Make eSourcing Mandatory
Not sure how many times I’ve shouted about the need to increase eSourcing usage, but I will continue until I’m happy with the adoption rate (which I probably never will be, so you’ll hearing this message regularly).
Given the options and availability of different sourcing solutions in the market today, there are no excuses not to use eSourcing. Some organizations will be able to use a single eSourcing solution while others will need to combine different solutions for different categories of spend. The suite providers like Esker/MarketDojo, Zycus, or any of the S2P providers mentioned above, offer eSourcing capabilities that can cover a large part of your spend.
Coupa and Jaggaer takes it a step further with their sourcing optimization capabilities that allows you to source even the most complex categories efficiently and effectively —that said, optimization provides a lot of added value in less complex categories as well, but that’s a different discussion. The same is true for Keelvar, that also adds sourcing automation to the mix, enabling you to automate sourcing of less complicated categories. Besides Keelvar and some of the S2P providers, specialists like Globality and FairMarkit also offer sourcing automation. At the same time, we have providers like Pactum automating negotiations in slightly more repetitive categories and Arkestro leveraging advanced analytics to suggest anchor pricing to make the sourcing process more effective.
So, whatever categories of spend you have, there are eSourcing solutions out there for you. Thus, no excuses, start using (more) eSourcing!
Show Me the Game Changing Gen AI Use Cases
Solution providers have been hyping up AI in general and generative AI in particular for quite some time now. In 2025, I would like to see some more game-changing use cases of generative AI. And I want to see/hear customers actually using them.
Generative AI promises a lot, but so far, the use cases have been quite underwhelming while the more transformative ones seem to be road map items. Not to mention the fact that no one (or at least very few) seem to talk about the issues with hallucinations and accuracy. But I’m hoping that 2025 will be the year we see the actual value of GenAI proved at scale and in production!
If you want to discuss any of the points or solution providers above (or others for that matter), don’t hesitate to reach out to Ardent Partners.
