Build vs Buy in Digital Procurement

Super Technical Post. I took some time off LinkedIn (probably around 2-3 months, which is why there are fewer videos on Supernegotiate). This time off has been extraordinary in terms of doing Procurement AI experiments.

I am blessed to have experience in procurement category management and data science/programming. So, I went on creating rapid prototypes of some Procurement use cases.

Here are some shocking but 100% execution based findings

1) You can build a basic esourcing system under 45 days, which is better than most of the Gartner-ranked vendors. I have done it (I'd probably put it live for public consumption sometime next month). It works; it doesn't have fancy features, but it gets you all the savings/cost avoidance.

Learning: It is ridiculous to spend time and money on basic esourcing suites in 2025. Either buy a perpetual license or build your own in 45 days.

2) Spend Analysis: Solving for taxonomy classification remains a non-performance for all Spend analysis providers. This is one area where machine learning yields poorer results than fixed rule-based engines. Due to a lack of procurement expertise, all platform providers expect customers to do the heavy lifting in terms of data classification. This model will be changed soon.

So, building from a simple rule-based engine for classification to a visualization layer, you can build a simple spend analysis platform in 30-45 days.

Easier than expected experiments:

3) Contract Management: About 14-21 days

4) Supplier Performance Management: About 14-21 days

You see where I am going with this? Incurring Opex cost on licenses for the basic Procurement platform is no longer a wise costing model. Unless there is value attached to how the platform is used, and this comes from how the data is being utilized.

This is where the next disruption will come from. I don't think we will pay any cost for simple digital procurement tools in 5 years' time. Rather, all digital procurement platforms will become services on demand.

That model will have less pollution in terms of implementation delays, change management etc. These lines up with my personal ambition for doing experiments at Supernegotiate, a Tool-less digital Procurement experience!

A) Here is one advice for Procurement Platform providers

- Your technology is no longer the differentiator.

- You need to now get involved in your customer's operation and ensure the data being generated is used and the benefits promised in powerpoint slide decks are realized.

- Invest in something called "Customer Success". A dedicated team of experts to provide insights specific to the Procurement event and then provide service to execute on those insights. This is how you win in 2025 (and not by pure powerpoint slide play)

B.) Here is one advice for CPOs

- Build vs Buy in Procurement tools is a solid metric to measure and Supernegotiate experiement proves that.

- Build your digital team with category management + data science background!