Transcript 0:00 What do you call an app you made an account for but can't remember how to log into? Software? That's your opener? [upbeat music] Computers have lots of memory, but no imagination. 0:12 Man is a slow, sloppy, and brilliant thinker. Machines, on the other hand, are fast, accurate, and stupid. AI will do what you tell it to do, but that may be very different from what you had in mind. 0:24 Technology presumes there's just one right way to do things, and there never is. Computers are useless. They can only give you answers. 0:33 For a list of all the ways technology has failed to improve our quality of life, please press three. Hey, everybody. 0:40 Welcome to ProcureTech Unpacked, the show that's there to help you procurement pros cut through marketing to understand the technology shaping our function. Matt, I feel like, uh, you know, 0:52 you don't have, uh, creating jokes is, is part art, and you don't have a sufficient appreciation for, for what just happened, uh, at the outset here. 1:00 I mean, the only thing I can say, Joel, is you're obviously stepping into this dad role really strongly. [laughs] Yeah. 1:08 Well, you know, if, if my high school days are any indication, I used to get compliments on my dad jokes all the time, so I feel like I was just made for the role. 1:15 [laughs] But, uh, I- I'm more, I'm more into granddad jokes, I think now at my age. [laughs] Uh, so today, y- uh, thanks everybody for tuning in. 1:23 We're talking about the difference between a software vendor and a partner, a distinction that's easy to gloss over, but that to me has massive implications on ROI from your software investments. 1:34 It's also Matthew's last episode as co-host for the Deep Dives, so it's, it's bittersweet. Uh, and we'll get to why. We'll get to why a little lat- later in the show. 1:44 Uh, introduce the new co-host on the back half, so stay tuned for that. But we will have fun at least one last time, Matt, together, right? Yeah, let's do it. I'm excited. 1:54 So last time we were talking about our trips and all this, so let's just take a second to catch up here before we get to market signals. What, what have you been up to the last couple weeks? 2:03 Yeah, so the trip to Switzerland and, and Europe g- more generally is, is still in the... Well, it's planned. Yeah, we're going. I mean, it's in a couple of weeks' time, but looking forward to that. 2:13 I did have a trip to Florida, so for the first time ever, I was on the, on the Gulf Coast of Florida at 30A, which is the place that everybody from Atlanta goes to, I think. 2:24 First question, why do we go to Florida beaches during the summer? Just seems stupid to me. It's too hot and, and everything else. But actually, I had a really, really good time, and we, we biked a lot. 2:34 When I say biked, we borrowed some electric bikes and kind of cruised around on those. Cheated. [laughs] Yeah. We did 30 miles and yeah. Yeah, it was fun. It was good. 2:44 The battery gave out in the last 500 feet, and I was really struggling then, I must say. [laughs] Yeah, 'cause they're heavy, right? Like, without the battery. 2:51 It, it was really heavy, but it's pretty flat down there, so, uh, it w- no, it was really fun. What about you? What have you been up to? Uh, I, I also... Last time we were talking about our trips, right? 3:01 I think they're just, like, in our mind as somewhere to get to, 'cause I haven't done the camping trip either yet. But I did unwittingly send my kids to a religious summer camp, so that was funny. [laughs] Interesting. 3:14 [laughs] Okay. Yeah, I think my, my- Funny for them or funny for you? No, well, it's, it's funny because I think my wife had mentioned it, right? 3:20 But we essentially wanted to send them to, like, an outdoorsy camp, so there's horseback riding, and they spend all day, like, in the woods essentially. 3:27 There's, um, bow and arrow, you know, lots of games and sports and all this. So, so that was the intention, but I had kind of forgotten that they, there was also kind of a, you know, a r- religious underpinning. 3:39 And we're not very religious by nature, but I have, I have no, no qualms with it. 3:45 Uh, but it was just funny to pick them up, like, at the end of the first day, and then, you know, they started telling me all the stories, right, of, uh, all the religious stories, which is, which was really fun, like, as a conversation with them, just to, to, to explore that and, uh, just to be caught off guard a little bit, so that was pretty funny. 4:02 But they had a great time, so, uh, we'll probably send them back again, uh, in further future years. That sounds fun. I mean, I'd, I'd love that. A week of archery and horseback riding and stuff. Sounds fun. 4:15 Yeah, summer's not the same when you're a child, right? Versus, or a teen versus, [laughs] versus adulthood, for sure. 4:21 Uh, but that's- No, I was telling you recently, I hardly go outside during the summer in, in Atlanta, but yeah. Yeah. Well, you sh- I don't know. You picked... 4:27 So you went from, like, UK to, to Atlanta or, or Southern US, right? It must, it must be blazing. It's blazing, but it's blazing in Europe now, right, as well. That's true. So nothing... It's, it's caught up. 4:39 That's true. It's gonna be blazing. It's been hotter there some days than it has been here, so I'm not sure. Very good. And I think that's a great cheesy dad joke segue to our hot topics for market signals. Oh, nice. 4:51 [laughs] So let's get to it. [upbeat music] Yeah, so I wanted to talk about Verizon. Verizon's launched their latest 2026 DBIR, so Data Breach Investigations Report. 5:06 They, they publish this every year, and it's been looking at, you know, where are the, the big issues, where are the data loss protection needs to be involved and everything. 5:15 And this year it's been focusing, like everything, on shadow AI or on AI, but shadow AI specifically. 5:24 So it says that employees' use of unapproved or shadow AI surged to 45%, up from 15% this time last year, if you like, and it's the third most common non-malicious data leakage related activity. 5:43 This is huge, and it's, and it's obvious it's gonna happen, and we've talked about this to some extent already. 5:48 But this is the confirmation that it's, that it's happening, and other companies are finding exactly the same thing. 5:55 So basically what it's, what's happening is the companies are saying, "Yeah, you can use this AI, or you can use that AI, and we're gonna lock it down, and, and that's all you're allowed to do." 6:03 And people are going around the system and using their own. So they're using Claude, and they're using ChatGPT, and they're using all these other ones that we've talked about over the last few weeks. 6:13 This is an impact on procurement because every personal AI account, it's an unvetted supplier relationship, basically, first of all. 6:24 You know, and the big ones, fine, maybe they've been vetted, but they've been vetted and not accepted a lot of the time. 6:30 Every AI browser extension that you allow is potentially a supplier integration nobody wanted or approved. Are you pulling stuff out of your SharePoint into this system? 6:41 If that's the case, you've got some, some data issues going on. And what can you do about this within procurement, but also within IT more specifically? 6:50 You can start to ban stuff and, and I've, I've had some experience of, of this in the last couple of days, honestly, of not being able to use tools that I'm s- used to using. So the instinct is, yeah, ban it. 7:04 But if you're banning that useful technology, people are gonna find ways to work around it. They're gonna use another system. They're gonna use personal accounts. 7:13 They're gonna use unmanaged browsers, maybe not in your devices even. 7:17 It's kind of like the bring your own device lessons that were learned back in the day of, of allowing people to do their own thing and manage their own systems. So I don't know. What do you think about it? Yeah. 7:28 Well, it, it reminds me of, you know, the same discussion we had around when SaaS was exploding, you know, at the turn of, like, 2010s of shadow software as a s- ser- s- software as a service contracts. 7:39 And I think it's very much the same lessons that we need to pull here, which is you've kind of touched on them, right? 7:44 But, like, w- on one side, yes, you wanna lock down as much as possible, you know, data leaks from, you know, exporting, exporting data outside the firewall. 7:53 But on the other side, I think it's super important to say, "Hey, you need, you need to give people tools 7:59 that are competitive in terms of their performance so that they can do their work in the most efficient manner," because to your point, they're gonna wanna do that. 8:06 They're gonna, they're gonna wanna use the path of least resistance to get the work done. 8:10 And so y- you need to be-- to have that digitization or digitalization strategy to get to be really active with the different business functions, procurement included. 8:20 And so as you know, you said, "Hey, there's a procurement concern," but there's also, um, kind of pointing to the IT concerns. 8:26 But to me, it further reinforces the point we often make on the show around, like, needing to partner with IT as much as possible around, around these suppliers, around these things so that, you know, you're, you're essentially having to develop change management and training chops in procurement as well to help achieve your business objectives, which is like, hey, reducing shadow AI, shadow IT, because these are all supplier relationships, and we've got these holes in the ship where there's sensitive data, personal data, private data, competitive data leaking, leaking out. 8:58 So yeah, I think it-- When I read the last study, I think it was last year, I read a study, can't remember which one it was, but it was something like 30 or one in three, one in three conversations with an LLM ends up having either sensitive or personal data infused into it, if not at the front, then, like, as you go on because you get an output, it's too generic, you wanna make it your own, you wanna make it useful. 9:20 So you end up spilling data that, you know, in that conversation at some point in time. So- Even, even in as much as, you know, write in my voice, so here's some documents I created before. 9:31 Those documents contain information that you might not wanna share. Yeah. But you're just doing it to train the, the LLM. Yeah. It's-- Yeah, and it, there's an intersection there, right? 9:41 It's between IT, it's between legal, it's between... And, and pr-procurement, basically, as far as we're concerned. Mm. You know, who controls what? How do you control it? 9:51 How do you write contracts to control it in the future as well? Because- But I don't think it's, like, control is enough, right? 9:58 I think that's the, the key point I wanna make on that story is, you know, if you try to just use control, like, your pe- people are gonna go outside, right? 10:07 So it's, it's accepting human nature, which is people are gonna-- The toothpaste is out of the tube. 10:12 People know these tools exist now, and so you need to give them a way to use them within your firewalls, within your, your organization in the safest way possible as you're still figuring it out because it is still new, right? 10:25 Yeah. It certainly is. Yeah, and different tools have different uses, and I think that's what people need to understand. You know, I, I've got Copilot, I can use Copilot, but it's not the best [chuckles] for some things. 10:35 The, yeah, the performance might not be the same. So how do we- [chuckles] For sure... right, how do we, how do we bring the capabilities to the business in a, in a way that makes sense, right? Instead of- Yeah... 10:44 controlling. Ex- exactly. What about you? What have you been, what have you been seeing out there? Yeah. The, the second story I wanted to bring attention to is, is a doozy in my mind. It's a- again, right? 10:53 Like, we keep coming back to these data stories, but Spirit Airlines is, is currently going through bankruptcy. 10:59 But instead of just, you know, selling off the assets, so airplanes or the hard assets like airplanes, spare jet engines, they found, like, a new asset class to put on the chopping block, right? 11:10 So their, their own internal operations data. So they put it up for auction, and who bought it? 11:16 None other than Google for $10 million, which to me is peanuts, uh, because here's what the data set reportedly includes, right? 11:24 So internal communications, there's 100 million emails across 80,000 internal accounts, and of course, emails will have, you know, communications with third parties, whether they be customers or partners or whatever. 11:38 500 million, uh, Microsoft Teams messages, uh, the history of them. They have proprietary tech and operations as well, so 30 million lines of custom code, 11:48 667,000 internal IT support tickets, aircraft maintenance logs, 175,000 employee productivity and HR records going back to 1986, market and pricing data, so 700 and-- or 7.5 billion historical passenger transaction records since tw-2008, and 7.2 billion records of competitor flight pricing curves. 12:11 And Google's plan is to take all of this and dump, dump all this real world chaotic corporate data into their AI models, teach them more about enterprise workflows, customer service, and develop new products for the airplane-- airlines industry. 12:25 Of course, the Association for Flight Attendants, CWA, called the deal outrageous. They're trying to block them in court. It's not done yet, but it is in, in process. 12:35 And as part of the deal, you know, to, to address what you may be... 12:39 The, the, the red lights that may be flashing in your head right now, Google says, "Hey, we're giving all of this data to a, a neutral third party, and they're supposed to cleanse it of everything that's sensitive or personal data before we get the final data set." 12:53 But to me, this sets like a wild precedent, right? 12:56 If, if a company goes under, wants to monetize its data assets, does all your workplace banter suddenly become like a giant, you know, tech corporation's AI training data? That's a new, brave new world in, in my mind. 13:09 I don't know what your initial reactions are, Matt. Yeah. First of all, it, it makes me think, you know, we've, we've always talked about data as your company's biggest asset. So yeah, 10 million, is that enough? 13:21 But it's, it's proving that it is. It's proving how important it is and how vital it is to other companies to have as well. 13:29 You know, if, if Google's willing to pay a, a decent amount of money for that, then, then it's proving that, first of all. 13:37 I think it's also showing the difference between different parts of the world because, you know, selling employee data or HR data, try and do that in Germany or, or France. That could be interesting. But [coughs] 13:50 obviously my, my biggest worry, yeah, it's going to a third party, so that's another person in the chain that gets the data as well, but it's going to a third party to clean the data up. But y- you can reconstruct data. 14:02 Finding information within it and finding patterns is, is obviously what they're most interested in. I get that. But it's similar to what we were just talking about. You know, it's data leaving the front door. 14:15 In this case, it's actually sold. It's going through the front door. Mm-hmm. And, and, you know, it's very open and, and honest about it. 14:23 But what we just talked about with the, the DBIR study from, from Verizon, it's, it's kind of going through the side door or the back door or through the basement. But 14:33 it's just, again, coming back to that, that whole data privacy, the whole dynamic is changing, and the, the use of data is changing dramatically as, as we go as well. 14:46 So yeah, it will probably result in some much better solutions out there, and hopefully, you know, we won't have these big problems with airlines and, and large lines at the airport and things like that, and maybe the maintenance improves and everything else. 15:00 But also it, it opens these, opens the door for, for leakage again of information, which is, you know, one of my biggest concerns with AI more generally. It's- Oh... yeah, it's scary. No, absolutely. 15:14 And so- It's rough... for me, for procurement leaders- Yeah... the takeaway is also like, hey, yes, centralizing data can be a good thing, can, can bring us a lot of value, right? 15:23 But it's also like, you know, there might be situations where it's not, uh, where, you know, it, it might create too much of a, too much of a risk if it does get out there in one, one way, shape, or form, right? 15:32 So I'm just gonna be curious to see how this evolves, you know, on the legisla- legs- legislative front and, and, you know, is, is this really... 15:40 There's this book that I love by Kevin Kelly, who's the old editor of Wired, that's... I think I referred to it on the show before. 15:45 It's called The Inevitable, and there's like, he goes through 11 forces that he feels are inevitable in terms of how the world is evolving from a technology standpoint, and like openness of data, right, sharing all of this stuff, like he sees it as i- inevitable in, in, in one way, shape, or form, either legally or illegally or illicitly, and we've seen it with like music sharing and file sharing and videos. 16:08 A- and so it'll be interesting. I just, I'm curious as a third-party viewer as well to just follow this story and see 16:14 how does this evolve and how do we, how do we put the guardrails, how do we put the, uh, you know, the safety measures in place to, to, to get the outcomes, uh, safely? Yeah. Yeah, absolutely. 16:25 You know, and for procurement specifically, you know, what happens if your, if your supplier goes bust? What happens to that data that they've already stored? 16:35 How much is that worth to anybody out there, and, and does the, does the, uh, accountancy firm have the right to sell it? Mm. Mm-hmm. 16:46 And, and goes back to your contract clauses and how are you structuring that with, with suppliers, right? 16:51 And I think it's a great segue, actually, into our, our deep dive topic today, which is what, what should you actually expect from the company you buy software from? 17:00 We want to contrast two different definitions of, of software providers. Like I see a software vendor versus a software partner, and we'll define what that means in the next segment here. 17:11 If, if you're enjoying the show, send it to a friend or colleague and follow us wherever you get your podcasts. As always, this helps us out tremendously, so let's get to the deep dive. 17:20 [upbeat music] All right, so most organizations buy procurement software like it's a commodity, at least from what I've seen in my experience. So they sign, they license, they hope implementation goes okay. 17:37 It, it's very transactional, even though that may not be the intent, and it's the same thing not just for procure tech software, but a lot of software in general, right? 17:46 So that, that's fine, but I think there's a missed opportunity there for a lot of companies to segregate software into two categories. One which is s- you know, this transactional software. 17:57 You're just, it's a tool that you need to be productive. And the second one is partnering with a software vendor, right? 18:03 Getting business capabilities through software because I think sometimes we have this expectation of a software provider who's, you know, in their view, they're just providing software, but you're, you've misaligned incentives in the buying process where you're, you're also buying software, but your expectations are That you're gonna get a partner. 18:24 And second, because there's a tremendous opportunity to unlock business value if you try to partner instead of contracting software, there's that opportunity there if you do it correctly to, to generate exceptional amounts of value. 18:37 And so I define both terms here as one software provider, it's a company you contact to or you contract to deliver a product. The relationship's transactional, mostly done at signature. 18:47 So, you know, you get logins, you go live, there's a handoff, and success on their end is measured by renewal of the contract, right? Does the technology... Can you use it and generate value from the tech by yourself? 18:58 And if something breaks, you file a ticket with the global entity and, like, cross your fingers, right? Much like using Facebook and trying to get anything fixed on Facebook if you use it for business. 19:08 Whereas on the other end of the spectrum, you've got a software partner where to me it's a company that treats you, uh, treats your outcome as the product, and their incentive is to track your success, not just your signature. 19:21 And then the relationship is much more about, it's much more involved than just renewing your contract over time, right? It's about making you successful. 19:28 And then, of course, you can have people in the middle between those two positions as well. But to me, it's really being purposeful about, okay, when we're buying this piece of software, what category does it fall into? 19:40 And then how do we structure the process to ensure that we're getting either/or, right? I don't know, Matt, like, you, you know, you're in the software vendor space. How do you, how do you think about this? 19:52 Y- yeah, and, and we'll talk about me being in the software vendor space later. But, you know, yeah, for me, a provider, so a, a software provider, somebody who brings you a tool and becomes a, a vendor. 20:06 A provider sells access, whereas a, a partner will help you to change how work gets done. I think that's, that's the difference for me. And this is particularly difficult to manage within procure tech 20:19 because often you're talking to the procurement team about how we can do things better with you and how we can make things more exciting and, and we can, you know, make you more efficient and more effective and bring this value to you. 20:32 And then you get to the contract side, and the same person comes to you with a different hat on and says, "Okay, now we need to talk about payment terms, and now we need to talk about, you know, everything else that goes into a contract and, and, you know, terms for convenience and all those kinds of things." 20:46 Those kinds of things shouldn't even be a discussion in a partnership almost. I mean, yeah, payment terms, you have to pay your invoice at some particular point in time. 20:55 But you shouldn't even be thinking about terms for convenience if you're going into a true partnership because it, it should be all about making those values that you define come true during the whole process. 21:09 And that should start before the RFP, honestly. You should be starting to define... You know, not asking, "Can the solution do this?" Asking, "What can you do for us as a company? 21:24 And what, what difference will this make to us? How will this make us more efficient, more effective? How will this bring us value? And what else should we be doing as well?" Hmm. 21:35 And that's a difficult thing to bring into an RFP, I find. You know, you get a list of 350 questions that you need to answer. Does it have this? Well, yeah, it has that in some form. It doesn't matter. 21:48 Can it achieve this is much more important. Uh, and I think that's the start of the whole partnership journey. And like you say, you, you need to define, is it a critical part to my business? 22:02 You know, if it, if it's just storing numbers and storing information for me, it's, doesn't need to be that innovative. 22:10 If it's talking about how you do your process, how you get from A to Z in the best possible way, then you're talking about partnerships, I think, and, and yeah, having that nuance between the two. 22:22 Not everybody can be a partner. You don't have the time or the energy to be partners with everybody. Agreed. But, you know, most procure tech is bringing some value, and you need to define that value. Yeah. 22:33 No, I couldn't agree more and, and I'd... One of the frameworks I'd point people to, to, to think a bit more deeply about this is Kate Vitasek's vested framework. 22:42 I think she's out of the University of Tennessee, if I'm not mistaken. 22:45 And it's, it's very much like, yeah, how do you, how do you think about a pre-RFP to say, "Hey, this particular piece of software and/or other partnership," doesn't have to be software in this particular framework. 22:56 But i- is it, is it worth a partnership? And if so, then how do we craft it from the beginning so that that's where we end up, right? 23:04 And it's, it's scary because, uh, as procurement, we have often got this, this reflex of going back to, like, you know, the cost savings and the traditional measures to, to evaluate success, whereas partnerships is a completely different set of measures. 23:19 So yeah, I, I couldn't agree more. And, and I wanted to point to seven dimensions just to compare and contrast these two, these two different definitions, right? Different positions on the spectrum, 23:29 and just get your thoughts as well if you see any others, Matt. So accountability, right? We... You know, is, are they providing logins or outcomes? What do you want from, from the relationship? 23:39 From a roadmapping standpoint, do you hand off at go live when people have their accounts, or is it co-owned, right? Are you to, to point to what you were saying, 23:48 thinking about how to make this thing evolve and how to make work and, and org structures evolve as well in concert with technology. Point of view, right? 23:57 Is it a feature list or challenges your, your processes and your ways of, of doing work? Transparency. Does it protect... 24:05 Uh, are they protecting a roadmap that's kind of opaque to you, or are they really honest with you about the real capabilities, what's vaporware, what they can and cannot do, and, and, you know, potentially even having discussions about other solutions, other providers, how it fits into the whole together with you? 24:23 Data, right? Lock-in of your data versus it's, it's your data, you can do anywhere, any- anything you want, right? 24:29 We're, we're betting on the fact that you've got a team, a partner accompanying you as, as the thing that's gonna keep you in the relationship versus locking you in physically or, you know, virtually into the relationship. 24:42 Access, right? So do you have to open support tickets that go to some other country and you cross your fingers, or is there someone who can actually change something that you have access to? And then incentives, right? 24:53 Is it just the renewal or is it your success? Is it the outcomes that you're looking for? 24:58 So those are the seven dimensions I wanted to point to as things to think about when you're differentiating between these two types of relationships. I don't know, Matt, if anything else comes into mind. Yeah. 25:08 For me, I think the, the first one that comes to mind is, you know, around commercial models. So we talk about roadmap, but you also have a commercial model as a, as a software company, as a software vendor. 25:21 How does that map into you as a customer in the future as well? 'Cause if, if you're just a stepping stone to get to something else, you become less important to that company. Which brings me onto the next one. 25:33 How important are you to that company? Mm. As a customer, as a customer partner, how important are you? Because, you know, if, if you're 25:44 a very large company and they have lots of customers, yeah, you can still be important or you could be v- particularly innovative, that could be important to them as well. 25:53 But, you know, if a, if a vendor has got five, six, 700 customers out there, where do you fit? How can you impla- impact their roadmap? That kind of thing is, is really critical as well. 26:06 And if, and if, you know, they're in mid-market, they're in enterprise as well, and they cross all of these different industries and, and how important are you actually to them? And 26:17 another thing a partner will do, I think, is say, "Hey, we're not a great fit for this." And this comes to one of your points. "We're not a great fit for this. This is a better option, and we'll integrate with that." 26:28 And I, I think, again, it comes back to your point of how do I build my whole landscape? But yeah. Yeah. 26:33 And it, and it's tough 'cause it requires clarity of, of strategy, which is not always the case in, in software providers as well. 26:41 Like you may, you may be going just to follow, to follow different customer requests to keep the lights on, right? 26:47 So it's, it's like having a, a di- diligent financial evaluation, as you would like in risk management for a key direct material supplier, I think is, is, is critical when you're thinking about, okay, what's, what's our core kind of digital nervous system within the company? 27:03 And those should be partnerships. A- and one of them's gonna be a procure tech partnership, at the very least, if not a couple. So yeah, I, I think those, you know, those are great points. Yeah. Good point. 27:15 I'd just come back to that one a- about particularly, you know, which way are they gonna go. I think Matt Schultz put something out a couple of weeks ago, but saying, you know, 27:24 software vendors are, are becoming the same a lot of the time, and they're following the lead of others. So, you know, one puts this in, they all put that in. 27:32 So how can you help them to influence that and say, "Well, that's not a good idea," 'cause that's where a partnership comes in as well. 27:39 But, but software companies don't always know beyond six to 12 months what they're gonna build. Mm. You know, it's fitting it in. Yeah, and, and then it's to, to your... 27:49 You know, to illustrate, like how can I build a stable of clients that's either, you know, in a niche where I can develop functionality that's worth it because I'm gonna have a, a critical mass, so to speak, whether it's industry-based or geography-based or, or otherwise, to, to have a differentiator, but also to, to build a sustainable business on the software side, and those should all be things that I'm thinking about as a customer of choice, right? 28:12 If I'm a procurement team, I wanna partner with X person to help me develop digital capabilities for procurement in my industry and my geogra- geography, et cetera. 28:22 Like how, how am I aligning those two things so that I ensure my software vendor is successful, but I also have good influence on, on where they're going and, you know, I'm, I'm able to achieve my own business objectives as a procurement team at the same time, right? 28:36 So it's not a, it's not an easy thing to do. 28:38 Like I don't think that's the point we wanna make here, but it is something that requires deep thought and, and strategy and can be something that, you know, is a huge value accelerator if you're looking for partners or to build a partnership instead of just buying software. 28:52 Yeah. Yeah. Uh- And it's not just software either, right? 28:55 It's, you know, if you, if you've got a system integrator coming in to help you with it as well, are they just there to pad their bill or are they there, there to actually deliver value for you? 29:05 Yeah, and, and we could probably have a whole show on like the SI model as well, right? 'Cause you have these other software providers where they go, "Hey, we just do software," right? 29:12 If you wanna get advisory or implementation help, like you need to go through a third-party system integrator, and that's a whole other can of worms, right? 29:21 In terms of like, okay, how do we put those models together to, to ensure that we minimize risk, get value? 29:27 Am I partnering with the, the consulting firm, and does the consulting firm have a lot of weight with the software vendor to help me get what I want and all these other types of questions. 29:35 I think that's a great, that's a great, potentially a great topic for another show. Yeah. Yeah. I'll leave you to that one. 29:40 [laughs] Having said all that, I want to, to nuance things a- as well, and you pointed to this, Matt. 29:47 It's important to know that all software pro- uh, vendors have a finite capacity for partnering with customers as we've defined it on, on the show today. 29:56 They can't partner with all their customers, and they're gonna have a tail. Just as you have a tail of suppliers, they're gonna have a tail of customers. 30:03 So if you want to be strategic, you want to consider the fit as we've been referring to it. 30:08 And a couple signals I wanted to point to, and I'd love your, your reaction, Matt, like if you agree or not, but like one of the things I've been seeing a lot is like this concept of the forward deployed engineer or FDE, which to me is a signal that like if your software provider is assigning you a forward deployed engineer, somebody essentially that's coming to sit with you, learn your business, and then help develop the solution and, and feed it back into the main solution, but so that it meets your requirements and they're challenging you as well to ensure they're not building something really custom that's not gonna be able to, to, to be best practice, that to me is like a good signal that you're, you're partnering. 30:46 ... amongst many others because it's not scalable. 30:49 And that's the point I wanna make is, like, is the vendor providing you services and/or advisory work and/or, you know, effort that's not scalable really as much as software? 30:58 Those are good signals to me that, that, you know, you're, you're probably more in a partnership than you think. So what do you think, Matt? No, I... Yeah, I agree. 31:06 I, I think, you know, larger companies will have that specific role for sure. Smaller companies will have you engage directly with their product team during the whole duration of that 31:17 decision-making as well, and going into the implementation phase of it. So I... 31:23 Yeah, I think it, I think it's, it's just that the software company must have skin in the game as well and must have somebody e- engaged to bring your thoughts forward, but also crystallize those thoughts. 31:37 We can't expect as, as software vendors, you can't expect customers to know the answer, but they do have the questions, they do have the challenges. 31:47 So bringing those challenges to a solution is, is a partnership with the technical side being owned by the vendor, hopefully. Hmm. And a partner. No, I love that. [laughs] I love that. Actually, I, I... 31:59 The heuristic that I wanted to leave people with draws on that, which is, like, if you don't have the opportunities to ask questions, you're just buying software, right? You're not... 32:07 You know, if you don't have that discussion, that, that way to get to a solution for your specific organization's problems, then you're probably just buying software. And I think you, you... 32:17 We had discussed offline a point that you made, which I thought was great as well, which is like we've, we've been focusing on what procurement can do and can ask and can check to, to see if they're working with a partner, but there's also this two-way street principle as well, right? 32:30 Like, of, of acting like a partner on your end as well, right? It's not a one-way partnership. So I don't know if you wanted to, to add anything on that note. Y- yeah, for me, that's critical. It... 32:42 And it, it comes back to my point of, you know, talking about the different things within the contract. Yes, you have to have a contract, sure. 32:50 You have to have clauses in there to, to allow you to end that partnership if, you know, you... Sometimes you need to divorce. But honestly, you, 33:00 you need to go into it with a, with an open mind and an open ability to change the flow as you go in a true partnership way. 33:09 You know, the, the way that you interact with people over time will change, and you need to think of that as well during the, the contract negotiation. Don't try and nail it down so hard that it's totally inflexible. 33:21 Don't e- not even on the s- scope of work or the statement of work. You need to have flexibility within there as well. That's a good- You know, both companies also need to make money. Yep. 33:32 Yeah, it needs to be- Have that money... a successful partnership for both, of course. Yeah. Yeah. Yeah. Don't try and, and get everything for nothing. 33:39 Otherwise, the data you put into the software [laughs] provider- Could end up-... might, might end up in Google. [laughs] In Google's dumpster. That's right. That's right. 33:48 [laughs] And I think, I think this is a great way to, to end the Deep Dive and a good time to segue to the elephant in the room, which is, you know, as I mentioned at the top of the show and we've been alluding to, is that you're, you're unfortunately leaving your Deep Dive co-host spot on the show. 34:03 I've really appreciated having these discussions with you, Matt, and I feel like we were... You know, the last couple of shows we've been... We've had a good dynamic, so I'm, I'm sad to see you go. 34:10 I know having spoken to you offline, it's, it's a bittersweet moment for you as well. 34:15 So I, I wanted to give you the opportunity just to share the why behind the decision and give you the opportunity to highlight why we close with, with... or we chose this topic to close your last show. Yeah. Yeah. 34:28 Well, thank you. It is bittersweet. You know, I've made a decision to move on from, from Focal Point. So I've been working with Anders at, at Focal Point now for 34:37 a couple of years, nearly, you know, two and a half years, and it's been a great time. But I've decided to move out of the software area. 34:45 And actually, I'm gonna be starting with a company called Vodafone, which p- everybody in Europe knows, but, uh, a lot of people in, in the US and Canada don't know so much. 34:55 And I'm starting up a new part of the business for, for the Americas, which is around procurement services. So I'm staying in the procurement space. 35:04 What, what Vodafone does is it, it actually offers procurement services to other companies to enable them to buy better, et cetera. So that's where I'm gonna be. 35:14 I'm super excited to start, and I have started already, and looking forward to the, to the next steps and, and keeping in touch for sure. I'm happy to come back as a guest host whenever you want me to. 35:26 But yeah, I'd, I'd like to hand over to, to Anders, who remains a, a friend and is my ex-boss now. But, you know, I just wanna, wanna really thank you for the time, the experience of doing this podcast. I've enjoyed it. 35:42 The last couple I've really, really enjoyed. The first couple I was really, really nervous. Now I'm just slightly nervous, but it's been, it's been fun. And this topic is huge of, you know, around vendor or partner. 35:55 I think it's, it's so massive and, and like I say, it bleeds into every area. 35:59 You need to define value, and that's what I'm gonna be doing with Vodafone as well is, is helping customers to achieve value and as a partner as, as much as I possibly can. 36:10 Yeah, and I feel like it's, it's also what you've been doing, you know, your entire career, which is one of the reasons I wanted to, to partner with you on this, uh, on this show and the conversation because I think it bleeds through all the organizations that you've, you've been involved in, right? 36:23 And so, good. Well, let, let's bring in, uh, our new co-host then, shall we? Let's see what he looks like. [laughs] Or he is... Or sounds like. Oh, there he is. Hey, Anders. How are you? Living the dream, guys. 36:35 Living the dream. Thanks for having me on. Yeah, of course. 36:38 So Anders, for, for folks who don't know who are listening to the show, is the, the chief executive officer at Focal Point, and so he had, you know, delegated Matt on the show, but now, uh-Uh, the buck stops with him, right? 36:48 So he's back, back with us. But I've-- having spoken to Anders many a time, uh, offline, uh, I appreciate his, his perspective, uh, and I know he'll keep me honest as we go through the, uh, the conversations here. 37:01 Uh, Anders, would you give us just a, a quick intro, uh, on, on your background? I know you have a unique one in, in the ProcureTech space as far as I'm concerned. Yeah. 37:10 So unlike most ProcureTech CEOs, I actually spent twenty-five years in procurement. 37:15 So I've been a chief procurement officer for a few organizations that you may or may not know, like Fannie Mae, QBE, Webster Bank, Citizens Bank. So I've been around the block a few times. 37:25 So talking about what you guys talked about today, about partnerships, like, I've seen both sides of that, not just as a CEO, but also as a procurement guy trying to make partnerships work, which is kind of fun, right? 37:37 Yeah, absolutely. And, and on that note, I'd love your take, right? As the CEO of a software provider who has this background, what's your take on our discussion? I know you were listening in the background. 37:47 Is there anything that, that, you know, any hooks that you wanna grab onto? Well, I think, you know, it's like I tell my four-year-old, right? 37:54 You have to be a friend to get a friend, and a partnership is, is not really a one-way discussion. 38:00 So I think while a lot of companies say they want a partnership, they don't necessarily act as though they want a partnership. 38:06 They want a transactional relationship with the benefits of, you know, unlimited access to resources at the, at the, at, at their suppliers, right? And that's not always how it works. 38:17 And it-- as a former practitioner, it was always interesting to me to see these very critical functions were relying on suppliers, and if something went wrong, they, they had to reach out to the CEO of the company for the first time. 38:32 Like, they weren't on a first-name basis with any of the executives, and you realize it was a partnership in name only. Hmm. 38:38 And I think, you know, you have to build those real partnerships by really collaborating good, bad, and ugly, and I think that is not often what people think about it. So I think Matthew said it the best. Like, 38:50 you know, y-you have to sort of put the work into it on both sides. It c- can't be a, it can't be a partnership, uh, for the supplier only. It has to be both ways. Yeah. 38:59 And when, and when I hear you describing that, my mind goes to, like, you know, in ma-manufacturing days where if the machine goes down, like, you know, if, if the supplier-- you just went to the supplier with the cheapest cost of parts, with no after-sale service, with no, you know, n-no benefits as you, as you said, right? 39:17 Like, that's when you realize the value of a partnership. 39:20 And so it's, it's up to procurement as well to like, okay, how do we get out of this cost savings and these traditional measures and, and give more value in our evaluations and in how we structure contracts to these more intangible or... 39:33 They are tangible, just, like, outside the scope of our, our traditional reflexes to get to, to those partnerships in practice and not just in name. Yeah. To give you sort of an anecdote, right? 39:43 So I, I remember early on in my procurement career, we outsourced cash handling a-at a very large bank in Canada, 39:50 and we basically negotiated really, really hard as part of that RFP, and we got the best deal ever, and we were sure of it. 39:57 And it-- the deal was so good, in fact, that nine months into the deal, the provider came to us and said, "We're losing so much money on this deal-" Hmm. "...like we have to terminate it." And 40:07 it was one of those things you have to stand back and say, well, lowest cost is not always the best cost because switching back to another provider, like, so you're forced to the table of saying n-now you have to actually sit down and build a partnership, you know, brick by brick while you're in it. 40:22 And it's, it's unintended consequences of having a really good procurement process. Um- Yeah. It's almost too good. [laughs] Right. Very cool. That's right. Yeah. A very good way to end, I think, this, this episode. 40:34 And so Matt, you know, wanted to thank you. I think we've, we've got this show in good hands with, with Anders now as well. Mm-hmm. 40:41 The deep dives and so just, yeah, a big, a big thank you to you both for, for continuing the, the journey and, you know, partnering on this show, so to speak, right? 40:49 And, and going through the transitions and the milestones and the, and the, the bumps along the road. 40:54 So I think I'll, I'll leave it there in terms of, of how we make the parallel between today's topic and, and the show here. So if you've been listening, thank you very much for, for tuning in. 41:04 Follow us wherever you see the podcast. We're still gonna go on a weekly basis, and we'll have Anders here once a month to help us on this deep dive format. 41:12 And we'll see you again soon, and wish you best of luck in the next steps, Matt. Thank you, Matthew. I appreciate it. Thank you so much. [upbeat music] That's a wrap on this episode of ProcureTech Unpacked. 41:22 If this one resonated, subscribe wherever you get your podcasts and sign up for the ProcureTech newsletter for weekly insights between episodes. 41:30 If something we covered sparked a question or an idea, we'd love to hear from you. All the links for the reports we discussed are in the show notes. We'll see you next time. [upbeat music] Resonate.
