All Hype and No Idea: Is this where Procurement Tech is heading?

Probably not, but we're seeing plenty of it

Last week, I had the privilege of participating in the Digital Procurement World (DPW) conference, a pivotal event in the procurement industry. DPW serves as a global platform that unites tech vendors, startups, and procurement professionals, fostering the exchange of cutting-edge innovations and insightful ideas. For those deeply entrenched in the procurement landscape, DPW is not merely an opportunity to witness the latest tech trends, but a crucial juncture to assess the industry's trajectory and, more significantly, to steer it towards a promising future.

DPW 2024

My journey at DPW always commences with a stroll through the exhibition floor, and this year was no exception. The sheer number of vendors, approximately 120, was the first thing that caught my eye. Among them, several promising startups stood out, underscoring the continuous evolution of the procurement ecosystem. I’ve always championed the role of fresh, innovative technology in propelling the procurement space forward. Without it, the industry risks stagnation, perpetually fixated on cost-cutting through RFx processes and driving vendors towards the bottom rather than nurturing genuine value creation.

Many of the solutions I encountered this year were nothing short of impressive. There’s a clear trend towards more sophisticated, data-driven tools that can help organisations streamline operations and transform how they approach procurement. These tools are vital in helping companies better manage supply chain risks, which is more important than ever given the fragility we’ve seen in global supply chains over the last few years. Having these technologies at our disposal means we can be more proactive in navigating disruptions rather than constantly operating in reactive mode. I left feeling optimistic about the direction many of these companies are taking and excited about the potential for significant transformation in procurement.

However, I couldn’t shake a feeling of slight underwhelming in certain areas, particularly when it came to some startups that seemed to be tackling problems already being addressed or had lost their relevance. For example, many vendors were focused on data extraction solutions—developing proprietary models designed specifically for procurement or finance use cases. The rise of open AI platforms like GPT and other large language models made building new, proprietary models redundant. These generalised tools can handle many data extraction needs efficiently, making me question the return on investment (ROI) for companies that choose to develop and invest in these niche solutions. There’s immense value in aligning technology development with actual market needs; in some cases, I felt a disconnect.

Still, for every underwhelming solution, there were several that genuinely impressed me. I was encouraged to see many vendors focusing on critical areas like vendor relationship management, risk mitigation, and performance analytics. These are the kinds of solutions we desperately need in procurement, and it's reassuring to see that some companies are not only aware of these needs but are developing innovative ways to address them.

During the event, I had several conversations that reminded me of just how much foundational work still needs to be done in procurement. Despite all the new tech innovations, many organisations still struggle with basic but essential tasks, such as gaining visibility into their contracts or managing vendor relationships. These discussions highlighted how much of a gap still exists between aspiration and reality in procurement. Even the most advanced tech solutions won't deliver results if companies don't first have a strong foundation in place. Managing vendors through spreadsheets and email chains is a recipe for inefficiency, yet it's still the norm for many. For me, this reaffirmed that before diving into cutting-edge tech, organisations need to first get the basics right.

Another interesting theme that emerged from my conversations was the growing frustration with the cost of traditional procurement systems, like Ariba and Coupa. Many attendees voiced concerns about spending seven figures on these systems only to see minimal return on their investment. What's exciting, however, is that newer, more flexible solutions are entering the market that offer the same or better functionality at a fraction of the cost. Several vendors at DPW showcased scalable solutions that could be integrated into a company’s existing tech stack for a much more reasonable price—sometimes as low as $10,000 to $300,000 annually. The potential for these newer systems to disrupt the market is significant, and it's a development I'll be keeping a close eye on.

For me, one of the best parts of DPW is the chance to reconnect with the community. Beyond the technology, it’s the people who make this event special. There’s an energy at DPW that comes from being surrounded by others who are just as passionate about pushing procurement forward. Whether it was catching up with old friends or meeting new colleagues over a cold beer, the networking and sense of camaraderie were a highlight. Special shout-out to Karthik, who once again showed his generosity—your thoughtful gift was much appreciated! DPW is unique in fostering open dialogue and creating an inclusive space for everyone, regardless of where they work or their background. It's the kind of community-driven event that keeps me returning year after year. I particularly enjoyed a cold beer with the Gatekeeper team, our customers, and the wider Procurement Community.

In closing, while DPW 2024 had its mix of highs and lows, the event left me feeling energised and hopeful about the future of procurement. There’s no denying that we’re on the cusp of major change in how organisations approach procurement, and many of the solutions I saw this year are paving the way for that transformation. As we continue to address foundational issues and emerging challenges, I look forward to seeing where these innovations take us. DPW remains a must-attend event for anyone serious about staying at the forefront of procurement. I’m already looking forward to next year’s conference and the new wave of innovations it will bring.