Spend Advantage Podcast

AI Intelligent Intake Management For Procurement

January 09, 2023 Varisource Season 1 Episode 20
Spend Advantage Podcast
AI Intelligent Intake Management For Procurement
Show Notes Transcript

Welcome to The Did You Know Podcast by Varisource, where we interview founders, executives and experts at amazing technology companies that can help your business save a lot of time, money and grow faster. Especially bring awareness to smarter, better, faster solutions that can transform your business and give you a competitive advantage----https://www.varisource.com

Welcome to the Did You Know Podcast by Varisource where we interview founders and executives at amazing technology companies that can help your business save time and money and grow. Especially bring awareness to smarter, better, faster solutions that can transform your business. 1.5s Hello, everyone. This is Victor with Varisource. Welcome to another episode of the Digital podcast. Today I'm super excited to have Leahy, who is the CEO and founder of Opstream, as our guest. Lihi is also actually Opstream is not just a guest on this podcast, but they're also a great partner solution that we're going to be announcing coming in 2023. So super excited but quick intro of Upstream. They are an AI intelligent based intake management platform for procurement teams. Welcome to the show. 

U2

Thanks for having me, Victor. Very excited to be here and for our partnership. 

U1

Yeah, super exciting. I think we're going to be helping a lot of procurement teams in 2023, so super excited, but yeah, you have an amazing background and again, we always love to hear these founder stories as we called him. So maybe you can give the audience got a little background about yourself and really why and where's the AHA moment for you to create Upstream? 

U2

Yeah, of course. So I'm originally from Israel. In the last ten years or so, I live in the New York area that I am very versed in the Israeli tech industry and I spent my career in both startups and large organizations, both in Israel and in New York. My longest journey was at Taboola. Taboola is now the largest content marketing network in the world. But I joined Taboola when we were 15 people. I joined Taboola back then as VP Professional Services. Then I was VP Professional Services and Operations. And as the company grew over the seven years that I spent there, I was the one basically buying everything, all the SAS, tools, everything that we needed in order to grow as fast as we grew. And while being with the company again from 15 people to 1500 people globally, I saw how hard it is to buy and I've noticed that the industry keeps providing solutions for companies to make the sales process easier and faster and streamline. But I came to realize that you cannot really help the industry to sell better and faster if you don't help the buyers buy faster and in a better way. So when I started to think about starting my own company, I started to speak with a lot of companies out there and I realized that it wasn't a tabula unique problem. Everyone in the industry has a real issue buying and speaking with I spoke with over 400 companies before starting Upstream, realizing that there are so many mutual problems across different industries. Just people need help with their process to buy. And that's where we come from, trying to help companies streamline their process and do it in a very intelligent and technical way. Based solution. 

U1

Yeah, I can't wait to hear more and talk more about that. And I think why we partner together so well as we both share that vision and we're solving the problem in very complementary ways, yet kind of different ways, I think, when it comes to obviously we talk about technology buying a lot, and 1.3s there's not a lack of solutions in the market. Every single day there's new solutions, cheaper, better, faster solutions out there. But we believe the buying process is broken, the way people buy things is broken. And so we're super excited for you to come to that AHA moment and create this company. So the first topic we want to talk about is procurement transformation. I mean, the last two to three years, I think COVID has definitely accelerated these transformations. But procurement has always been an important role in the company. But I think the last two, three years, it has become even more critical, because during COVID people have to think about finding solutions now, finding solutions that are remote, completely changing the way companies work, right? And then now with the economy, procurement is tasked to find cheaper, better solutions to reduce costs and optimize spend. So procurement is becoming more important. So there's a whole transformation in procurement. What have you seen with clients? Or why do you think these transformations are happening now from a technology and department perspective? 

U2

So I 100% agree with you. I think that COVID accelerated that. But it's not just COVID. As a matter of fact, 1.3s I think that there are a few reasons to that. First of all, I think that the world became more and more regulated. 1.1s The global village made sure that we basically all follow or try to follow very similar 1.5s guidelines, regulations. And whenever new such requirement comes, procurement people around the world do not necessarily know how to follow. The current example, mainly in 2023, is going to be ESG and carbon footprint and changing. Now, how procurement work across different industries to verify ESG is super hard, and those type of regulations comes very frequent now. So it requires technology to basically 1.1s make sure that they embed those new regulations in their flows. The second thing that happened is that between remote work during COVID and just the expansion of technology, we now have software for everything, what is called the SAS pro. Basically every company has a lot of tools in the company. There are more than 85,000 software solutions in the world today. And if five years ago and ten years ago, someone could be an expert in their field and know what are the best solutions out there, who are the best vendors for everything, now it's almost impossible. 85,000 today, 200,000 in two years to come. No human being can actually know what are the best solutions, and companies need help sourcing that. And the third thing I want to mention is the fact that everyone became a decision maker with the fact that again, remote work, virtual credit cards, the ability to purchase very easily, sometimes free of charge or very cheap because that's how companies start, vendors start to pitch their products to companies. It means that it's no longer a centralized process where you have 1.3s the stakeholders deciding everything and just purchasing. You have a marketing manager buying, you have an HR manager buying, you have lots of people in the company, even junior ones buying. And that's a problem that we didn't used to have. And that's new for procurement people. And I think that this with the shortage of supply chain in coffee, created the flow that we see today. 1.4s

U1

Yeah, those three gold nuggets. I hope and wish every procurement people hear it and I think they feel that pain. Software has changed the world for maybe the better, making things more efficient, cheaper, faster, easier, all those things. But it also created when you have a lot of something, right, cars, houses, you need a platform technology, like you said, to aggregate it and create a better buying experience, right? 1.1s Yeah, absolutely. I think that's going to be a huge challenge and I think it's also a security challenge. Have you kind of hear that as well? Because I think one of your value more than just the intake is also security. Because when you have everybody becoming a decision maker, buying software, again, not just an intake problem, but kind of a security challenge because now it doesn't know what users, software they're buying, what they're connecting to the company's database, and just lack of visibility and again, creating a lot of security challenges. So what's your thought on that fee? 

U2

Yes, so you are totally correct here as well. As a matter of fact, we call it the threshold track because. 1.2s If you look, traditionally, what happens is that whenever 1.8s there are too many purchases, finance and high level executives tell procurement, okay, so don't review everything. 1.3s Pick up a threshold, and don't review anything below a certain amount, let's say ten K, okay? And below that, let people do whatever they want. But as a matter of fact, that's a trap because of the security issue, because of the fact that today, as a matter of fact, 1.4s the more expensive a software is, the chances that that software has a security bridge is smaller. The It people should probably invest less time making sure that salesforce is 1.2s a good It solution than any other tool. And that's why I believe that an intake management is really needed, partially because those high level executives and finance people, they're right. Finance might not need to review everything, but you want to have a smart intake in place so that you will ask the right questions and know which stakeholder need to be involved in which part of the intake. So if you buy a premium, you don't pay anything, but it touches your data legally need to be involved to verify the contract, and compliance need to be involved to verify GDPR, and It need to be involved to verify that there is no data leak because your data needs to be protected. And that's exactly why you need smart intake. 3.2s

U1

Yeah, that's actually a great way to look at that and point that out. Lee so the next topic we want to talk about was obviously on the technology side. So this intake management solution, it makes so much sense when you hear it's like, hey, don't you want a better product? You need a process for 1.5s obviously when you're buying anything thing to prevent these loopholes and data leaks and all of these things that you just talked about. And one of the companies that a lot of people are aware of called Zip, they started only about three years ago, but they've really taken kind of this they created this category, but obviously, being that first mover, they also are overcharging companies for that solution because there was not a lot of other options options. Why do you think there was a gap that all of these procurement technology companies didn't look into that Zip did. From the intake solution perspective. 1.2s And how do you think you hope to differentiate from it? Yeah, Zip is a great company and I think that. 1.4s They indeed were first to market. I think that traditionally, most of the procurement software out there, the big names that we are all familiar with, they traditionally just looked at procurement as a stakeholder. And the difference between those systems and pure intake management system is putting the end user 2.6s in the front and making sure that the end user has value from that. And zip did a great job with that. But I think that zip continues to look at the procurement space in a more traditional way, looking at source to pay, focusing on what 2.1s traditional software for procurement are focusing on. What I believe is a gap is the fact that, yes, intake is super important, and that's exactly what we bring to market. But we do that while we keep in mind that sourcing is a real pain for everyone, and sourcing requires a lot of AI and intelligence in order to source smartly. As I said earlier, 85,000 software in the world today, no one can source that without very smart technology, very smart AI. And our differentiator is that we bring those intelligence into the market. As a matter of fact, our platform is built on top of that database of all the software in the world, all the 85,000 that I mentioned, and we have a lot of information about those software. So when our customers use our platform in order to run through an intake, we know to ask smart questions that are not necessarily defined by the stakeholders, but by our understanding of what they buy, of the context. I'll give an example. 2.3s A lot of the companies today, they speak the fact that they have duplicate tools that their people in the company purchased both asana and Trello and Jira and Monday, and a lot of those duplicate tools. But the problem is that if you find it after they purchase. 1.3s You can't really make a difference. 

U2

And what our software does is the fact that when you try to buy Trello and we already know that you have a sauna in the company, it's not just a name for us. We know what Trello does for companies, we know what Asana does, we know what are the main features, we know there are competitors, we know there is G score, we know a lot of information about them. We know who the vendors are. So we know that Trello is Atlassian and that might have an impact for you. So we know all of that. And we can ask follow up questions based on the fact that we have this intelligent plus. We know what are the main features that are in use for each of those tools and we can now estimate if this is the right tool for you or not. So we are not just intake. We are intake with very smart AI intelligence based source. 3.5s

U1

Yeah. And that's going to be even more needed, I think, for companies come 2023, right. Because all of those visibility or lack thereof, and controls and processes leads to overspending, leads to security loophole, leads to a lot of challenges, and auto renews from suppliers. And so, yeah, amazing kind of technology you guys built. So one of the last topics that I want to talk about is you've been on the practitioner side, you've been on the customer side, the practitioner, and now creating this technology to solve this problem. I think you're a great person to kind of give us some insights into this, but give us a couple of examples. Walk us through the pain and issues that without an intake solution like yours, obviously you've talked to a lot of customers. How are they doing things today, 1.6s and 1.1s what are some of the issues that how they're currently doing it causes? Yeah. 

U2

So 1.2s that's a topic I really like because when I was VP Professional Services at Tabula, 1.1s as I mentioned, I had this pain. I actually hired someone to report to me with the title of Professional Services Ops, basically helping me to create the processes to purchase, to verify whatever we do. And I actually saw that I was unique. I saw that I made it up, but then I realized that it's not me. I'm totally not unique. The entire market started to basically hire Ops. And if you look at it, not just in procurement, in a lot of those departments, people are hiring ups in the last five years or so to make sure that each department has their Ops person basically helping them to buy. But. 1.4s The new trend that I see is that procurement cannot do it. Also, procurement started to hire procurement ops. We actually call it the rise of ops because that's what we see. They throw people at the problem, they can't handle it anymore, and they just throw more and more people. They give you different titles, they make up those new roles instead of understanding that it's impossible to do it by just throwing people at the problem. 1.6s Of course, that's very expensive. People at the problem, it's always the expensive way. So that's one thing that companies are doing. The other is what I mentioned earlier, the threshold trap, just not looking the other way when it's a cheaper product. Back in the days, we called it the shadow, it now it becomes the shadow. Procurement people also do that with freelancers, with service providers, with partnership. It's not only with software today. That's why we start to see that across the board. So that's the second thing that they are doing. And the third thing that companies are doing is basically trying to say, okay, let's stop buying. We'll control all spend, let's stop doing that. But then reality is that their people continue to buy without and just overlook the regulations or the guidelines from the company. 1.5s I'll give one example for that. 1.1s A customer of ours that basically the procurement person had a great deal for office supply, and they had a vendor for office supply. They got 20% discount for an office supply, everything that they purchased through that vendor. But the problem is that they didn't have an intake management solution. So the end users just ignored that and went onto their preferred online vendor and purchased everything and got it the day after instead of using the 20% discount. And the company just lost 20% of all their office supply just because they didn't have any way to make sure that the end user actually uses what the procurement person signed. And that's why companies need solutions that. 3.3s

U1

That is such a simple, yet great example. And imagine people doing that hundreds, thousands of times across different services, and it happens because there's way too many services and lack of visibility. And this is actually a very I have a very unique question for you that I think every procurement person would want to get your thoughts on. 1.4s Obviously, procurement and stakeholders, oftentimes there are friction because stakeholders may feel like procurement is trying to control what they spend, and obviously, procurement is doing that 1.3s for the business, for the company. And so everybody wants to do the right thing, but sometimes just the way things operate today in companies can create some friction. Right. And I kind of see your platform, Lee, as it's sort of a bridge 1.2s between the stakeholders and 1s the procurement. Do you see that 1.4s as kind of a good right assessment? And how does that actually happen? How can a procurement director use your platform to help become that bridge to incentivize or enable the stakeholders to really cooperate more with procurement? 

U2

Yeah. 2.1s Just to explain how much I agree with you, 2.9s the first employee we hired when we started upstream, the first one, before even the first engineer was our product designer. We believe, we strongly believe, that our UX is the secret sauce. If the end user user does not feel that this is very seamless, very easy to use, self explanatory, no training is needed, they will not use that. It should be as simple as going online to their favorite vendor that they are used to buy from. So first of all, UX is what we are focusing on. That's the first one. But going back to your very smart word of using the word bridge here, I think that this is exactly what procurement people want to be. They want to be that bridge. And in order to do that, they need to create visibility across the organization so that a marketing manager that submits a request will not feel that they just threw it out there and 1.2s he has no idea what's the status, where does it sit, when will they get an answer? Why do they need all those questions? What our platform enables is a to have small tool tips so that this marketing manager in the example will feel that there is a real reason here. They'll feel that they're being asked only the relevant questions and all the questions from the get go, so no time wasted here. And B, they'll have a full visibility where everything is. They will know that Lisa from legal and that John from procurement and that Steve from It are working on it now, and that they'll come back to them in two days time. They will know who to reach. They will see their comments, they will know where things stand. And that creates value to the end user, not just to the stakeholder and to the procurement people. 4s

U1

Yeah, that's such a great topic. We could probably have another session just on that alone, and I think that's also going to be one of the key reasons I think procurement team should work with Airasource and opstream together. I think that's going to be our goal in 2023. Lee but as we wrap up the session here, you've given us so many gold nuggets here, but the last question we always like to ask our guest is, obviously you've seen a lot, done a lot. 1s Any personal or business if you could give one personal or business advice that you're really passionate about, what do you think that would be? 4.5s

U2

I don't know when we'll publish this yet, but we are now at the end of the year and coming up to the holidays. And I think that for us founders and for us CEOs and high level executives, it's really hard to remember that this journey must be part of our lives and not just our business. And the end of the year is a great time to remember that we also need some time to have fun and to make sure that the journey is not just focused on how do we get the next customer, how do we get a better contract. It's about making those relationship. It's about taking time for ourselves and having fun with our family and friends. And I know that you asked for business advice, but I strongly feel that we are now in a world that business and pleasure and personal life are all intermingled. And we need to remember that we should enjoy the ride and not just look back after we have the result in our hand. 3.8s

U1

No, that's such a great advice. I love it. I think, obviously, when people are building companies, they are so focused on it, but at the same time, that journey and also who you do it with, and that's why I really appreciate our partners like yourself, we're learning from you. We're partnering together. We're creating more value for people, for customers out there. That's ultimately, I think, why founders want to start business is to bring more value, 1s you know, to the world. Right. So I think, yeah, we really appreciate kind of having you on that journey with us. So I really appreciate your time today. Yeah, 

U2

thanks for having me. It was really fun. And I'm sure our partnership in 2023 is going to really change the world of procurement. 1.3s

U1

That was an amazing episode of the digital podcast with Varisource. Hope you enjoyed it and got some great insights from it. Make sure you follow us on social media for the next episode. And if you want to get the best deals from the guests today, make sure to send us a message at sales@varisource.com.