EP 13: Making Sense of the Procuretech Landscape: Practical Insights for CPOs W/ Samir Khushalani

0:15Today on the show, I'm delighted to be joined by Samir Khushalani. Samir is a former global digital procurement and operating model service line leader at McKinsey and Company. and in that capacity we had the opportunity to collaborate with him on the 2025-26 ProcureTech 100. Now we're really proud that Samir has joined Art of Procurement as a senior advisor to us and we thought we'd bring Samir on the show, have a chat about all things digital procurement but also the ProcureTech 100. So Samir, thanks for joining me. I'm excited to be here. Now I'll start off with a question that I always ask at the beginning of my interviews.

0:49Did you find procurement or did procurement find you? Oh, procurement found me, most definitely. Back when I graduated, universities didn't even offer an undergrad degree in supply chain and procurement. I got a degree in engineering, joined consulting, and got staff on a procurement project, frankly, more because I was available and there was a staffing need. So it was really well fortuitous. But 30 years later, I'm still here and I'm having a great time. That's the way it worked for most of us was, you know, find ourselves here and never leave. Once it sucks you in, there's no turning back. Now, procurement technology has been a big part of your career and helping organizations, you know, look at their tech stacks, looking at their operating models with the context of what their tech stack means.

1:40I wonder if you could talk a little bit about your relationship with procurement technology over the course of your career? Yeah, you know, I would say it's been continuous and consistent. I think from the very beginning, I realized that technology could be a key enabler and a driver of efficiency and effectiveness. And I don't think that has changed. But what has changed rather dramatically is the technology itself. So at least in the course of my career, 30 plus years, I've lived through what I would say are three generations of digital technology. There was the ERP era that digitized transactions.

2:23And these are on-prem applications. Procurement was just one module within the ERP suite. And if I might say so, a rather clunky module at best, right? Then you have the SaaS era, and that really focused on improving usability and workflows. And these were purpose-built procurement apps, right? For procurement, by procurement, off procurement, if you will, at both point solutions and source-based suites. And now we have the AI era, and this is agentic apps offering the promise of autonomous execution. But I think for the very first time, it's not just about technology helping people do the work, it's actually doing the work for the people and that's what makes it so exciting and energizing frankly so yeah i guess i'm dating myself but that's kind of been my my uh my relationship and technology in particular and as you look over the 30 years i'm sure you know sometimes you think there's a lot of change but a lot of things stay the same you know are the foundational principles let's say, of how you think about technology and the interplay of technology and operating models and things like that?

3:36Are they the same as they were, you know, 30 years ago when we talked about ERPs? Or are we kind of on a new horizon when it comes to how everything kind of connects with each other and the way that we should be thinking about the way that it all connects with each other? I think at its fundamental core, that has not changed. Because from the very beginning, you know, technology was an enabler, right? And so tech for the sake of tech was a mistake a lot of people made, but it wasn't something that was a recipe for success. You had to always think about people. In fact, I often said people first, technology second, right?

4:17Right. So you have to always think about the operating model, impact on roles, impact on skills, etc. So I would say that at its very core is has not changed. And for true transformative impact, you have to look at people, process, tech, governance, capabilities and so on. I do want to emphasize, though, that unlike the first two generations that that I alluded to just now, this time it is very different and so when you now have people moving from doing to directing managing agentic workforces and a hybrid workforce it requires a whole different skill set so again it's an operating model problem but it just is a different level of complexity shall we say when you look at today what are some of the key markers of the landscape the procure tech landscape when you look at all the different providers in the marketplace?

5:16Yeah, that's a great question. And it's something that's changing literally as we speak. I mean, that is how dynamic everything is. But if I were to kind of synthesize it, I think there are four things that are happening simultaneously. One, the innovation is real. This is not FAPAware, right? Startups are attacking every corner of procurement from category strategy all the way to paying suppliers. They're providing real-time insights. They're generating category strategies, automating transactions, enforcing compliance, and so on. That is happening today, so that is real. The second is the market is fragmented and crowded.

6:00The barrier to entry does seem low. There's a lot of private money going around. People, a lot of founders, a lot of startups. In fact, there's an article in the Wall Street Journal today how students are wanting to abandon consulting careers and finance careers. They'd rather become a founder to a startup, right? And though collectively startups are addressing every corner of the market, individually, for the most part, they're just focused on a couple of elements. So that's the fragmentation that I'm alluding to. I think the third thing is startups have a messaging problem. So while innovation is accelerating, the differentiation is becoming harder.

6:42Everyone claims to be agentic. Everyone's talking about or promises autonomous procurement. The language is converging faster than the products are. And so the signal to noise ratio, if you were a procurement practitioner, it's getting worse. And then lastly, I would say that today, every company, every software company is an AI company. It reminds me of the dot-com era of the 2000s, right? But the reality is that they're not all the same. Some are adding AI frosting to their existing products. There are others that, and what I mean by that is like a chat GPT wrapper around what they have, right?

7:23There are others that are retrofitting AI to their mature platforms. And then there's a smaller group that is truly AI native. These are companies that started after 2020, frankly. These are very different companies. And as a buyer, as a practitioner, they need to also evaluate them differently. So I think those are the four things that I'm kind of seeing happening today. If I just look ahead, maybe over the next 12 to 18 months, I do see some meaningful consolidation occurring. But I also don't see a winner takes all, Phil. I think that scenario is unlikely to happen. The agentic procurement function of the future is, at least in my mind, it will rely on a multi-vendor ecosystem.

8:08Yeah. What do you think is driving that, that it's likely not to be a winner takes all? Because as you say, there is an explosion of technology companies supporting procurement with procurement use cases, but that there may be room for at least a lot of them. While it's crowded, we're not going to see that go to one or two just buying up everybody and everybody else kind of falling by the wayside, that there does exist in marketplace for a large number of providers. Why do you think that is? I think it's the base of innovation. I mean, literally, these large language models are changing, not every six months or every year, like literally every couple of months.

8:53And so the innovation is so dispersed, and it is so rapid, that to expect any one company or any two or three companies to be able to be the custodians of innovation is highly unlikely. And the power of these models and what they are allowing people to do, you know, and how quickly they're able to do it is going to cause or result in innovation being far more dispersed. It's interesting what you said about a lot of the companies right now look the same. And that's what I hear. You know, I hear when people go and they may go to an event and see a lot of companies and it's really hard for them to distinguish between one company and another.

9:33on the the the other side of it you have convergence this is something we talked in the prokaryotech 100 last year when we we partnered on it is this convergence of uh you know traditional a traditional taxonomy where you could easily fit a provider in one bucket versus the other bucket now you're finding that they're sitting across multiple different ways so how any advice you might give to anyone listen listening who's a practitioner who's trying to make sense of this market? Like how can they start to think about understanding more about what the options are as opposed to being a little bit, you know, paralyzed by all the choices?

10:12Yeah, that's actually something we are seeing as well. Sometimes folks are getting paralyzed, overwhelmed is a word I hear all the time. And they're often getting paralyzed into inaction. I was talking to a CPO the other day who had identified a few specific partners, AI tech partners that they were seriously looking at. And then they went to one of the conferences on digital procurement. And they came back with saying that they needed to analyze the rest of the market as well. And I'm like, yeah, six months from now, you'll still be analyzing. So make sure you avoid that analysis paralysis because you're just dealing impact.

10:53And so I think one of the things that I would, one advice I would give practitioners as they evaluate the tech options is, one, we are in the very early innings of this, what I would call transformative technology, right? And with that comes uncertainty. Embrace that uncertainty. Don't run from it. Don't try to make perfect the enemy of good either, right? The biggest risk today that they can take is not making the wrong AI decision. It is making no decision at all while everyone else is learning. So just jump into the pool, maybe not the deep end of the pool, but at least the shallow end of the pool.

11:32And the right posture, I think, for CPOs is to make deliberate bets, right? Partner with a small number of tech players, learn faster than your peers, avoid lock-in, at least premature lock-in, right? but preserve the ability and flexibility to adapt as both technology and the markets evolve. So don't give up on that. But waiting for the next best thing to come along is a recipe for disaster. How do you advise CPOs on their use cases? If you're looking to pick one or two areas of experimentation, what should be true for an opportunity to be one that is worthy of an experiment, a proof of concept, a pilot?

12:20Yeah. No, I think that's also a really good question, Phil. At the end of the day, it has to be customer back or impact back. What are you trying to solve? And so that's a question I often get asked by clients. Which ones would you recommend? And I would say it's not for me to recommend. It's for you to decide what problem are you trying to solve? which is the impact that you're trying to achieve. And the impact can be, and it's different for different folks, right? There are different sources of impact. In some cases, it could be about efficiency because you're having a lot of problems with on-time payments.

12:56And therefore, you're trying to really drive, reduce the cycle time of transactions just so that you can pay your suppliers faster, or at least in accordance with your payment terms. It could be about effectiveness because you're about saving money. It's much more around cost savings because that's the industry cycle you're in and or that's the situation for your company. It could be about experience. You want to be a better partner to your business and there's a lot of noise in the system and therefore you're really trying to solve for that. And it's not, none of them are wrong. And the question is, which one do you prioritize?

13:30And it goes back to what's the impact you're trying to achieve, right? the reality is today even in its even though we are in the very early innings even even then that majority of the technology is enough for you to be able to tackle the each of these problems and achieve impact in each of these three different archetypes if you will um i think it's interesting what you say about you know just just going ahead and trying something and starting I think what comes to mind as you're talking is that it's easy to feel that you're already behind the game. You know, you look and you hear these stories of organizations who are doing really interesting things using AI.

14:13Or you feel, you know, just from a personal level, you're scrolling on X and you're seeing everybody who's doing all these things with, you know, the latest cloud or the latest Anthropic or the latest open AI model. but sometimes it takes you got a step back and realize that's the top one percent or top top two percent that's not necessarily the reality at scale yet even if this is moving fast and not to feel as though you're behind the game in any way shape or form or that well if we're not already at this stage then we're never going to catch up everyone's always going to be ahead of us that there really is no time like today to at least get started and it doesn't mean that you're always behind everybody else and I just wonder if that's kind of how you think about things as well with.

14:56Because when we're in it all the time, it's easy to think that, you know, we have to be doing the next best thing. And that's not necessarily, I think, the reality of most organizations and most leaders within most organizations today. I would totally agree. You know, but I might frame it in a more provocative manner by saying, you'll always be behind. Because the pace of disruption is so fast and so rapid. And the pace of technology disruption will far outpace the pace of organizational or people disruption, right? And so you'll never be on top of this. You'll never be ahead of the curve, frankly, because of everything that's happening.

15:37But that's not a reason not to start, right? Get started. And ultimately, it's not about tech for the sake of tech, knowing the later, you know, working with the latest model of claw, the latest model of GPT. It's about the impact you're trying to deliver. And that's where make a few bets, but be flexible enough to fail fast. If you're not getting the impact, then switch to another different use case. And then the other piece that's really important is when you've gotten past that pilot and you've proven out the value, scale that impact before you move to a different use case. Don't have AI ADD, so to speak, as you jump from use case to use case because that's why companies get into what they call pilot purgatory and then you hear all these reports about AI not delivering value and so on and so forth.

16:28And I just think that we are shooting the messenger in a way. Yeah. Now we talked about such a fragmented market at the moment, a growing market. And that is part of, you know, how part of our use case for really investing in building and growing the ProcureTech 100 program. You know, for those who are not aware of ProcureTech 100, it's an annual program right now of where we have a number of judges who are CPOs and heads of digital procurement and real experts in the field who are all coming together to look across the landscape of procurement technology providers to identify 100 companies who are the leading edge, who are those that you really should be looking at.

17:13for example when you're putting together your rfi or your rfp for different um technology solutions we did the first one last year and i think that it was the first one for outer procurement this is a program that we we acquired from outside um and we're starting to continue to build and evolve on the program of which sammy you were involved last year and i said at the top of the show you've joined the aop as an advisor to really help drive and lead the program uh for the 2027 cycle So I wonder if you just talk a little bit about how what you're seeing across the Prokertech landscape and those kind of different elements of growth of change within the providers.

17:52How is that informing the Prokertech 100 program as we're building it, looking into the next cycle? Yeah, so that's exactly right. And I think kind of continuing on the theme from the prior couple of questions, you know, the tech landscape is very dynamic. And I think by definition, therefore, the PT100, Precotech 100 program cannot afford to be static. It needs to be agile, adaptive, reflect the dynamism, if you will, of the tech landscape. Right. So a couple of things that, you know, as we look into 2027, we'd like to do. And some of it is based on what we're seeing in the market, but also what the feedback I think that we received from the providers and practitioners alike.

18:40One is to make the taxonomy evolve it, to make it more refined and more intuitive, less overlappy, if you will, more distinctive, if you will. And so as companies expand their solution footprint. They can compete in more than one category. Right. So the implication of that is that there will not be a source-to-pay suite category, because if you think about it, it's more of an architectural or a delivery model, commercial model of how companies choose. But a company that offers a source-to-pay suite will effectively be able to compete in the sourcing category, in the procure-to-pay category, and so on.

19:22Also, given the number of startups, you have a real spectrum of companies, small, less than a $10 million in ARR to hundreds of millions of dollars in ARR. And it's important to be able to kind of at least distinguish them. So one of the things we're looking at is establishing a tag for established and emerging categories by each category. I do think that at the end of the day, though, one of the things that we want to make sure is that the whole evaluation process is credible and it's defensible. Because at least in my mind, I would like to see ProcureTech 100 become the most trusted and defensible guide to the procurement technology market.

20:12And we'll evolve there. We're not frankly there yet, but I think that's where we should aspire. I would almost think of it as the Rosetta Stone for the procurement tech, right? That's helping practitioners decode and navigate what's as i said before an increasingly uh complex and overcrowded market yeah and i think that you know that there's a couple of elements to that one is data so having um uh you know we we've used data in the past we're looking okay how do we use even more information uh kind of to make it quantitative um but also there is this is where a lot of the judges come and the judging committees that we pull together, that's where some of the most interesting insights come is real users who are your peers who actually have experiences of using and implementing the tools that go beyond what the demo looks like or go beyond what the business case looked like.

21:06And bringing in those real world experiences and aligning that with data is what I think really makes the program different. No, that's exactly right. In fact, that's a really good point, Phil, because also when it comes to the judges, we want diversity of judges. So that there's no one individual who can really encapsulate or represent the entire market. You have companies of different sizes, you have procurement functions of different maturities, you have variations and nuances based on region and cultures. And so as we move into 2027, and again, it's not going to be a one, once and done, there's going to be a push to evolve and increase the diversity by gender, by geography, by company size, etc.

21:54as well, so that the outcome is relevant for the broader procurement community. One of the questions we got a lot last year was from providers who were not in the 100 asking, well, what advice do you have for us? And I think this question isn't necessarily what advice do we have for providers to be in the ProcureTech 100. I think the question is what advice do we have for providers generally as they're coming up against these challenges within the procurement tech space? Because to overcome those helps you become more known, helps you become, you know, the judges become aware of you, understand what you do, can figure out your place in their tech stack, and they can talk more positively about you when it comes to voting in a program like this.

22:39But just kind of more generally, given what you said about companies looking the same as each other, this kind of explosion in the number of companies, what do you say to founders, to heads of go-to-market, to heads of marketing, to the providers in the procurement tech space today? Yeah. I would say, first and foremost, stop selling AI. Start selling business outcomes. Yeah. Right? Too many providers have this tech forward mindset. They're talking about features and functions and agents and tech capabilities, et cetera. But procurement leaders are not buying AI. They're buying improved business outcomes.

23:21And so if you can start changing the narrative, the framing of what your solution does, the problems it tries to solve, and then guess what? Even synchronize your commercial model around that. I think immediately you're creating some strategic distance from the rest of the tech providers. The second thing I do want to bring up here is, you know, I hear a lot of around design partnerships between providers and practitioners. And I personally believe this can be incredibly valuable because the last thing you want is for some founders and a bunch of data scientists and data engineers to build something in an ivory tower.

24:00But at the same time, the real value will come if these design partnerships are used to rethink how work gets done and not simply digitize today's processes. That's such a huge risk because if you start out by saying, OK, how do you do things today and how do we then use AI to improve them? You're kind of really missing the real value boat, if you will. I can make it faster is not necessarily the real value that you're going to get out of this. Exactly. And in fact, there was a recent McKinsey study in homage to my former company employer that said that AI high performers are nearly three times as likely as others to fundamentally redesign their workflows with AI.

24:48so the chance of success dude that makes you an ai high performer is that much more if you actually have both the gumption and the appetite to to reimagine how you do things yeah i've seen um some some survey data from hfs who was our partner in catalyst as we did some work with them and will continue to do so in New York about the companies who are looking at AI usage to help drive growth, you know, as opposed to looking at just as an efficiency play are actually finding that their top line is growing, but also their employee base is growing because they need more employees to support the growth.

25:32And those that are looking at as efficiency play, you know, are kind of stalling because it's, they're not looking at the full potential. And I think this is true for procurement as well. It's not about how do we think about this is what procurement is, this is what procurement has always done, so how do we make that more efficient? But how can we reimagine what the value proposition is for procurement and how we can help our business in different ways? And that's how we reposition, that's how we grow as a function within an organization and go well beyond, I just want to make my sourcing process faster.

26:03No, that's exactly right. And, you know, when it comes down to this question about how does AI create value, right, which is ultimately what we're talking about, I think of it in very simple terms. I don't think it has to be that complex. And the way I look at it is there are really two archetypes of impact at the end of the day. It's doing things better and then doing better things, things that you couldn't do before, right? So doing things better, that's about the efficiency and productivity and cycle time reduction and all that that we talked about. But that dwarfs in comparison to doing better things.

26:37Things like continuous risk sensing that you can do before. Expanding procurement's influence over spend without adding headcount. It's about reducing demand. Things that you were asking suppliers to do that now you can insource. It's about preventing leakage by detecting policy violations in real time. I mean, there's just so many things that people weren't doing yesterday because they couldn't or it would require an army of people to do. And now they can do it. Yeah. Well, it's definitely exciting times. And we're going to be, you know, as those watching and listening to us today are going to hear a lot more about the Procuretic 100 over the coming months.

27:20Our timeframe is that we'll be publishing the 2027 Procuratech 100 in the December timeframe. So it'll be early December. But in the meantime, we are open to, you know, if you are a practitioner and you're working with technology firms that you would like to be included, by all means, let us know. If you're working inside a Procuratech firm and you want to be included and considered as part of the Procuratech 100 when we're starting to do our research, please let us know too. We're not trying to close doors on anybody or make this a pay to play or anything like that. We want to just surface those organizations that are resonating most with your peers as possible.

28:00You can do that by just going to atoprocurement.com slash contact. There's a contact form there or emailing us at contact atoprocurement.com. But also, if you'd like to be considered as a judge, you're a CPO or you're responsible for buying digital technology or a head of digital technology within procurement, reach out to us, let us know as well. As Samia said, kind of looking always at expanding that pool of judges to help us craft that 100 list for 2027. So Samia, I want to wrap up by thanking you for joining me on the podcast today, but also really excited to work with you at Art of Procurement.

28:37And as, you know, amongst other things, really helped to grow the Procuratech 100 and make it that one place to go, as we talked about the vision is. So thank you. No, likewise. Glad to be here. And anybody listening, thank you for listening in. Again, contact at artprocurement.com is our email address. If you have, from a judging perspective, or you have providers you'd like to be considered, we'd love for you to reach out and get in touch. So until next time, thanks for listening. Thanks for watching. And we'll talk to you again soon. Thanks for listening to this episode of ProcureTech Insider.

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