Replay | The Future of Procurement Orchestration

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awesome now we’re live we are so excited to have everybody here with us thank you so much for joining us today we are
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super excited to be talking all about the future of procurement orchestration with dear friend of focal point Don who
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has joined us from Sig we’re so excited to have her so we’ll go ahead and let everybody trickle in but as we get
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started um I have the pleasure of introducing you to our panelist today so
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we have Matthew Buckingham joining us um from focal point and of course Anders
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our CEO and founder joining us from focal point as well and like I mentioned uh the lovely Dawn who is joining us
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from Sig or sourcing Industry Group so we’re super super excited to have you here today um as you guys know it’s
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right on the tin today we’re going to be talking all about procurement orchestration you’ve heard it it’s
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everywhere it’s on our LinkedIn feeds um but more specifically today because we
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have um so much tenure and wisdom on the panel we want to talk about what the future of procurement orchestration
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might look like um and we’re going to go through four questions the first being where are we
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at now just doing an analysis of procurement orchestration and what what it means truly and then we’re going to
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talk a little bit about the blind spots in today’s orchestration processes and potentially solutions to see where we
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can improve and where teams might start to Future proof we’ll talk a little bit about where orchestration is headed um
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which is what I’m most excited to hear about and then of course we’ll talk about how these emerging needs to be can be addressed because of course we want
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to set ourselves up for Success so all that being said um we’ll go ahead and
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jump into the first question if any of you want to do any any way of intro or anything else um before you start
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chatting please feel free but our first topic is going to be what is procurement orchestration
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today so I want to tee that up to you because it is we have been hearing so
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much in the so we talked about intake that was the big buzzword for 2023 2024
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intake suddenly became procurement orchestration and it seems like it went
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from one small part of the process to a ton of the processes being implemented
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so I really would love your definition since you are the founder in CEO to tell me what is the difference between intake
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orchestration and procurement orchestration and I know our members would love to know the difference as well well intake is is a function of how
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you get work into procurement or how you get that work sort of into a funnel if
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you will either through self-service or through help from procurement and it
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could be down in various channels right orchestration funny enough is something that procurement has been doing for
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centuries really right it’s about getting that that thing done that you need to get done whether that is
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onboarding a supplier or doing a financial stability assessment or whatever right so procurement has always
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been orchestrating how to get from an idea to a contract to a PO to a payment
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now however we have tools and solutions that can help us streamline those things
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and make it more user friendly expedient pulling on thirdparty data sources
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whatever the case may be to make that process easier and better for users to
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do in a more hardened and IND Industrial Way and I think you know I obviously
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read a lot of this stuff right and I think Gartner in the procurement hype cycle put procurement orchestration as
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sort of still sort of in the in all the going up the the broad curve on the hype cycle meaning we haven’t quite reached
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the plateau yet of of unex you know of unrealistic expectation I think still think we’re figuring these things out
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and I think you know if you ask you know three providers you’re going to get three different answers because they will always sort of tailor orchestration
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to what they want it to be which is what they have developed right so I think what I would
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encourage procurement practitioners to do is to tell providers and Consultants
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alike to say look this is what I need to do this is how I you know these are the things I’m being asked to achieve how
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can you help us do that and not necessarily say well I created an intake solution that gets to a PO that gets to
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a payment that’s orchestration for us life is good right that’s that’s a very simplistic way of doing it but I think
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orchestration really needs to sort of do whatever the hell procurement wants to do and needs to do to get their jobs done
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so are we talking about touching the entire source to pay cycle in small ways
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or are they is it yes so how about this what does focal point do with regard to
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orchestration so we kind of look at things a little bit differently and we’ll probably look at you know we’ll
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probably get there as part of this call right is fundamentally having been in procurement
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for a number of years like I kind of look at things like you need a you need a data layer to be able to sort of focus
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orchestration in on something so what we do is we consolidate data from the Erp
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the CLM the source to pay system and normalize it on the axes that you would normally do in procurement the supplier
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category stakeholder whatever the case BB and we use that data to fuel the
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orchestration and on top of so basically we can do an intake and we can use orchestration for that so if someone
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says I want to buy software we can take them down the software buying path and you say well how risky is it all right
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if it’s risky then we can add two or three tasks whatever the case may be right we also do this in procurement projects where you can say all right our
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sourcing process has seven steps here are the things you need to do and here’s how to do them and then we also speed
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that up through to say all right click here if you want to onboard A supplier and you start the onboarding process click here if you want to do security
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assessment or information security assessment or legal review whatever the case may be so this kind of facilitates that process in the steps that
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procurement is familiar with right so if your organization has a six-step process
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fine we can create a six-step process if you want to do a two-step process no problem with that as well but we also do
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this off of orchestration off the procurement meta sorry the contract metadata so rather than having the
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procurement uh sorry the the contract solution sending out an email saying hey your contract’s expiring we can make
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that actionable to say hey Bob your contract’s expiring click here if you want to renew click here if you want to terminate click here if you want to talk
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to procurement and these are all different workflows that are set up on an individual client basis to say all
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right okay I want to renew for two years and I you know if the pricing stays flat
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we can automatically then say all right if those two conditions are met and you know through the the rfx engine then we
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can automatically publish a PO for example right so we take the human element completely out of it so we kind
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of so so we kind of look at things because we have all this data that that fuels things we can actually you know
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serve up that data as and when needed rather than having people go all over house sers look for
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it okay I think I think realistically Anders hit it right at the
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beginning there which is you know procurement has been doing this for years this is why companies set up
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procurement organizations in the in the first place and it’s it’s to orchestrate the whole whole thing around spend it’s
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not just taking an intake and and pushing it through it’s it’s actually also doing everything else that
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orchestration or or that the procurement team does um coming back to the question
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what is procurement orchestration today it at the moment honestly in the definitions that are out there it’s
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whatever that company wants it to be that’s that’s selling something um and and the majority of those are honestly
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only looking at intake orchestration so it’s taking something in and it’s buying
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something or some service or some some um that’s what a lot of companies are
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are defining as orchestration we take it one step further well about 15 Steps further but let’s
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say one step so would it would it be simplistic of me to think of myself is
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if I am conducting an orchestra which is the way I think of orchestration and
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it’s like all right now it’s time for the contracts to come in and here is the risk assessment and now it’s time to
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ring in over here and is that sort of what we’re it what the software is
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designed to do is at the right time bring in the right part of the company into the sing process or is that too
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simplistic yeah and I I think that’s what we’ll get to slightly later on but yeah it is it’s it’s like making sure
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the right person is playing the right instrument at the right time um maybe in harmony with somebody else playing
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another instrument as well right um so it could you know it could be the violins playing with the I don’t know
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drums at the same time one one could be leg one could be legal and one could be
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uh marketing um but you have different people in in engaged doing different things but but the conductor to take
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your analogy one step further is is the procurement person potentially at that
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point and but he’s also getting he’s reading his music through this through your
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sofware correct yes okay yeah the the music is composed
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within the solution that we took it full circle you know I really like this I like sitting here thinking I should have
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made a list of orchestral um Orest vocab words before jumping on I was ready with
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the metaphors and I wasn’t but I love that we’ve taken it let’s just take it one step further so it used to be with
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the old procurement it was like orchestral Maneuvers in the dark and now we’re bringing it into the light on how’s that yeah well we’re also not
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doing it by calling someone up or sending an email or remembering to flag it on my calendar that this contract’s
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renewing it’s taking so many of the the dumb work the stuff that’s boring
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comptitive and stuff that that’s critical if we forget to do it um it’s
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taking that risk out of the equation so that’s why I’m really excited about the orchestration because how many calendar
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reminders do you need about contracts renewing and you know and how many times you know you go to renew and the person
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you know your internal business holder business unit owner is on vacation when it comes up for Renewal and had you
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known this earlier it would have been automated and talked to them before they go out so I’m really excited by it and
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what it could mean and just not to have to walk around and look up policies and books and I mean you remember Anders
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back in your procurement days I mean our our company policies could be that big and that’s that big I mean they were
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huge and you literally would go find the binders on the shelf or the books and you’d start flagging through them to see
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which policies you needed to apply and I’m dating myself obviously I love I love it I love
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hearing more I love when I get a detail about Anders and and Don procurement days it’s it really does add add to the
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full picture I love that yeah cool well I think that we started off with a a
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great question we’ve we’ve really set the stage so let’s move on from here um to topic two um talking about all that
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seeing that we’re on you know we’re on that upward Trend um as Gardner recognizes in the hype cycle as this
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expands where do we see blind spots popping up in today’s um orchestration processes as we’ve identified them here
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or as we see them you know existing as things are playing out in procurement real time dayto
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day so I think I think when we think about orchestration I think folks
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typically think about a transaction right so I need to buy something and I
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think that’s because that’s what most people think about when they think about procurement and the way I kind of look
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at it is we also need to use this as we’re managing our suppliers as we’re managing third party risk as we’re
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managing category strategies and so on and and I think that tends to be the
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blind spot is that you know there are a lot of good companies out there with are good Tech but they’re so focused on the
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Tactical procurement part at the loss of everything else and I think maybe that’s because you know that’s flavor of the
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month as as intake turn into into intake to procure right you know if all you have is a hammer everything looks like a
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nail right and I think that’s kind of how competitors have come into the space as well so I think the blind spots for
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us is is that we need to sort of apply this orchestration analogy to the other
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parts of procurement that are just as important as transaction processing so I’m using this as a primer
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for me to learn about this so I’m gonna keep asking questions though though about
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this was your is your platform built for procurement or was it built for
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orchestration and then you said oh this will look this will work well in procurement it was I mean look as you
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know I spent a few days in procurement in my time right and the idea was really that I would spend millions of dollars a
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year on procurement technology but the Strategic stuff we did was happening off
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system manually poorly done in Excel for the most part right and the Genesis of
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the solution was really to bring everything into one paint of glass so you can look at everything in one spot
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whether that is Supply or D details or project details or what projects is a person working on how much money is are
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they saving whatever the case may be and we didn’t start off thinking that we were doing orchestration but this is
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really what we were doing to say look here’s a sourcing process of this complexity here are the tasks you need to do and you sort of like you follow
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the redc crumb Trail along Now smarter people than I came along is said well that’s called orchestration let’s make a
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category from that for me it was more about this is how procurement has been doing this for years and years let’s
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find a solution that can put everything on system rather than tracking it like I said manually poly in
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Excel so what so going back to the conductor if I point to a chair and the
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chair is empty and let’s say it’s contracts I don’t have a contract management system I’m using
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SharePoint does that mean that suddenly the Music Stops or is that one of the
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blind spots that we get in orchestration where we don’t have a system so you know hooker by crook we
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kind of end up building these kind of pieces right so that in the first instance we sort of said look we want to
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feed off of the source systems and take the metadata and run workflow off of it
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but of course it doesn’t take very long for that very same example you just brought up to say well we don’t have a
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good contract management solution and all of a sudden we say well I guess we can create a repository for you because
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we have all the metadata fields we have we can store attachments like why not also give you a contract solution as
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well like we will never compete at least to my knowledge we will not compete with the good Solutions out there but if if
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you have one that’s maybe outdated or one that is you know replacing SharePoint definitely you can use our
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solution but there are things that we don’t do or will not do uh so I think to
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some extent yeah you need some procur tech out there but it really depends on what you is he trying to do so do you
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feed the procurement technology all of my policies and and rules and everything
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that I have as a is that fed in yep so that it automatically knows what to apply where exactly yeah so we’re both
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we’re both conditionally driven and contextually driven right so if you if we can pick up from your active
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directory or whatever solution you use that you’re in Asia the Asia the Asian rules will apply to you the Asian
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suppliers in the most simplistic way so then that’s context driven so basically
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you get to see what the people in that region get the CO do whatever the case may be but they’re also conditionally
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driven right so if the project is this has this risk then here are the things you need to do and applies to that so
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yeah all those things can and will be
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applied awesome these are really good questions Don well like I said I have
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experts sitting here and I’m Gonna Learn and I’m going to know it really well by the time we’re done
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yeah no and I think D it gives you that opportunity right to to look at Best of
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breed and actually use best of breed as you go along as well certain things within procurement as as
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and said we’re not going to replace and we’re we’re not even going to try and replace um we want to orchestrate the
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whole flow and make it as efficient and effective um for for our customers as as
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possible so when you you talk about you know blind spots yeah I think it has
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become a very transactional um area people talk about intake through orchestration being one
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thing as as we said earlier but you know if you need a really Top Class contract management tool or
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your company already has one and uses one elsewhere within the business as well because sales tend to use some
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contracts as well as I know um then then you can use your Ironclad or your Conger
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or your or your ierce or whatever it is um to do your authoring and all that
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kind of thing often the lawyers are going to going to anyway use word to do their authoring and their uh their
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redlining as we all know that’s what they like so if we can just plug into any and all of those that’s the idea um
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that we can consolidate all of that data into one place and then you can orchestrate much much better the whole
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flow of that from from left to right yeah so can I see trends that you know
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like this contract turned out or these contracts were really really good and produce great kpis and great results and
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then so maybe I can learn best practice from looking at my own data is is that possible so the cool thing that we do as
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part of you know our implementation is we look at uh data that exists already
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then we augment it with thirdparty data sources as well as scraping data from existing contracts for example right
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so the the AI to read contract Clauses and say this is your limitation of liability and here are the exceptions is
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sometimes a little tricky right uh but we’re still training the algorithms but you know what we’re trying to do here is
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really say all right here are the contracts you have in a category by supplier and here are the master agreements with the suppliers that might
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be inappropriately risky those kinds of things right and I think that’s kind of cool because that is the stuff that
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procurement and risk experts want to know about without having to read you know 200 contracts on a need basis right
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so you brought up AI where where is AI built into all of this um so we
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are we’re process first come right so we basically look at procurement processes
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Soup To Nuts and then where we think it makes sense and our customer think it
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makes sense we add the AI components so we have the table stake you know chat
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bot intake solution that people want to say all right I want to buy a green tent for an event in London yeah fine we can
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send you down the right path and collect that data we also have um a like I said
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a contract metadata scraper where we you can upload a contract into a system could be our system or a third party
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system and we then take all the metadata fields from the contract without someone having to look for it right so you can
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upload a contract in a matter of seconds rather than to sort of flip through pages to find out you know the relevant
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information we are also tinkering around with um some some data scraping from the
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internet so we can have onboarding suppliers in a matter of seconds rather than uh the way it is today where
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suppliers basically presented with data they need to confirm rather than having to do all those things manually so we’re
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trying to speed up the pain points you’re getting that that’s typically the the flavor that you need to hear here is
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that we’re finding what the tedious tasks that you know people have to do trying to automate them to the B Bigg
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exent possible so yeah automate the automatable and my I think the best
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thing about this for me is that normally when I ask that question I get a 40,000
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quick level of you know we’re going to we’re going to create world peace and I want to call on the answer and
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what you and and I I’m not calling I think you’re being realistic I think you are being honest and I that
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is so refreshing when we’re talking about what something is not what it not what we want it to be or where it’s
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going to be in three years but what it is today I think that’s I I just want to thank you for that yeah I mean I think
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you will see this again and again with us right so we are not a solution looking for a problem we started with
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the problem first right and that kind of It kind of shows right absolutely cool
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once again really really great great questions on this one so we will keep pushing onto topic three so we’ve kind
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of started chatting about this um but let’s talk a little bit about where we think procument orchestration is headed
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what does the future look like what are issues that we’re seeing now perhaps and and how might we um attack them and I
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would like to frame it that I’d like to see where it’s going to be in two to three years not not blue sky forever but
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what is what is realistic in two to three years how far can you guys take it and do you think you how what kind of
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impact do you think we’ll have so I obviously have an opinion about this right so I spent a lot of time talking
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with analysts and what the things that I’m hearing from the analyst whether it’s Gartner or Spen matters or CPR in
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whatever the case may be right there are a few few themes that come back again and again right so they I’ve been told
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orchestration needs to perform data aggregation and that means taking data from disp system bringing together and
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and enrich it as possible Right the third the second thing is perform data enrichment so take the data that you
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have use third party sources to enrich it so it becomes more meaningful um has workflow as
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conditionally driven and cont textually driven so you can do you know things differently for different
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organizations and the last two is provide analysis or an analytics and
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then number the last thing is provide recommendations right and I think that’s
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that’s a you know that’s far far away from doing that yet right so we we’re
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definitely doing that in certain cases today to say look you you know you’re setting up a project in category X and
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you’re behind in your diversity inclusion targets there you may want to consider looking for more diverse
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suppliers and here’s how you do that and I think that is the kind of insights that procurement organizations are
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looking for without having to go into you know the category dashboard and say all right where am I at the onp on on
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contract percentage where am I at where am I at with ESG where I’m at for Dei like you should be able to say like here
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are the things you need to think about in this context right pretty cool and
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I yeah and and I think the outcome of that is going to be you know you you’re
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going to get more spend under management first of all um so that’s the the output so it’s going to differentiate C
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companies from other companies so companies that adopt orchestration in a in the way that we’re doing it early on
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they’re going to get more more spend under management they’re going to have more effective use of their people
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definitely processes are going to move move much more quickly um but what that impact is
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especially on on newor and and um Sig University is you know it’s going to
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change the way that you’re you’re training people to do things as well as as as things move forward because people
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are going to have more data available at the right time and they’re going to have
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uh going to become much more effective in doing their job in that way um but
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what that means is the way that they do their job is going to change as well so they’re not going to be going out and hunting for the data that they used to
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go and hunt for um maybe the negotiation side of the business increases and and
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you start to negotiate more spend you start to negotiate more contracts in a more effective and efficient way um but
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I think yeah I think there’s a role on effect for everybody within procurement not just not just the tech people not
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just the the buyers um but everybody in procurement effectively yeah I in fact I
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just had a LinkedIn argument with somebody about AI in the future and where it’s going to help and I and I so
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I was using Ai and doing a SWAT analysis for example and and and and in about
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three seconds I had a decent SWAT analysis it would take probably a couple
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more hours to really refine it directly for a company but it took me 75% of the way there the person I was arguing with
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said no that’s to do a good SWAT analysis you need six weeks it’s like I don’t have six weeks to do a swad anym
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and of course he’s a consultant who’s who sells that kind of Consulting and I said no and he said we never going to
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get the quality you’re going get out of someone like me in six weeks I said it’s going to get me 75% there in three
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seconds I can spend a few hours to refine it to 100% and that’s where I think that’s where I think people are
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not it haven’t realized how far technology has come and what it is
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capable of doing and then you know I’m going to go back to my Mantra smart people don’t want to do dumb work and if
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you’re going to have smart people in these jobs doing you know SWAT analys for six weeks shoot me in the head I I
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quit and I’m getting another job I agree 100% Don I think I was actually watching something about this over the weekend
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and do not quote me I could be wrong I’ll follow up with this on LinkedIn but I’m pretty sure it said that chat GPT in
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two weeks for out of all of its users generated more written texts than all
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writings of humans in history like that is the mass of
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data that GPT alone just open AI is creating That’s not including CLA That’s not including you know meta everything
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else so yeah um I I think it is it’s people don’t understand why yeah we might be able to get a swad analysis
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done in a day because we can’t even conceptualize how how powerful these tools are but it’s really exciting to be
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able to talk about how we might harness that power um you know for for day-to-
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day yeah I me go ahead I was gonna say I can assure
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you from the other side of the table if you like from the sales side every salesperson is using chat GPT because it
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speeds up their their ability to get information negotiate things like that
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you know within within sales and I’m talking as a sales guy here um you know
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we’ve been using Salesforce for years and Salesforce is basically an orchestration tool it’s a bit clunkier
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than than the new stuff maybe but uh it’s an orchestration toour for sales this is kind of leveling the play
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playing field some then by by giving that information to procurement at the same time I will warn
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you Matthew I’ve I’ve gotten a few sales chat gpts that applaud me for all the
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work we’re doing in sourcing and oh by the way I see you’re manufacturing a new gun out of Poland and so they’re mixing
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us up with Sig sour and Sig so in the same email yeah I don’t
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I’m not buying your software you might want to read it before you hit send absolutely that might be a better option
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yeah so so I I would just like to ask though do you think we
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can in the next two to three years automate 80% of the manual processes
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through orchestration is that well I think someone still needs to
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do the work right I I don’t think for example information security assessment
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I I don’t think that I think we’re ways away from having someone trust chat GTP that yeah their controls are okay on
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their sock 2’s okay so I think I think the the the moving pieces of paper around on the board is definitely going
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to go away but ultimately someone has to apply human intelligence and get the
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work done right just like we can’t we can’t just blindly rely on a third party
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site to give us data on another entity right it has to come from The Entity right or be validated so I think some of
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the yeah some of the manual work will probably get shortened up significantly but you know the human intelligence
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still has to be applying yeah so I’m I’m never going to think that it’s going to replace 100% at least not in my lifetime
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I I definitely think we need the human intervention the person to look at it and say does this all make sense but one
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thing that we we still suck at in procurement is forecasting do you
29:20
think procurement orchestration will give us enough Insight that maybe we could start forecasting with a little
29:25
better accuracy yeah I I definitely see that and I also
29:30
think that’s kind of where Ai and orchestration can work in concert to sort of say the AI can identify Trends
29:37
and then send a trigger to to orchestration say hey we’re seeing something going on here might want to look at that and that can kick off work
29:44
sort of thing um but I think the data sets that we are are using to train are
29:49
still too small and I think you know companies like oresto and some of the other guys in that field are doing a
29:55
really good job of of looking at demand patterns and say you should buy your stuff in September because that’s when
30:01
the prices are low like that that’s kind that’s kind of cool to me but it’s not quite orchestration they’re sort of
30:06
saying hear some insights you may want to look at that and the question is how can you use those two together to to come up with really good
30:13
outcomes sure so one of these days I’m GNA put together a laundry list of all my pain points and then ask you to solve
30:19
them I love it do it well that was an interesting one that’s that’s exciting
30:25
um we are short on time almost out um but I I honestly think that we’ve done a
30:31
really good job of kind of touching on question four throughout this entire um conversation how can we address those
30:37
needs we’ve been really Solutions oriented which is awesome um but if you guys have anything else that you want to
30:43
to share um please feel free no Don I really appreciate the
30:49
discussion uh we really enjoy being part of of the Sig family uh for quite a few
30:54
years running now both as a practitioner and as a sside person so we really appreciate the collaboration and this is
31:01
a really cool topic and we’re quite passionate about it in the context of helping procurement become better and we
31:08
would love to uh to continue our discussion yeah and thank you for letting me just ask the questions that
31:13
come to mind because I thought I’ve got I’ve got you captive right here you have you can’t say no to me have to answer
31:19
you have to answer on this you have to answer yeah I loved it I thought it was super helpful I really did take notes so
31:26
um thank you so so much Don seriously um on behalf of all of us at focal point and all of us um in the audience today
31:32
did want to let you guys know we have focal point request intake and orchestration for Koopa coming up August 21st so feel free to register to save
31:38
your seat now and we’ll see you guys over on LinkedIn thanks guys have a good day everybody thanks so much bye bye