The A to Z of Spend Matters Future 5 2021 — Introducing Pactum

[ad_1]

Pactum

As markets evolve, grow and mature, supply and demand changes. Businesses must continue to adapt and so must the tools they use to support them. The procurement technology market too is rapidly evolving to respond to changing needs, talent maturity, compliance, regulation, risk, faster time-to-market and more. It’s not easy for heads of procurement to keep a watchful eye on the new, adaptive technologies and capabilities that are entering what is already a very crowded space. But Spend Matters does.

Our procurement technology analysts scour the market each year to find those new solution providers that can fulfil a very specialist and niche role to cater for procurement’s current needs. After weeks of strong debate and scrutiny based on their extensive market knowledge of the procurement technologies they review, analyse and benchmark every day, they wheedle down tens of start-ups to find five that they believe are exciting, have a rapidly rising presence in the market, are in it for the long run, and which every CPO should have on their radar.

These start-ups invariably take existing technologies much further to address the problems they can’t, or are introducing a new category of automation that tackles new challenges in interesting ways. We believe these companies deserve greater visibility, especially in a market which is increasingly consolidating and diluting buyer choices.

So we are delighted to introduce you to our Future 5s as we capture their voices. In no order of preference other than alphabetically they are:

Introducing Pactum 

Pactum is an AI-based system that helps global companies to autonomously offer personalized, commercial negotiations on a massive scale. The system adds value and saves time for both the Pactum client and their negotiation partner by aligning their values to determine win-win agreements via an easy-to-use chat interface that implements best-practice negotiation strategies.

Read more about what Pactum does and our reasons for its selection here.

We talked to Martin Rand, CEO and co-founder of Pactum, to understand more about …

How Pactum came into being

“I used to serve as Product Manager at Skype and as the commercial lead for Europe for The Climate Corporation (owned by Monsanto) where I gained first-hand experience of successfully conducting complex negotiations with culturally and geographically diverse teams. Prior to co-founding Pactum, I also co-founded and served as CEO of another start-up, VitalFields, an online Farm Management System that was acquired by Monsanto.

It was during his time negotiating international agreements for Monsanto that I realized how complicated even the most common business deal-making process can be. Often, people treat negotiation as a zero-sum game – one in which someone must lose. That causes other issues. For example, around 80% of companies’ commercial agreements are high-volume and low-value, the so-called tail spend. There are so many suppliers in this category that it gets hard for the business to keep on top of them, let alone manage those deals effectively and efficiently. As a result, millions of dollars’ worth of value are left on the table and many suppliers go unmanaged.

“Back in 2019, Kaspar Korjus and Kristjan Korjus reached out to me, a friend and former colleague, for some advice on a potential start-up. After hearing them out, I set on a mission to persuade them to join forces and start something related to negotiations instead. That’s how Pactum was born: Built on the belief that the best deals get the best for both parties without harming each other – something known as the Pareto optimality .

“Kaspar Korjus came to the table with ample experience in solving complex negotiations, as the managing director of e-Residency, one of the most ambitious government tech projects in Europe. In that role, he had persuaded the police, the Foreign Office, the prime minister, the president and all ministries to invest government money to open Estonia’s sensitive electronic infrastructure to all foreigners in the world so they could start companies in the European Union without ever having to visit. Kristjan Korjus was at the time building artificial brains for autonomous delivery robots at Starship. His PhD thesis was about deep learning agents aligning their values and collaborating. He led a team that replicated DeepMind’s original work that made waves in scientific media and his team members went to work for Elon Musk’s OpenAI and to DeepMind.

“Among we three co-founders, we had the strongest team for automating negotiations, so we set out to raise funds and turn our idea into a reality — autonomous negotiations.”

What’s Pactum’s greatest strength?

“As I said, the majority of companies’ investment is dedicated to dealing with a small portion of their suppliers.  Actually, about 80% of businesses’ providers go unmanaged, leaving money on the table (about $240 million for the average Fortune 500 company). Managing that tail spend, especially when dealing with large suppliers, is time-consuming and labor-intensive, to the point where many procurement professionals consider that optimizing this spend isn’t worth the effort. As a result, a high volume of non-strategic suppliers go unmanaged, leaving millions locked in inefficient negotiations.

“Pactum’s solution is designed to fit easily within corporations’ strategy and tech stack, enabling them to remain at the forefront of innovation while expediting their time to value. In practice, it’s all about helping procurement professionals automate and streamline repetitive processes and manual tasks to increase efficiency, improve accuracy and create value. Pactum’s AI automates contract negotiations between businesses and their suppliers and solutions providers. It can complete complex negotiations in just a few clicks and find an agreement for both parties in as little as 15 minutes.

“This intelligent automation allows businesses to engage suppliers simultaneously and on a mass scale, freeing their teams to focus on strategic work.”

What’s next for Pactum?

“Pactum is currently enabling companies like Walmart, one of the ten largest banks in the world, a Fortune 200 electrical manufacturer, a top logistics brand and other industry leaders across retail, consumer packaged goods, logistics, industrial, financial services and automotive to create between $2 million and $11 million of new value per $100 million of tail spend. Some of these companies are already seeing gains up to 6.5% in profitability from each supplier deal Pactum negotiates on their behalf.

“Our autonomous negotiations are built upon advanced mathematical models and cognitive science and designed to reach optimal agreements for both parties in a matter of minutes, yielding the potential to achieve 2% to 11% in savings in this spend category.

“We believe that there will be a day when Pactum autonomous negotiations will get you a better deal. Pactum is building software that helps businesses prosper by automating contract negotiation on a mass scale. This is just the beginning of the journey. The technology can be deployed in other use cases, such as employment contracts, licensing or rental agreements. It also yields the potential to help people reach agreements on major challenges, especially where global cooperation is required.”

What does it mean to be a Future 5?

“For Pactum, it’s an honor to be a Future 5. We are humbled and proud of being considered best-in-class by the procurement professional community overall, knowing how tough competition is in this space. Procurement transformation is rapidly unfolding and being part of it is exhilarating. At Pactum, we take pride in placing both our clients and their suppliers front and centre of everything we do, and being part of 2021 Spend Matters Future 5 is really a great testament to the entire team’s innovation and work ethics.”

Future 5

Many thanks to Pactum for sharing their story with us. We hope the Future 5 broadens our readers’ perception of what’s possible with technology to help you position your organization to address the future’s challenges.

The Future 5 list is a true complement to our 50 Providers to Watch and 50 Providers to Know lists, which highlight the more established tech firms you should either be watching or get to know. Many outstanding procurement technology start-ups move from early-stage to market…

[ad_2]

Read More: The A to Z of Spend Matters Future 5 2021 — Introducing Pactum