AI STRATEGY
I think the AI space has had a second step change since the beginning of the year, particularly everything related to agents and agentic workflows. Generative AI gives you an output from a prompt, but with agentic workflows you input a prompt and get a set of actions or a sequence of actions. We’ re seeing people move from having LLMs to help them do their work to having small armies of AI interns. The only problem is that if they’ re left to their own devices, they’ ll produce rubbish, so they still need substantial human interaction.
When I went to the DPW conference, every single software vendor had the words AI and / or agentic AI on their banner. There’ s tremendous AI washing in the space now – companies that built infrastructure 30-40 years ago claiming to be AI native which, by definition, can’ t be true. There’ s a phrase that I really love: there are a lot of magicians, but very few wizards.
“ I call this the AI capability overhang – AI has gotten so much better, but products built using AI are lagging behind the technology’ s progress”
SPENCER PENN, CO-FOUNDER AND CEO, LIGHTSOURCE
We’ ve been working with larger and larger enterprises on more substantial and thornier problems and we’ ve been very proactive about using AI in two different ways. One is in our own organisation – how do we use it to be more productive ourselves? But also within our product at every single turn – how can we make the product more capable for our users?
Q. CAN YOU EXPLAIN HOW LIGHTSOURCE LEVERAGES AI AND AUTOMATION TO TRANSFORM PROCUREMENT FROM A TACTICAL FUNCTION INTO A STRATEGIC ADVANTAGE?
» There’ s this classic chart showing people spend 80 % of their time doing tactical work and 20 % doing strategic work. The tactical work needs to happen – placing purchase orders, following up with vendors and negotiating pricing. But if you’ re stuck in the tactical, you can never think about next year or next quarter, which is the strategic level thinking.
You have to eat your vegetables to get dessert, but the dessert is what will lead you to long-term success and is also frankly just a more interesting version of the procurement function. I would not be interested in procurement at all if it was just literally doing human-based robotic process automation, but by hand. Automation allows people to take that 80 % of very tactical work that’ s very repeatable and replace it with technology.
Traditional technologies are actually best at that kind of work. There’ s a spectrum between agentic workflows, which are much more deterministic
118 July 2025