Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Business software vendor Cleo has acquired DataTrans Solutions, a cloud-based procurement automation and EDI solutions provider, saying the move enhances Cleo’s supply chain orchestration with new procurement automation capabilities.
According to Chicago-based Cleo, the acquisition comes as companies increasingly look to digitalize their procurement processes, instead of relying on inefficient and expensive manual approaches.
By buying Texas-based DataTrans, Cleo said it will gain an expanded ability to help businesses streamline procurement, optimize working capital, and strengthen supplier relationships. Specifically, by integrating DTS’s procurement automation capabilities, Cleo will be able to provide businesses with solutions including: a supplier EDI & testing portal; web EDI & PDF digitization; and supplier scorecarding & performance tracking.
“Cleo’s vision is to deliver true supply chain orchestration by bridging the gap between planning and execution,” Cleo President and CEO Mahesh Rajasekharan said in a release. “With DTS’s technology embedded into CIC, we’re empowering procurement teams to reduce costs, improve efficiency, and minimize supply chain risks—all through automation.”
A whopping 90% of procurement leaders have considered or are already using AI agents to optimize operations in the year ahead, according to a survey from Icertis, a provider of artificial intelligence (AI)-powered contract intelligence tools.
CPOs are preparing for an unstable year ahead. Reducing risk and diversifying the supplier base (40%), managing supply chain disruptions and volatility (36%), and addressing inflationary pressures and cost increases (35%) are among the top five challenges anticipated in 2025 as procurement teams adjust to the new geopolitical climate.
Procurement is successfully cutting costs, but not yet driving measurable ROI. 64% of survey respondents said maverick spending has improved over the past 12 months, but 62% said procurement ROI had either stayed the same or worsened over the same period. This points to an urgent need for the partnership of AI to help optimize contract terms and automate the inclusion of revenue drivers in every contract.
AI and value creation are top priorities over ESG. Survey respondents cited leveraging AI in procurement processes and decision-making (66%) and improving speed-to-value and ROI (55%) as their top two priorities in 2025, ranking both above ESG and sustainability goals, and improving compliance.
AI partnerships are critical to overcome adoption barriers. Integration issues (88 percent) and data quality issues (75%) are detracting from procurement confidence in AI. By turning to industry leaders like Icertis with proven track records in enterprise-grade innovation, procurement teams can harness the power of contract data and seamlessly integrate purpose-built AI and large language models (LLMs) with the systems that run their business.
“We’re witnessing a substantial shift in the procurement function from reactive to proactive as CPOs look to anticipate challenges and build resilience for their businesses with new strategies and technologies,” Chris Rand, Head of Research, ProcureCon Insights, said in a release. “The next generation of leaders is not only embracing AI, but demanding a tech-first approach to sourcing and contracting processes that welcomes AI as a coworker in the ongoing race to capture more revenue.”
Inclusive procurement practices can fuel economic growth and create jobs worldwide through increased partnerships with small and diverse suppliers, according to a study from the Illinois firm Supplier.io.
The firm’s “2024 Supplier Diversity Economic Impact Report” found that $168 billion spent directly with those suppliers generated a total economic impact of $303 billion. That analysis can help supplier diversity managers and chief procurement officers implement programs that grow diversity spend, improve supply chain competitiveness, and increase brand value, the firm said.
The companies featured in Supplier.io’s report collectively supported more than 710,000 direct jobs and contributed $60 billion in direct wages through their investments in small and diverse suppliers. According to the analysis, those purchases created a ripple effect, supporting over 1.4 million jobs and driving $105 billion in total income when factoring in direct, indirect, and induced economic impacts.
“At Supplier.io, we believe that empowering businesses with advanced supplier intelligence not only enhances their operational resilience but also significantly mitigates risks,” Aylin Basom, CEO of Supplier.io, said in a release. “Our platform provides critical insights that drive efficiency and innovation, enabling companies to find and invest in small and diverse suppliers. This approach helps build stronger, more reliable supply chains.”
The concept of using a neutral third party to resolve conflicts between suppliers and customers is not new. Mediation and arbitration have long been considered as more efficient and less costly ways to resolve contractual disputes than litigation. In fact, 2025 marks the 100th anniversary of the Federal Arbitration Act, which allows for contract disputes to be resolved through a private resolution process instead of going to court.
Over the years, the concept of using a neutral has expanded to include more preventive techniques for keeping business relationships healthy and addressing potential contractual misalignments earlier. For example, the construction industry has been utilizing the concept of a dispute review board (DRB) since 1975 to solve issues that arise during major projects, such as cost overruns, schedule delays, and disputes over payment or the quality of workmanship. The DRB is typically a panel of three independent expert advisors who are immediately available to help resolve disputes that arise during the contractual relationship.1 The panel is formed at the beginning of the construction project with the goal of resolving any issues or differences before they become formal claims.
Recently the concept has evolved further into what is now known as a “standing neutral” and has been adopted by companies in many industries outside of construction. A standing neutral is a highly qualified and respected expert, selected by both parties in a business relationship to help them resolve issues and maintain a healthy relationship. This can best be described as a proactive approach where the neutral provides quick, informal, flexible, adaptable, and nonadversarial ways for preventing disputes.
The role of the standing neutral
Unlike a neutral third party used on an ad-hoc basis for dispute resolution in mediation or arbitration, a standing neutral is a readily available “fast response” technique. It is designed to prevent any issues from escalating into adversarial disputes that might otherwise go to mediation, arbitration, or litigation. A key feature is that the neutral is “standing,” meaning it is integrated into the parties' continuing governance structure. Another key concept is that the standing neutral supports the relationship itself and both parties equally; the goal is to ensure the success of the relationship.
Embedding a standing neutral into a contracting party's governance structure can have a powerful impact on the success of the business relationship. The standing neutral provides a helpful "dose of reality" to the parties and encourages them to be more objective in their dealings with each other. When differences of opinion arise, the parties can quickly use the standing neutral as an objective sounding board, obtaining a recommended course of action that is minimally disruptive to the business relationship.
While the classic role of a standing neutral is to serve as a “real-time” issue-resolver throughout a relationship, companies have begun to expand how they have used a standing neutral. The University of Tennessee’s research—which is detailed in the white paper “Unpacking the Standing Neutral”—reveals the creative ways that companies are using a standing neutral.2 For example, some companies are increasing the role of their standing neutral to support annual relationship health checks and even using neutrals as “deal facilitators” to help craft highly complex or strategic outsourcing agreements.
Today, there are many different variations of a standing neutral. Figure 1 shows some of the most common options companies can consider when designing the role and scope of their standing neutral. In the figure, these options are organized across nine design principles or considerations. For an example of how a standing neutral can operate in a real-world setting see the sidebar “Idea in action: EY case study."
Getting ramped up
If you think using a standing neutral would benefit one of your relationships, we suggest going through the following simple stages. It’s important to note that the cost and expenses of the standing neutral are absorbed equally by both parties.
1. Selection: At the outset of their relationship, parties select one person (or three) with whom they trust and have confidence to serve as standing neutral throughout their relationship. A single standing neutral should always be entirely independent. In most cases where there is a panel of neutrals, each party nominates one member, and the two nominated neutrals will select a third member; in such cases, it is typically required that every panel member be acceptable to both parties and that all panel members be independent and impartial, with no special allegiance to the nominating party.
As part of the selection process, the parties formalize an agreement with the standing neutral, which includes determining the standing neutral's responsibilities and authority. The nine design principles in Figure 1 can be used to accomplish this.
2. Briefing: The parties brief the standing neutral regarding the nature, scope, and purpose of the relationship or venture. As part of the briefing, the standing neutral is usually equipped with a basic set of contract materials and supporting documents.
3. Continuing involvement: A key part of designing a standing neutral program is embedding your standing neutral as part of your ongoing governance. For example, we recommend at a minimum that the parties have their standing neutral attend the parties’ quarterly business reviews and lead an annual relationship health check. This enables the standing neutral to meet regularly with the parties to review the progress of the relationship, even if there are no issues.
Alternatively, it is possible to have a
standby neutral (versus a standing neutral). In the case of a standby neutral, the neutral is merely available on an ad-hoc basis to be called on whenever necessary to give an advisory opinion.
Why standing neutrals work so well
Standing neutrals have had a remarkable record—especially for resolving issues before they become disputes. A study of the use of standing neutrals in the construction industry found that, in the vast majority of cases, the parties never look to the standing neutral to make any dispute resolution recommendations or decisions. (And in the small minority of cases where the standing neutral actually makes a recommendation, 95% of the recommendations are accepted by the parties without resorting to mediation, arbitration or litigation.
3)
It may seem counterintuitive that having a standing neutral reduces the likelihood of needing a third party to resolve disputes. But research has found that the presence of others causes people to behave more honestly and reign in unethical behavior such as cheating. These effects are amplified when the third-party observer is knowledgeable in the subject matter of the agreement and in the nature of the agreement.
The establishment of a standing neutral—which appears at first to be merely an efficient technique for quickly resolving disputes—creates a dynamic situation in which the participants change their relationship and their attitudes toward each other. The changes usually are an evolution, rather than a conscious effort. For example, at first it is common for contracting parties to feel they are simply choosing a neutral expert for resolving conflicts between them promptly. However, as the standing neutral interacts with the parties during ongoing governance forums, the parties develop a greater sense of confidence in the standing neutral's ability to quickly alleviate friction in the relationship. When this happens, the parties shift their view of the standing neutral from “dispute-resolver” to one of “sensible sounding board.”
The presence of a standing neutral also encourages teamwork and improved performance by all parties. The contracting parties become incentivized to concentrate on “fixing the problem” rather than “fixing the blame,” and use their mutual knowledge to solve the problem rather than relinquishing control to the neutral. A side benefit is when the parties construct their own solutions to problems, they often increase their trust and confidence in each other's abilities, which ultimately strengthens the relationship. For these reasons, the standing neutral serves as not only a standby dispute resolution process, but also as a remarkably successful dispute prevention process.
Notes:
1 For more information see A. A. Mathews, Robert J. Smith, Paul E. Sperry, and Robert M. Matyas, Construction Dispute Review Board Manual, (New York: McGraw-Hill, 1996): p. 10
The “D&B Ask Procurement” product works by synthesizing vast datasets and providing intelligent recommendations, according to Dun & Bradstreet, which calls itself a provider of business decisioning data and analytics.
It was built with IBM’s watsonx Orchestrate and watsonx.ai technology with support from IBM Consulting, and connects to Dun & Bradstreet’s business risk, financial, and firmographic data and insights. It then uses a conversational chat interface to provide advanced reasoning capabilities and autonomous decision making, helping teams to query critical supplier insights, expedite analysis and reporting, and identify suppliers for engagement, the partners said.
“One key point of entry for Gen AI adoption is AI assistants, and together IBM and Dun & Bradstreet are collaborating to bring clients new innovations within the procurement domain,” Parul Mishra, Vice President of Product Management, Digital Labor at IBM, said in a release. “With D&B Ask Procurement, an AI assistant built on the foundation of watsonx Orchestrate, users can seamlessly complete tasks and automate complex processes with natural language, helping drive efficiency, cost-savings and higher productivity.”
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."