From Factory Floor to Procurement Platform: 20 Years of Digitalization Lessons

Building procurement tools that solve real problems requires understanding what actually happens in negotiations. In this episode of Beyond Cost podcast, Tset CEO Sasan Hashemi talks to Thomas Dieringer, founder of Pool4Tool (later merged with Jaggaer). Thomas shares lessons from two decades of building cost transparency tools and explains why AI will make today's procurement processes obsolete.

  • 43 min

20 Years of Building Cost Software: A Founder’s Journey From Factory Floor to Boardroom

Beyond Cost

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Meet Our Guest: Thomas Dieringer

Thomas Dieringer's path into procurement software wasn't planned. It emerged from running an injection molding company in Hungary in the 1990s. Constant supplier negotiations taught him something most software founders never learn: the economics hidden inside supplier quotes. After selling his manufacturing business, he founded Pool4Tool, one of the first cloud-based product costing platforms. Pool4Tool later merged with Jaggaer to become one of the largest procurement platforms globally. 

The Procurement Problem No One Knew They Had 

In 2001-2002, Thomas began pitching what would become Pool4Tool to his former customers. But the cloud-based approach was too radical: 

Thomas: "I visited all my previous customers like Philips, like Sun Electric, GVC and so on. I tried to sell them this kind of calculation software which we completely redeveloped in a kind of SaaS application. But I got a lot of complaints because SaaS was that time not really common." 

The breakthrough came from Hansgrohe, a bathroom equipment manufacturer, who wanted more than product costing software. They needed cost transparency from suppliers: 

Thomas: "They liked the concept of the product cost calculation because in SAP at that time, the only way to send out an RFQ was: I send a company an email and they send me back the entire price of the product. But they wanted to get a cost breakdown of the product. So we developed an interface where we receive a request from SAP, we send that to the supplier, and the supplier fills out a complete cost breakdown in our platform. And that was so unique. No other company was able to do that." 

The Cost Transparency Gap 

Traditional procurement software treated pricing as a black box. You send an RFQ, you get a number back. But procurement professionals needed to see inside that black box: material costs, labor rates, overhead allocation, margin structure. Pool4Tool's supplier cost breakdown feature solved a problem most buyers didn't even know was solvable through software. 

This single feature transformed Pool4Tool's trajectory: "Hansgrohe did almost every day a demo for us for another potential client. That was the way how the company was growing." Pool4Tool scaled rapidly through word-of-mouth in the procurement community and eventually attracted acquisition interest from major platforms. 

The Advantage of Manufacturing Experience 

What separated Pool4Tool from competitors was the domain knowledge: 

Thomas: "We always had the advantage compared to other companies that I had this strong manufacturing background, so I knew exactly what companies need and in which direction we should develop." 

This hands-on experience shaped how Thomas approached software development. He understood cycle times, scrap rates, painted versus unpainted parts, and the cascading cost implications when the last production step fails. This domain knowledge became the foundation for understanding what procurement professionals actually needed: tools that revealed the economics hidden inside supplier quotes, not just digitized forms. 

After Pool4Tool's success with cost transparency, Thomas has turned his attention to where procurement is heading next. His prediction? AI will fundamentally reshape how procurement work gets done. 

AI and the End of Procurement As We Know It 

Thomas makes his boldest prediction about the future of procurement and cost management: 

Thomas: "When I recap when I founded all of my companies, it was always the case that there was already a very established process existing, a process for how companies were working. They had worked on their processes for the last 30 years. And then a piece of software came up. And this software, it doesn't matter if you're talking about a manufacturing process, supply chain process, or procurement process, the software was just covering one-to-one the manual processes that existed before." 

But AI changes everything: "Now I think it's changing a lot because the processes are changing, the way how you do things are completely changing. And you have to have a very creative mindset to think about how a process could look like in three years." 

His boldest prediction? Category management as we know it won't survive. 

Thomas sees this shift as inevitable. The traditional planning cycle simply can't keep up with market volatility: 

Thomas: "I'm 100% sure that the whole, the entire category management how you know it today will be useless pretty soon. Because at the end, if you do a preparation for each supplier negotiation in direct, you always redesign your category strategy." 

So what replaces the 18-month strategy document? Continuous, AI-driven preparation: 

What does this look like in practice? Instead of a procurement manager spending weeks on an annual category strategy document, AI continuously monitors supplier performance, market conditions, risk factors, and alternative sources. Before every negotiation, the system automatically generates a fresh strategic brief based on real-time data: tariff changes, material price shifts, capacity constraints, and competitor moves. The "strategy" becomes living and adaptive, thereby embedding itself in daily workflow rather than remaining a static planning exercise. 

Key Takeaways for Procurement Professionals 

1. Domain expertise beats pure tech: The best procurement software comes from people who've actually done procurement and understand real pain points like cost transparency. 

2. Solve one problem exceptionally well first: Pool4Tool's breakthrough was supplier cost breakdowns that SAP couldn't do, not a full-suite platform. 

3. AI won't just digitize current processes: It will fundamentally change how procurement work gets done, from annual planning to continuous, real-time strategy. 

4. Agility is the new competitive advantage: In a world of rapid tariff changes, supply chain disruptions, and volatile material costs, static 18-month strategies are obsolete. 

Closing Thoughts

Thomas Dieringer's journey offers lessons that extend far beyond product costing. His emphasis on domain expertise over pure technical skill, focus over feature expansion, and agility over long-term planning reflects hard-won wisdom from two decades in the trenches. For procurement professionals, his story is a reminder that the best tools emerge from real problems, refined through real use cases, and constantly adapted to a changing world. 

Listen to the full episode to hear more about Thomas Dieringer's experiences and why he believes the next generation of cost and procurement tools will look nothing like what we use today.

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