Enterprises today continue to make millions of purchases that are too small to be handled by procurement or too infrequent be included in catalog systems. Most companies miss their tail spend because it is not strategically managed, thus not often accounted for. The result is a neglected spend that can potentially drain the company millions of dollars, a considerable portion from the company’s coffers.
In this week’s webcast, we joined forces with KPMG LLP to cover why tail spend management is crucial and how to tap into the savings opportunity it offers. The webcast gave an overview, key strategies to manage better and how to get a grip on the Tail.
- A couple strategies to consider can include Category Management and Strategic sourcing to consolidate the supply base, tactical sourcing and buy desk support to shift or drive a portion of spend to qualified suppliers/existing negotiated contracts, and the use of Pcard to optimize low dollar spot buys.
- To get a grip on tail spend, organizations must have a defined process to manage one-off purchases, technology support to monitor, drive and better manage workflows, and organization within the procurement function to name a few.
- Starting a tail spend initiative will require analysis and operational metrics, refining the source-to-pay channel strategies, and identifying an operating model changes across the procurement function.
Tail Spend Management is one of the areas that Procurement executives must continuously get a grip on to ensure that spend on resources are handled efficiently. To learn more on how procurement can maximize its reach via tail spend management, please catch the webcast recap here.