Procurement teams at many companies invest heavily in their core spend areas, but the final 20 per cent of spend, the “tail-end”, remains a largely untapped opportunity for savings at most companies.

A large number of suppliers, smaller spend volumes and a perceived lack of economies of scale mean knowing exactly where to focus attention on the tail is a daunting task. The complexity of this tail spend is usually due to the fact it has been under the radar of the procurement team for a while, who as a consequence have let the local operations team buy whatever they want under a certain value threshold. Despite a handful of challenges, Everest Group suggests the inclusion of tail spend can generate significant savings. Therefore, it’s worth exploring ways to manage the common challenges.

by Olivier Chalon

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