1、Areas of consideration to address tail spendConquer tail spend for supply chain optimisation0344 846 3333|Companies are increasingly focusing on savings from better management of non-strategic spend,or tail spend.As well as cost savings,there are significant implications and risks from that seemingl

2、y inconsequential,unmanaged tail spendNon-core purchases might amount to just 20 percent of spend,but its spend where only a minority of the suppliers are subject to meaningful governance.Why is that an issue?Read onSimply put,tail spend is the buying activity outside of your strategic purchases.Its

3、 the small,tactical purchases which,left unchecked,quickly add up to large sums.It is often spread across hundreds of providers,driven by both central purchasing and,increasingly,individual business units.For an organisation running software from Tail spend basics500 publishers,for example,tail spen

4、d might account for purchases from 400 or more of those companies.The Pareto principle usually applies in an amplified way here,with more than 80 percent of a companys spend often going to fewer than 20 percent of the suppliers.These key areas of spend are strategic,and as such,closely managed.2What

5、 is tail spend?With the digital era in full flow,businesses and their users want more technology to get work done.Every day were bombarded with information about new,cool technology,which brings a desire for rapid adoption to achieve competitive advantage.Suddenly a new piece of software gets added

6、to your line-up.Many companies have clear procedures for purchasing,but in an agile world the desire for rapid improvement often beats this.Common reasons include:Limited internal purchasing resourceMaverick spend,which falls outside of your companys formal procurement policyUnclassified/misclassifi