Key Tailspend insights from over 400 procurement professionals
There's lots of info out there on tailspend, but we wanted to dig a bit deeper. So we teamed up with CIPS and Supply Manager Insider to run an in-depth survey. We had an incredible response, with almost 400 procurement professionals taking part and giving their valuable insights.
We make sense of the data in our new tailspend report. Download this white paper to explore how other companies are tackling their tailspend and leveraging technology to get more speed, consistency and control over their buying.
How does your tailspend stack up?
The reality is that Ad-hoc purchases are a regular part of business life and because they are ad-hoc, they are not always visible to the whole team at the right times. This can be frustrating, especially for procurement teams. It's difficult to get a clear picture and feel in control of your spend when this is happening.
It can have a massive impact, as in most cases tailspend can account for 20% of a company's indirect spend and represents up to 80% of transactions. That 20% can cost hundreds of millions of pounds in large organisations. There are savings to be gained here, but how?
To keep your overall spend healthy and joined up there needs to be synergy across how your whole team buys, especially maverick buying in the tail. But that's easier said than done.
It's no surprise that there are ways to extract savings through better tailspend management, but there were a few stats from our survey that stood out.
Three key stats that stood out for us
It's no big surprise that there are lots of challenges that come out of tailspend and in particular buying services. For us, these three facts highlight an interesting story:
50% of tailspend purchases are on services
(such as professional, legal, marketing or security services)
- 60% of procurement heads cited poor master data quality and governance as their biggest challenge.
- Only a third of procurement professionals have staff dedicated to managing tailspend.
Companies are spending more and more on buying services. This is taking up more time and let's face it, buying services is always more long-winded than buying goods. The fact that around half of all tailspend purchases are made without the procurement team involvement and 60% of procurement heads are twitchy about the quality of their data and governance, makes the perfect spending storm.
Thankfully there are ways to address these problems, our new white paper takes a deep dive into this and explores automation and technology as solution enablers.
Gain full access to all the insights gained from 400 procurement professionals and the goals and challenges on spending in the tail, download our white paper: