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Enhancing Procurement Processes through Tail Spend Management

Streamline operations, amplify productivity. See how ignoring tail spend hampers efficiency and why it’s essential to optimise your procurement operations.


Cap Gemini

Tail Spend Management in a nutshell

Tail spend management refers to the practice of actively managing and optimising the low-value, high-volume transactions that take place within an organisation. 

It involves consolidating the suppliers who account for 80% of the transactions but only contribute to 20% of the procurement spend.

The power of Tail Spend Management

By implementing tail spend management strategies, businesses can effectively control and streamline their tail spend, leading to improved financial performance and operating margins.

This approach involves identifying maverick or unmanaged spending, centralising supplier relationships, and implementing processes to gain visibility, control, and cost savings.

Taking a proactive approach to tail spend management enables organisations to optimise their procurement practices, reduce costs, mitigate risks, and enhance overall performance.

Top 5 risks you cannot afford to overlook

1. Increased costs:

Without effective tail spend management, you could be overspending on low-value purchases. Dispersed and uncontrolled tail spend can lead to higher procurement costs, missed opportunities for savings, and inefficient use of resources.

2. Lack of visibility:

Neglecting tail spend can result in a lack of visibility into your procurement activities. This makes it difficult to track spending, identify potential areas of waste, and make strategic decisions based on data-driven insights. Without visibility, you may be unaware of hidden risks or missed opportunities.

3. Supplier non-compliance:

Without proper management, your tail spend may expose you to risks associated with non-compliant suppliers. This includes issues related to quality control, certifications, labor practices, and environmental sustainability. Non-compliance can lead to legal and reputational consequences that can harm your business.

4. Inefficient processes:

Ignoring tail spend can lead to inefficient procurement processes. Fragmented supplier relationships, manual and time-consuming tasks, and disparate systems can augment complexities in managing your procurement operations. This inefficiency slows down your operations, hampers productivity, and can negatively impact your bottom line.

5. Missed sourcing opportunities:

Neglecting tail spend can result in missed opportunities for strategic sourcing. By not actively managing your tail spend, you run the risk of overlooking potential suppliers who could offer better pricing, improved quality, or innovative solutions. This can hinder your ability to stay competitive in the market.

Experience the Top 5 Benefits of Tail Spend Management

1. Cost savings

By effectively managing your tail spend, you can achieve significant cost savings.

Tail spend typically represents a large portion of a company’s overall spend, and by optimizing processes, consolidating suppliers, and leveraging data analysis, you can reduce costs and improve your bottom line.

2. Visibility and control

Tail spend management provides you with enhanced visibility and control over your procurement activities.

By centralizing your tail spend, you can gain a clear understanding of your purchasing patterns, identify potential areas of waste, and implement strategic sourcing strategies.

3. Risk mitigation

Managing tail spend helps mitigate risks associated with supplier performance, compliance, and sustainability.

By choosing reputable suppliers, monitoring their performance, and ensuring compliance with regulations, you can minimize the risk of disruptions and reputational damage to your business.

4. Streamlined procurement processes

Tail spend management streamlines your procurement processes, reducing the time and effort spent on manual tasks such as supplier onboarding, contract management, and invoice processing.

Automation and standardised workflows enable faster decision-making and more efficient operations.

5. Enhanced supplier relationships

By focusing on tail spend management, you can build stronger relationships with your suppliers.

Consolidating your supplier base allows you to negotiate better terms, drive volume discounts, and incentivise suppliers to provide higher quality services or products. This can lead to improved supplier performance, increased collaboration, and ultimately, better outcomes for your business.

Unleash Business Efficiency and Profitability with CXC

Implementing effective tail spend management can unlock these benefits and more, enabling you to optimise your procurement processes, reduce costs, and drive sustainable growth. Our tailored solutions are designed to help you harness the full potential of tail spend management and achieve maximum value for your business.

Reclaim precious time for your strategic priorities

In business, time is a precious resource. As procurement professionals, your strategic tasks and relationships matter greatly. That’s why implementing efficient tail spend management is crucial. By streamlining your procurement efforts, you can save valuable time and redirect your focus towards the tasks that truly drive your organisation forward.

We can empower you to optimise and automate low-value purchases, freeing up your time from manual and repetitive tasks.

With our streamlined processes and technology-driven solutions, you can swiftly navigate procurement operations, allowing you to dedicate your energy to strategic decision-making, building strong supplier relationships, and driving overall business growth.


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Regain Control of Your Time and Maximise Your Potential

With our expertise and technology, we provide the tools and support you need to offload time-consuming tasks, so you can devote your energy to cultivating important relationships and making strategic decisions that propel your business to new heights.

Let us help you regain control of your time and increase your bottom line – schedule a consultation today.