Tail spend, as it is narrowly defined, does not include the entire bulk of “nuisance” spend that many companies must endure. In a new research paper titled "Re-thinking and Re-claiming 'Tail Spend,'" Chief Research Officer Pierre Mitchell delves into the importance of process design, proper tools, and flexible resourcing models.
Here’s an excerpt: “The idea of ‘tail spend’ doesn’t seem very complicated at first. Run a pareto analysis on your spend categories and suppliers to make a cut off at, say, the 80 percent that represent only 20 percent of your spend. Your numbers will of course vary, but the idea is to find a way to better manage such ‘nuisance’ low-dollar spend that doesn’t detract from your efficiency, or worse yet, from spending time managing the truly strategic spend categories more deeply.” Read more.
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