Direct and Indirect Spend — A Wholly Pointless and Useless Classification [Plus+]

Almost anyone in business will understand the difference between direct costs and indirect costs, and likewise in the procurement world, the terms “direct spend” and “indirect spend” are widely used. We see job titles such as “Head of Indirect Purchasing.” ProcureCon runs very successful “indirect spend” conferences, and articles are aimed at buyers of “indirects.” And yet, it is a classification that arguably not only has no value or purpose to procurement, but can also lead to sloppy and misinformed procurement strategies, activities, and approaches. In this Spend Matters Plus post, Peter Smith, Executive Editor of Spend Matters UK/Europe, explains why the “direct/indirect” split doesn’t work for procurement.

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