Tail spend is often considered a paradox – even though it accounts for only 20 percent of total spend, it still covers 80 percent of suppliers. By tackling tail spend, you can dramatically increase

savings across the enterprise. Here are 5 quick ways to do so.

5 ways to tackletail spend

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THE SOURCING AND PROCUREMENT(S&P) SERIES

1. PROJECT: TAIL SPENDASSESSMENT 2. DATA CLEANSING 3. SPEND & PROCESS ANALYTICS

De�ne and evaluate scope, and then provide a business case comprising savings, investments, and operating

models to outsource tailspend management

Root cause analysis (RCA), process failure modes and e�ects analysis

(PFMEA), and value stream mapping combined with procure-to-pay tools

help in identifying preventive controls, which ensure an error-proof process

Classifying and improving data quality leads to greater spend visibility, which when aided by

analytical capabilities helps in making informed business decisions

4. PROCESS HARMONIZATION

A good tail spend management process should remove non-value

added steps, deploy relevant procurement applications, and aid in

prioritizing sourcing plans and identifying sourcing strategies

5. SOURCING STRATEGYFRAMEWORK

Map all sub-categories to supply exposure and business risk parameters,

de�ned across four quadrants – strategic security, strategic critical,

tactical acquisition, and tactical pro�t