Tail Spend Becomes Increasing Focus for Companies

Over half of the companies that responded said that tail spend comprises over 10% of their annual spend.

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In the past five years, tail spend has become an increasing area of focus for companies thanks to supplier risk, operational risk and bloated costs, according to a study released by The Hackett Group.

From Fairmarkit:

  • Over half of the companies that responded said that tail spend comprises over 10% of their annual spend.
  • The majority of respondents reported that over 80% of their suppliers were within their tail spend, but almost 20% said reported this figure to be over 90%. 
  • While respondents recognize the importance of managing tail spend, almost two-thirds of respondents have seen minimal savings with their tail spend management programs thus far, compared to the savings they are seeing in non-tail spend.
  • Almost 60% of respondents believe that more than 7% savings are achievable.
  • 40% of respondents stated that difficulty managing end users also prevented them from properly managing tail spend. 
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